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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 3, 1998
NETMED, INC.
(Exact name of Registrant as specified in its charter)
OHIO 1-12529 31-1282391
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
6189 MEMORIAL DRIVE, DUBLIN, OHIO 43017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (614) 793-9356
Not Applicable
(Former name or former address, if changed since last report.)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 3, 1998, the Company acquired from Ceram Oxygen Technologies,
Inc. ("COTI") 95 common shares, representing 95 percent of COTI's outstanding
common shares immediately following the closing, in exchange for a cash payment
of $50,000 and delivery of a note in the principal amount of $150,000 (the
"Note"). The Note provides for three equal principal payments of $50,000 on each
of June 1, July 1, and August 1, 1998, together with interest at the rate of 8.5
percent per annum. The remaining 5 percent of COTI's outstanding common equity
is owned by CeramPhysics, Inc. ("Ceram") of Westerville, Ohio. COTI holds an
exclusive world-wide license to Ceram's patented oxygen generation technology
for all applications of the technology except oxygen sensors and fuel cells. The
consideration was applied by COTI to payment of a $200,000 license fee owed to
Ceram, with $50,000 being paid in cash, and the balance by assignment of the
Note.
The acquisition was made pursuant to a February, 1997 agreement among
the Company, COTI and Ceram, whereby the Company agreed to make advances to COTI
to complete the fabrication and testing of a ceramic element incorporating the
licensed technology. Pursuant to the agreement, through April 3, 1998, the
Company had advanced $363,470 to COTI for this purpose. The agreement also
provided that upon completion of an acceptance test of the ceramic element
satisfactory to the Company, the Company had the right to acquire 95% of the
equity of COTI for $200,000.
It is the Company's intention to incorporate the ceramic element into
an oxygen generation device (the OxyNet(R) System) that the Company expects to
manufacture and market to the home health care
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industry. The Company believes this system will be lighter, quieter, more
reliable and less costly to operate than current systems. The Company expects to
demonstrate a 4 liter per minute commercial prototype of the system this summer
and to begin marketing a 5-6 liter per minute device during the second quarter
of 1999. The Company also expects to develop other applications for the
technology, including military and industrial applications.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements in this report which relate to other than strictly
historical facts, including statements about the Company's plans and strategies,
as well as management's expectations about new and existing products,
technologies and opportunities, market growth, demand for and acceptance of new
and existing products (including the OxyNet(R) oxygen concentration device), are
forward looking statements. The words "believe," "expect," "anticipate,"
"estimate," "project," and similar expressions identify forward-looking
statements that speak only as of the date hereof. Investors are cautioned that
such statements involve risks and uncertainties that could cause actual results
to differ materially from historical or anticipated results due to many factors
including, but are not limited to, the risks detailed in the Company's most
recent Annual Report on Form 10-K and other Securities and Exchange Commission
filings. The Company undertakes no obligation to publicly update or revise any
forward-looking statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NETMED, INC.
Date: April 14, 1998 By: /s/ David J. Richards
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Name: David J. Richards
Title: President and Chief Executive
Officer
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