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SCHEDULE 13E-3
(Rule 13e-100)
Transaction Statement Pursuant to Section 13(e) of the Securities
Exchange Act of 1934 and Rule 13e-3 Thereunder
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Act of 1934)
(Amendment No. 2)
U.S. DRUG TESTING, INC.
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(Name of Issuer)
SUBSTANCE ABUSE TECHNOLOGIES, INC.
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(Name of Person(s) Filing Statement)
COMMON STOCK, $.001 PAR VALUE
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(Title of Class of Securities)
3821 0610
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(CUSIP Number of Class of Securities)
ROBERT STUTMAN
U.S. DRUG TESTING, INC.
4517 NW 31st Avenue
Ft. Lauderdale, Florida 33309
(954) 739-9600
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [ ] The filing of solicitation materials or an
information statement subject to Regulation 14A, Regulation 14C
or Rule 13e-3(c) under the Securities Exchange Act of 1934.
b. [X] The filing of a registration statement under the
Securities Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [ ]
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Calculation of Filing Fee
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Transaction
Valuation* Amount of Filing Fee
$6,757,992 $2,094
* The fee was calculated on the basis of an assumed value
of $1.625 (the closing sales price on February 14,
1997) assigned to a share of the Common Stock of U.S.
Drug Testing, Inc. to be issued in the proposed
transaction and it was assumed that an aggregate of
2,789,478 shares would be issued to the Issuer's
minority stockholders for their 1,721,900 shares and
that 243,000 shares would be issued upon the exercise
of warrants at an exercise price of 4.63 per share.
[X] Check box if any part of the fee is offset as provided
by Rule 0-11(a)(2) and identify the filing with which
the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or
the form or schedule and the date of its filing.
Amount Previously Paid: $3,883.00
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Form or Registration No.: Registration Statement on Form S-4, File No. 333-4790
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Filing Party: Substance Abuse Technologies, Inc.
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Date Filed: May 6, 1996
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CROSS REFERENCE SHEET
Schedule 13E-3 Registration Statement
Item Number and Caption Caption
1. Issuer and Class of Security U.S. Drug Market
Subject to the Transaction Information
2. Identity and Background Summary-Background of
Companies; Business of the
Company-General; SAT
Management-Business History
3. Past Contacts, Transactions Material Contacts of SAT With
or Negotiations U.S. Drug
4. Terms of the Transaction Terms of the Transaction;
The Merger and Related Matters
5. Plans or Proposals of the Terms of the Transaction; The
Issuer or Affiliate Merger and Related Matters
6. Source and Amounts of Funds The Merger and Related
or Other Consideration Matters-Fees and Expenses
7. Purposes, Alternatives, Reasons for the Merger and
Reasons and Effects Approval by the SAT Board
of Directors and Certain Tax
Consequences under the caption
"The Merger and Related
Matters"; Terms of the
Transaction-Special Payment
8. Fairness of the Transaction Reasons for the Merger and
Approval and Fairness Opinion
under the caption "The Merger and
Related Matters"; Terms of the
Transaction-The Consent
Procedure-Statutory Basis
9. Reports, Opinions, Appraisals The Merger and Related
and Certain Negotiations Matters-Fairness Opinion
10. Interest in the Common Stock U.S. Drug Principal
of the Issuer Stockholders
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CROSS REFERENCE SHEET
Schedule 13E-3 Registration Statement
Item Number and Caption Caption
----------------------- ----------------------
11. Contracts, Arrangements or The Merger and Related
Understandings with Respect Matters-Terms of the Merger
to the Common Stock Agreement
12. Present Intention and Terms of the Transaction-
Recommendation of Certain Consent Procedure-
Persons With Regard to the Miscellaneous
Transaction
13. Other Provisions of the Terms of the Transaction-
Transaction The Consent Procedure; The
Consent Procedure-Rights of
Dissenting U.S. Drug Stockholders
14. Financial Information U.S. Drug's Financial
Statements; Summary Historical and
Proforma Combined Financial Data;
U.S. Drug's Selected Financial Data
15. Persons and Assets Employed, The Merger and Related
Retained or Utilized Matters-Fees and Expenses; Terms
of the Transaction-Miscellaneous
16. Additional Information Not Applicable
17. Material to be Filed as Appendix A to Consent
Exhibits Solicitation Statement/ Prospectus
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Item 1. Issuer and Class of Security Subject to the Transaction.
(a) This Rule 13e-3 transaction (the "Merger") relates to
the common stock, $.001 par value (the "U.S. Drug Common Stock"),
of U.S. Drug Testing, Inc. ("U.S. Drug "), which has its
principal office at 4517 NW 31st Avenue, Ft. Lauderdale, Florida
33309.
(b) As of March 31, 1997, there were 5,221,900 shares of
the U.S. Drug Common Stock outstanding, of which 1,721,900 were
held by stockholders (the "U.S. Drug Minority Stockholders")
other than Substance Abuse Technologies, Inc. ("SAT") and there
were 77 holders of record of the U.S. Drug Common Stock
(including SAT).
(c) SAT, the reporting person with respect to this Schedule
13E-3, is simultaneously filing an Amendment No. 2 to
Registration Statement on Form S-4, File No. 333-4790 (the
"Registration Statement"), under the Securities Act of 1933, as
amended (the "Securities Act"). Information as to the market and
the market prices for the U.S. Drug Common Stock may be found
under the caption "U.S. Drug Market Information-Market Data" in
the Consent Solicitation Statement/Prospectus (the "Prospectus")
constituting Part I of the Registration Statement, which
information is incorporated herein by this reference.
(d) U.S. Drug has not declared any dividends on the U.S.
Drug Common Stock to date and, in view of the continuing losses,
the Board of Directors of U.S. Drug has stated that the Company
has no current intention to pay any such dividends. SAT is not
aware of any restrictions in any agreement or security which
restricts U.S. Drug's present or future ability to pay dividends.
(e) Pursuant to a registration statement under the
Securities Act which became effective on October 5, 1993, U.S.
Drug sold in a publicly underwritten offering 1,721,900 shares of
the U.S. Drug Common Stock at $5.00 per share and received
approximately $7,099,000 in net proceeds.
(f) Not Applicable.
Item 2. Identity and Background.
(a)-(d) and (g) Reference is made to the section "Summary-
Background of the Company" and "Business of the Company-General"
in the Prospectus, which is incorporated herein by this
reference, for the following information relating to SAT: its
state of organization, its principal business and the address of
its principal executive offices, which information is
incorporated herein by reference.
(e) and (f) During the last five years, SAT has not been
convicted in a criminal proceeding and was not a party to a civil
proceeding of a judicial or administrative body of
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competent jurisdiction which resulted in a judgment, decree or final order
enjoining further violations of, or prohibiting activities
subject to, federal or state securities laws or finding any
violation of such laws.
For each of the directors and executive officers of SAT,
there is furnished the following information: (a) the person's
name; (b) his or her residence or business address; (c) his or
her present principal occupation or employment and the name,
principal business and address of any corporation or other
organization in which such employment or occupation is conducted;
(d) information as to material occupations, positions, offices or
employments during the last five years is incorporated herein by
reference to the section "Business History" under the caption
"SAT Management" in the Prospectus; (e) whether or not, during
the last five years, such person has been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors); (f) whether or not, during the last five years,
such director and/or executive officer was a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction, as a result of such proceeding, was or is subject
to a judgment, decree or final order enjoining further violations
of, or prohibiting activities subject to, Federal or State
securities laws or finding any violation of such laws; and, if
so, identifying and describing such proceeding and summarizing
the terms of such judgment, decree or final order; and (g)
citizenship.
(a) Robert Stutman
(b) c/o Substance Abuse Technologies, Inc.
4517 NW 31st Avenue
Ft. Lauderdale, FL 33309
(c) Chairman of the Board and Chief Executive Officer of
Substance Abuse Technologies, Inc.
4517 31st Avenue
Ft. Lauderdale, FL 33309
(d) Reference is made to the section "Business History"
under the caption "SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
(a) Alan I. Goldman
(b) 497 Ridgewood Avenue
Glen Ridge, NJ 07028
(c) Self Employed
497 Ridgewood Avenue
Glen Ridge, NJ 07028
(d) Reference is made to the section "Business History"
under the caption "SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
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(f) No
(g) United States
(a) John C. Lawn
(b) 389 Beechwood Road
Ridgewood, NJ 07450
(c) Chairman and Chief Executive Officer of The Century
Council
550 South Hope Street, Suite 1950
Los Angeles, CA 90071-2604
(d) Reference is made to the section "Business History"
under the caption "SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
(a) Peter M. Mark
(b) 5531 Sugar Hill
Houston, TX 77056
(c) Self Employed
Oil and Gas Property Investment
5847 San Felipe, Suite 2930
Houston, TX 77057
(d) Reference is made to the section "Business History"
under the caption "SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
(a) Linda H. Masterson
(b) c/o Substance Abuse Technologies, Inc.
10410 Trademark Street
Rancho Cucamonga, CA 91730
(c) President of Substance Abuse Technologies, Inc.
10410 Trademark Street
Rancho Cucamonga, CA 91730
(d) Reference is made to the section "Business History"
under the caption " SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
(a) Lee S. Rosen
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(b) 17332 Saint James Court
Boca Raton, FL 33496
(c) Stockbroker
First Colonial Securities Group, Inc.
17332 Saint James Court
Boca Raton, FL 33496
(d) Reference is made to the section "Business History"
under the caption " SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
(a) Robert Muccini
(b) c/o Substance Abuse Technologies, Inc.
4517 31st Avenue
Ft. Lauderdale, FL 33309
(c) Vice President - Finance, Treasurer, Chief Financial
Officer and Chief Accounting Officer of Substance Abuse
Technologies, Inc.
4517 31st Avenue
Ft. Lauderdale, FL 33309
(d) Reference is made to the section "Business History"
under the caption "SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
(a) Michael S. McCord
(b) 2001 Kirby Drive
Suite 701
Houston, TX 77019
(c) Self Employed
McCord Investments
2001 Kirby Drive
Suite 701
Houston, TX 77019
(d) Reference is made to the section "Business History"
under the caption "SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
(a) Brian Stutman
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(b) c/o Substance Abuse Technologies, Inc.
4517 NW 31st Avenue
Ft. Lauderdale, FL 33309
(c) Vice President - Sales and Marketing of Substance Abuse
Technologies, Inc.
4517 NW 31st Avenue
Ft. Lauderdale, FL 33309
(d) Reference is made to the section "Business History"
under the caption "SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
(a) Steven J. Kline
(b) c/o Substance Abuse Technologies, Inc.
10401 Trademark Street
Rancho Cucamonga, CA 91730
(c) Vice President - Research and Development of Substance
Technologies, Inc.
10401 Trademark Street
Rancho Cucamonga, CA 91730
(d) Reference is made to the section "Business History"
under the caption "SAT Management" in the Prospectus,
which is incorporated herein by this reference.
(e) No
(f) No
(g) United States
Item 4. Terms of the Transaction.
(a) Pursuant to resolutions adopted by SAT's Board of
Directors on January 23, 1997 as modified on February 17, 1997,
SAT will offer 1.62 shares of its Common Stock, $.01 par value
(the "SAT Common Stock"), for each share of the U.S. Drug Common
Stock held by U.S. Drug stockholders other than SAT (the "U.S.
Drug Minority Stockholders") if a merger (the "Merger") of U.S.
Drug with and into Drug Testing Acquisition Corp. ("Acquisition
Corp."), a wholly-owned subsidiary of SAT, is approved by at
least a majority of the U.S. Drug Minority Stockholders. If the
Merger is so adopted and consummated, an aggregate of 2,789,478
shares of the SAT Common Stock will be issued to the U.S. Drug
Minority Stockholders. Reference is made to the subsection
"Authorization" of this section "The Merger and Related Matters-
Reasons for the Merger and Approval" for information as to how
the SAT Board determined the exchange ratio.
On January 23 and February 17, 1997, the U.S. Drug Board of
Directors approved the SAT offer as fair to the U.S. Drug
Minority Stockholders and, on the latter date, each of the SAT
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Board and the U.S. Drug Board authorized execution of the
Agreement and Plan of Merger dated as of February 17, 1997 (the
"Merger Agreement") by and among SAT, Acquisition Corp. and U.S.
Drug.
(b) There is no term or arrangement concerning the Rule
13e-3 transaction relating to any security holder of U.S. Drug
which is not identical to that relating to other security holders
of the same class of securities of U.S. Drug.
Item 6. Source and Amounts of Funds or Other Consideration.
(a) Because U.S. Drug does not have any products or
services and, accordingly, no revenues, it will have to depend on
funds loaned or invested by SAT to pay the expenses of the Rule
13e-3 transaction for which it is responsible. SAT will use its
revenues to pay the expenses of the Rule 13e-3 transaction,
although, because funds are fungible, some may come from
financings. As indicated in the response to Item 4(a) of this
Schedule, SAT is offering shares of the SAT Common Stock for the
shares of the U.S. Drug Common Stock held by the U.S. Drug
Minority Stockholders and not a cash consideration, except to pay
for fractional shares.
(b) Reference is made to "The Merger and Related Matters -
Fees and Expenses" in the Prospectus, which is incorporated
herein by this reference, for information as to the expenses
incurred or estimated to be incurred by SAT and U.S. Drug
relating to the Merger.
(c) See the response to section (a) of this Item 6 to the
Schedule.
(d) Not Applicable.
Item 8. Fairness of the Transaction.
(a) U.S. Drug's Board of Directors unanimously and
reasonably believes that the Merger is fair to the U.S. Drug
Minority Stockholders. Reference is made to the section "The
Merger and Related Matters-Reasons for the Merger," primarily
subsections (5) and (6) thereof, in the Prospectus for
information relating to the basis of such belief, which
information is incorporated herein by this reference.
(b) Reference is made to the section "The Merger and
Related Matters - Reasons for the Merger," primarily subsections
(5), (6) and (9) thereof in the Prospectus for information as to
the material factors upon which the belief of the U.S. Drug Board
in section (a) of this Item 8 to the Schedule is based and the
weight given to each of these factors.
(c) Reference is made to the section "Terms of the
Transaction - The Consent Procedure - Statutory Basis" in the
Prospectus, which is incorporated herein by this reference,
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where it is stated that at least a majority of the U.S. Drug Minority
Stockholders must approve the Merger.
(d) None of the directors of U.S. Drug who approved the
Merger on January 23 and February 17, 1997 is an employee of U.S.
Drug, although two of the three are employees of SAT. See the
section "The Merger and Related Matters - Reasons for the
Merger," primarily subsection (2) thereof, for information as to
why no unaffiliated representative was engaged to negotiate the
terms of the Rule 13e-3 transaction and the safeguards to protect
the U.S. Drug Minority Stockholders, including the obtaining of a
fairness opinion from an independent investment banking firm.
(e) All directors of U.S. Drug, none of whom is an employee
of U.S. Drug, approved the Merger on January 23 and February 17,
1997.
(f) Not Applicable.
Item 17. Material to be Filed as Exhibits
(a) Not applicable.
(b) The opinion referred to in Items 8(d) and 9 of this
Schedule is Appendix B to the Prospectus and is incorporated
herein by this reference.
(c) The Merger Agreement is Appendix A to the Prospectus
and is incorporated herein by this reference.
(d) The only disclosure document to be furnished to the
U.S. Drug Minority Stockholders is the Prospectus, which is
incorporated herein by this reference.
(e) The disclosure as to the unavailability of appraisal
rights is described in the Prospectus, which is incorporated
herein by this reference.
(f) Not Applicable.
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SIGNATURES
After due inquiry and to the best of the undersigned's
knowledge and belief, the undersigned does hereby certify that
the information set forth in this statement is true, complete and
correct.
April 22, 1997
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(Date)
SUBSTANCE ABUSE TECHNOLOGIES, INC.
By: /s/ Robert S. Stutman
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Robert S. Stutman
Chairman of the Board
