<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Amendment No. 1 to Application or report Filed
Pursuant to Section 13 or 15 (d) of the Securities and Exchange Act of 1934
Date of Report: November 20, 1998
IMAGYN MEDICAL TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-111150 98-0122944
(Commission (IRS Employer
file number) Identification Number)
5 CIVIC PLAZA, SUITE 100
NEWPORT BEACH, CALIFORNIA 92660
(Address of principal executive offices) (zip code)
(714) 668-5858
(Registrant's telephone number, including area code)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
Disposition of Impotence Product Line.
On November 20, 1998, Imagyn Medical Technologies, Inc., (the Company)
completed the disposition of certain net assets related to the Company's
impotence product line to Timm Research Company. The Asset Purchase Agreement
dated October 7, 1998 provided for the payment of approximately $13,500,000 in
cash at closing, $1,500,000 in a promissory note and an earn-out related to the
sale of vacuum devices not to exceed a total of $9,000,000 over five years.
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1998.
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the six months ended September 30, 1998.
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended March 31, 1998.
Notes to Unaudited Pro Forma Condensed Combined Consolidated
Financial Statements.
(c) Exhibits.
The following exhibits are filed as part of this report:
Exhibit
Number
2.0* Asset Purchase Agreement dated October 7, 1998 by
and between Timm Research Company, Osbon Medical Systems,
Ltd., Dacomed, Inc. and Imagyn Medical Technologies, Inc.
- ----------------------
*Filed previously
<PAGE> 3
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.
IMAGYN MEDICAL TECHNOLOGIES, INC.
January 13, 1999 By /s/ Charles A. Laverty
------------------------------
Charles A. Laverty
Chief Executive Officer
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On November 20, 1998, Imagyn Medical Technologies, Inc., (Imagyn) completed the
disposition of certain net assets related to the Company's impotence product
line to Timm Research Company.
The following unaudited pro forma condensed consolidated balance sheet at
September 30, 1998 reflects the historical consolidated balance sheet of Imagyn
Medical Technologies, Inc., adjusted to give effect to the disposition of the
impotence product line, as if such disposition had occurred at September 30,
1998.
The following unaudited pro forma condensed consolidated statements of
operations are presented to reflect the disposition of the impotence product
line as if such disposition had occurred on April 1, 1997 for the year ended
March 31, 1998; and April 1, 1998 for the six months ended September 30, 1998.
The unaudited pro forma condensed consolidated balance sheet and statements of
operations and accompanying notes should be read in conjunction with the
respective historical audited consolidated financial statements of Imagyn
Medical Technologies, Inc.
The unaudited pro forma condensed consolidated financial information is based on
the consolidated financial statements of Imagyn Medical Technologies, Inc.,
giving effect to the transactions under the assumptions and adjustments outlined
in the accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements.
The pro forma adjustments are based upon available information and upon certain
assumptions that Imagyn management believes are reasonable given the
circumstances. The unaudited pro forma condensed consolidated balance sheet and
statements of operations are provided for comparative purposes only and are not
necessarily indicative of the results that would have been obtained had the
disposition occurred on the dates indicated.
<PAGE> 5
IMAGYN MEDICAL TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
SEPTEMBER 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
DISPOSITION
OF IMPOTENCE PRO FORMA PRO FORMA
IMAGYN PRODUCT LINE ADJUSTMENTS TOTAL
-------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 200 $ - 13,511 (b) $ 200
Receivables, net of allowance $3,359 and $14,027 (13,511)(e) -
on March 31,1998 and September 30,1998
respectfully 19,530 (3,648) 15,882
Inventories 24,226 (4,284) 19,942
Prepaids and deposits 2,862 - - 2,862
--------- --------- -------- ---------
Total current assets 46,818 (7,932) - 38,886
Restricted cash 6,875 - - 6,875
Notes Receivable - - 1,500 (b) 1,500
Property and equipment, net 24,167 (2,093) 22,074
Patents and intangibles, net of accumulated
amortization of $4,836 and $5,310 on March 31,
1998 and September 30,1998 respectively 4,470 - - 4,470
Loan to officers 2,294 - - 2,294
Deposits and other assets 588 (29) 559
Deferred debt issue costs 10,366 - - 10,366
Goodwill, net 56,515 - - 56,515
--------- ---------- -------- ----------
$ 152,093 $ (10,054) $ 1,500 $ 143,539
--------- ---------- -------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 31,832 $ - 165 (a) 30,875
(1,122)(e)
Compensation and employee benefits 3,894 (231) 3,663
Restructuring liabilities 1,739 - - 1,739
Revolving line of credit 36,652 (12,389)(e) 24,263
Term loan 14,500 - - 14,500
Current portion of long-term debt 242 - - 242
--------- --------- ---------- ---------
Total current liabilities 88,859 (231) (13,346) 75,282
Deferred income
Long-term liabilities:
Senior subordinated notes, net 108,447 - - 108,447
Long term debt 54,965 - - 54,965
Restructuring, less current portion 787 - - 787
Other liabilities 2,112 - - 2,112
Common stockholders' equity:
Common stock, $0.001 par value
Authorized shares - 100,000,000
Issued and outstanding shares 36,303,125 and
38,687,325 at March 31,1998 and
September 30,1998 38 - - 38
Warrants 7,683 - - 7,683
Additional paid-in capital 229,492 - - 229,492
Foreign currency adjustment 105 - - 105
Deficit (340,395) (9,823) (165)(a) (335,372)
15,011
-
--------- --------- ---------- -----------
Total common stockholders' equity (103,077) (9,823) 14,846 (98,054)
--------- --------- ---------- -----------
$ 152,093 $ (10,054) $ 1,500 $ 143,539
========= ========= ========= ===========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
<PAGE> 6
IMAGYN MEDICAL TECHNOLOGY, INC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
DISPOSITION
OF IMPOTENCE PRO FORMA PRO FORMA
IMAGYN PRODUCT LINE ADJUSTMENTS TOTAL
-------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 20,961 $ (7,201) $ - $ 13,760
Cost of sales 20,925 (2,354) - 18,571
-------- -------- ------- --------
Gross profit 36 (4,847) - (4,811)
Operating expenses:
Selling, general and administrative 38,776 (8,838) 165 (a) 30,103
Research and development 2,695 - - 2,695
-------- -------- ------- --------
Total operating expenses 41,471 (8,838) 165 32,798
-------- -------- ------- --------
Loss from operations (41,435) 3,991 (165) (37,609)
Other income (expense):
Interest income 328 (81) 45 (f) 292
Interest expense (14,247) 630 (e) (13,617)
Other 1,308 - - 1,308
Gain (loss) on disposal of assets (308) - 5,188 (c) 4,880
-------- -------- -------- --------
Loss from continuing operations before provision (benefit)
income taxes (54,354) 3,910 5,698 (44,746)
Provision (benefit) for income taxes - - - (d) -
-------- -------- -------- --------
Net loss before discontinued operations and extraordinary (54,354) 3,910 5,698 (44,746)
item ======== ======== ======== ========
Net loss per share:
-------- --------
Net loss attributable to common stockholders $(54,354) $(44,746)
======== ========
Basic and diluted loss per share before discontinued
operations and extraordinary item $ (1.48) $ (1.22)
======== ========
Weighted average number of shares used to
compute net loss per share 36,820 36,820
======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
<PAGE> 7
IMAGYN MEDICAL TECHNOLOGY, INC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
DISPOSITION
OF IMPOTENCE PRO FORMA PRO FORMA
IMAGYN PRODUCT LINE ADJUSTMENTS TOTAL
-------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Net sales $105,519 $(33,506) $ - $ 72,013
Cost of sales 59,591 (8,334) - 51,257
-------- -------- -------- --------
Gross profit 45,928 (25,172) - 20,756
Operating expenses:
Selling, general and administrative 88,031 (27,255) 165 (a) 60,941
Research and development 11,897 - - 11,897
Restructuring cost 3,846 - - 3,846
Direct acquisition cost 4,220 - - 4,220
-------- -------- -------- --------
Total operating expenses 107,994 (27,255) 165 80,904
-------- -------- -------- --------
Loss from operations (62,066) 2,083 (165) (60,148)
Other income (expense):
Interest income 2,679 (49) 90 (f) 2,720
Interest expense (22,234) 1,256 (e) (20,978)
Other 460 - 460
Gain on disposal of assets - - 5,188 (c) 5,188
-------- -------- -------- --------
Loss from continuing operations before provision
(benefit) for income taxes (81,161) 2,034 6,369 (72,758)
Provision (benefit) for income taxes 2 - - (d) 2
-------- -------- -------- --------
Net loss before discontinued operations and
extraordinary item (81,163) 2,034 6,369 (72,760)
======== ======== ======== ========
Net loss per share:
Net loss before discontinued operations and
extraordinary item $(81,163) $(72,760)
======== ========
Basic and diluted loss per share before
discontinued operations and extraordinary item $ (2.28) $ (2.04)
======== ========
Weighted average number of shares used to
compute net loss per share 35,608 35,608
======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
<PAGE> 8
IMAGYN MEDICAL TECHNOLOGIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Pro Forma Adjustments
Disposition of Impotence Product Line
On November 20, 1998, Imagyn Medical Technologies, Inc., (Imagyn) completed the
disposition of certain net assets related to the Company's impotence product
line to Timm Research Company. The asset purchase agreement provided for an
initial cash payment consisting of $11.5 million (subject to adjustment upon the
reconciliation of the final working capital amounts), $2.0 million payment
relating to the assumption of certain liabilities, a $1.5 million promissory
note payable in one year from the date of closing, and accruing interest at a
rate of 6% per annum, and an earn-out provision that provides for additional
payments yearly for five years not to exceed $9 million in aggregate. Earn-out
payments are based upon a percent of yearly sales that exceed specific target
levels.
(a) Expenses incurred in connection with the product line disposal.
(b) Consideration received in the disposal of the net assets of the
impotence product line.
(c) Reflects the gain on assets disposal.
(d) No income tax provision has been recorded in the pro forma
adjustments, since the Company's Federal and State net operating
loss carry forward are sufficient to offset any potential tax due
on the gain generated from the disposal.
(e) Paydown of outstanding borrowings under the revolving lines of
credit with net proceeds from the product line disposal, and
associated interest expense reduction at interest rates of 10%.
(f) Interest income from $1.5 million promissory note at 6% per annum.
