<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KA
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 17, 1997
(December 16, 1997)
UNIVERSAL SELF CARE, INC.
-------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-4228470
- ------------- --------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
11585 Farmington Road
Livonia, Michigan 48150
-----------------------
(Address of Principal Executive Offices)
Universal Self Care, Inc.
-----------
Brian D. Bookmeier
President
Universal Self Care, Inc.
11585 Farmington Road
Livonia, Michigan 48150
-----------------------
(Name and address of agent for service)
-----------------------
(313) 261-2988
-----------------------
(Telephone number, including area code, of agent for service)
Copy to:
Peter W. Rothberg, Esq.
Greenberg Traurig Hoffman
Lipoff Rosen & Quentel
153 East 53rd Street
New York, New York 10022
(212) 801-9200
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5--OTHER EVENTS.
On December 16, 1997 the Company, its principal operating subsidiaries and
its principal management stockholders, and Gainor Medical Management, LLC and
its wholly owned acquisition subsidiary ("Gainor"), executed an amendment to the
Asset Purchase Agreement among the parties, dated November 14, 1997 (the "First
Amendment"), for the sale to Gainor of substantially of all of the operating
assets of the Company (the "Transaction"). Negotiation of the First Amendment
resulted from Gainor's appraisal of the Company's future operations and its past
operating performance for the first five months of the Company's current fiscal
year ended November 30, 1997, which past performance was below that internally
projected by the Company owing in part to a decline in referrals of potential
customers, computer -generated problems in delivering recent Medicare billings
and other revenue reductions during the last several months. The First Amendment
reduced the purchase price for the assets from $37,000,000 to $34,000,000 (the
"Purchase Price"), eliminated upward adjustments to the Purchase Price based
upon the value of the Company's inventory and net tangible assets at closing,
and reduced the portion of the Purchase Price paid in the form of a convertible
subordinated note from $20,000,000 to $17,000,000. Pursuant to the First
Amendment, in addition to offsets for customary indemnifications under the Sale
Agreement, the principal of the Note is subject to reduction in the event that
(i) Gainor does not achieve Post Closing Revenue (as hereinafter defined) during
calendar 1998 at a level that is reduced in the First Amendment, and (ii) Gainor
is not able to collect at least $6,000,000 from the accounts receivable sold to
Gainor as part of the Transaction during the one-year period succeeding the
closing (which collection level was increased from $5,000,000 in the First
Amendment). Subject to approval of its stockholders, the Company anticipates
consummation of the Transaction in early February 1998.
ITEM 7--FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following pro forma consolidated financial statements have been prepared
to show the proposed disposition of all of the Company's (including its
subsidiaries') operating assets in the Gainor Transaction.
The following unaudited pro forma consolidated balance sheet presents the
pro forma financial position of the Company at September 30, 1997 as if the
proposed sale had occurred on such date. Included are adjustments to record the
value of the consideration paid to the Company, the disposition of assets sold
and liabilities assumed, the write-off of intangible assets connected with the
disposed operations and the settlement of a substantial portion of the remaining
liabilities.
The unaudited pro forma consolidated statements of operations for the year
ended June 30, 1997 and three months ended September 30, 1997 reflect the
Company in a non-operating
<PAGE>
mode after the disposition, whereupon certain corporate general and
administrative expenses will remain with the Company and the Company's income
will consist of interest collected upon the note issued in the sale and on
excess cash, as if the sale had occurred on July 1, 1996.
The unaudited pro forma consolidated statements of operations do not
necessarily represent actual results that would have been achieved had the sale
occurred on July 1, 1996, nor may it be indicative of future operations. These
unaudited pro forma consolidated financial statements should be read in
conjunction with the Company's historical financial statements and notes
thereto, which are included in the Company's 1997 Annual Report, which has been
delivered along with this Proxy Statement.
<PAGE>
UNIVERSAL SELF CARE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
BALANCE AT
SEPTEMBER 30, -----------------------------------
1997 DEBIT CREDIT TOTAL
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash................................................. $ 471,658 (1) $ 10,474,084 (3) $ 3,675,823 $ 6,798,261
Accounts receivable, net allowance for doubtful
accounts of $2,347,967............................. 8,552,235 (1) 8,552,235 --
Inventories.......................................... 461,437 (1) 461,437 --
Prepaid expenses..................................... 74,200 (1) 74,200 --
------------- ------------- ------------ ------------
TOTAL CURRENT ASSETS............................... 9,559,530 6,704,442
LONG-TERM NOTES RECEIVABLE, NET OF DISCOUNT.......... (1) 16,100,000 16,100,000
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $696,729........................... 964,729 (1) 964,729 --
INTANGIBLE ASSETS, net of accumulated amortization of
$889,999........................................... 5,762,663 (2) 5,762,663 --
DEPOSITS AND OTHER ASSETS............................ 41,706 (1) 41,706 --
------------- ------------- ------------ ------------
$ 16,328,628 $ 26,574,084 $20,004,451 $ 22,898,261
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
LIABILITIES
CURRENT LIABILITIES
Accounts payable................................... $ 3,941,435 (1) $ 3,941,435 $ $ --
Notes payable-current portion...................... 206,528 206,528
Accrued liabilities................................ 2,533,325 (1) 2,505,617 27,708
State audit reserves............................... 700,000 700,000
Payroll taxes payable.............................. 550,552 (1) 550,552
Accrued income tax payable--current portion........ (1) 475,000 475,000
------------- ------------- ------------ ------------
TOTAL CURRENT LIABILITIES........................ 7,931,810 1,409,236
LONG-TERM NOTES PAYABLE, net of current portion...... 207,083 207,083
REVOLVING CREDIT LOAN................................ 3,675,823 (3) 3,675,823 --
DEFERRED INCOME TAXES PAYABLE-- long term portion.... (1) 5,750,000 5,750,000
REDEEMABLE PREFERRED STOCK, Series A................. 1,686,324 1,686,324
STOCKHOLDERS' EQUITY
Preferred stock, Series B Cumulative Convertible,
$.0001 par value, 10,000,000 shares authorized,
1,580,000 shares issued and outstanding........... 505,000 505,000
Common stock, $.0001 par value 40,000,000 shares
authorized, 9,724,579 shares issued and outstanding
as of September 30, 1997.......................... 972 972
Additional paid-in capital......................... 14,045,838 14,045,838
Retained earnings (deficit)........................ (11,724,222)(2) 5,762,663 (1) 16,780,693 (861,514)
------------- ------------- ------------ ------------
TOTAL STOCKHOLDERS' EQUITY........................... 2,827,588 13,690,296
------------- ------------- ------------ ------------
$ 16,328,628 $ 16,436,060 $ 22,005,693 $ 22,898,261
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
<PAGE>
UNIVERSAL SELF CARE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS PRO FORMA ADJUSTMENTS
ENDED
SEPTEMBER 30, ------------------------
1997 DEBIT CREDIT
------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
REVENUES............................................. $ 8,258,138 (1) $ 8,258,138 $
COST OF GOODS SOLD................................... 4,884,197 (1) 4,884,197
-------------
GROSS PROFIT......................................... 3,373,941
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES......... 3,875,907 (3) 279,250 (1) 3,875,907
------------- ------------- ------------
OPERATING INCOME (LOSS).............................. (501,966)
------------- ------------- ------------
OTHER INCOME (EXPENSES)
Interest (expense), net............................ (143,391) (1) 133,051
IRS interest on deferred installment gain.......... -- (4) 77,500
Interest income.................................... -- (2) 412,000
------------- ------------- ------------
TOTAL OTHER INCOME (EXPENSES)...................... (143,391)
------------- ------------- ------------
NET INCOME (LOSS) BEFORE INCOME TAXES................ (645,357)
PROVISION FOR INCOME TAXES........................... -- (5) 17,964
------------- ------------- ------------
NET INCOME (LOSS).................................... $ (645,357) $ 8,632,852 $ 9,305,155
-------------
-------------
NET INCOME (LOSS) PER SHARE.......................... $ (0.07)
-------------
-------------
WEIGHTED AVERAGE SHARES.............................. 9,724,579
------------- ------------- ------------
------------- ------------- ------------
<CAPTION>
TOTAL
-------------
<S> <C>
REVENUES............................................. $ --
COST OF GOODS SOLD................................... --
GROSS PROFIT......................................... --
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES......... 279,250
-------------
OPERATING INCOME (LOSS).............................. (279,250)
-------------
OTHER INCOME (EXPENSES)
Interest (expense), net............................ (10,340)
IRS interest on deferred installment gain.......... (77,500)
Interest income.................................... 412,000
-------------
TOTAL OTHER INCOME (EXPENSES)...................... 324,160
-------------
NET INCOME (LOSS) BEFORE INCOME TAXES................ 44,910
PROVISION FOR INCOME TAXES........................... 17,964
-------------
NET INCOME (LOSS).................................... $ 26,946
-------------
-------------
NET INCOME (LOSS) PER SHARE.......................... $ 0.00
-------------
-------------
WEIGHTED AVERAGE SHARES.............................. 9,724,579
-------------
-------------
</TABLE>
See Notes to Pro Forma Financial Statements.
<PAGE>
UNIVERSAL SELF CARE, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
YEAR ENDED
JUNE 30, ------------------------
1997 DEBIT CREDIT
------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
REVENUES............................................. $ 34,001,626 (1) $ 34,001,626 $
COST OF GOODS SOLD................................... 19,981,506 (1) 19,981,506
------------- ------------- ------------
GROSS PROFIT......................................... 14,020,120
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES......... 15,798,780 (3) 1,117,000 (1) 15,798,780
------------- ------------- ------------
OPERATING INCOME (LOSS).............................. (1,778,660)
------------- ------------- ------------
OTHER INCOME (EXPENSES)
Interest (expense), net............................ (874,572) (1) 833,211
IRS interest on deferred installment gain.......... -- (4) 350,000
Interest income.................................... -- (2) 1,739,618
------------- ------------- ------------
TOTAL OTHER INCOME (EXPENSES)...................... (874,572)
------------- ------------- ------------
NET INCOME (LOSS) BEFORE INCOME TAXES................ (2,653,232)
PROVISION FOR INCOME TAXES........................... -- (5) 70,656
------------- ------------- ------------
NET INCOME (LOSS).................................... $ (2,653,232) $ 35,499,282 $ 38,258,497
------------- ------------- ------------
------------- ------------- ------------
NET INCOME (LOSS) PER SHARE.......................... $ (.33)
------------- ------------- ------------
------------- ------------- ------------
WEIGHTED AVERAGE SHARES.............................. 8,084,278
------------- ------------- ------------
------------- ------------- ------------
<CAPTION>
TOTAL
-------------
<S> <C>
REVENUES............................................. $ --
COST OF GOODS SOLD................................... --
-------------
GROSS PROFIT......................................... --
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES......... 1,117,000
-------------
OPERATING INCOME (LOSS).............................. (1,117,000)
-------------
OTHER INCOME (EXPENSES)
Interest (expense), net............................ (41,361)
IRS interest on deferred installment gain.......... (350,000)
Interest income.................................... 1,739,618
-------------
TOTAL OTHER INCOME (EXPENSES)...................... 1,348,257
-------------
NET INCOME (LOSS) BEFORE INCOME TAXES................ 231,257
PROVISION FOR INCOME TAXES........................... 92,503
-------------
NET INCOME (LOSS).................................... $ 105,983
-------------
-------------
NET INCOME (LOSS) PER SHARE.......................... $ 0.01
-------------
-------------
WEIGHTED AVERAGE SHARES.............................. 8,084,278
-------------
-------------
</TABLE>
See Notes to Pro Forma Financial Statements.
UNIVERSAL SELF CARE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
A. The following unaudited pro-forma adjustments are included in the
accompanying unaudited pro forma consolidated balance sheet at September 30,
1997:
(1) To record the sale of all the Company's operating assets with
assumption by the buyer of certain accounts payable totaling $3,941,435 and
accrued expenses of $1,878,637. The sale price is assumed to be $34 million,
constituted as follows: $17 million cash (as decreased for the assumption of
accounts payable and accrued expenses totaling $5,212,416) and increased for
the book value of inventory, property and equipment and prepaid and other
assets) and a $17 million note receivable payable over a minimum of 5 years
(subject to prepayment), bearing interest at 7% for the first year and 8%
thereafter. The Company has recorded a discount of $900,000 on the note. The
estimated gain on sale is $22,534,035. The estimated tax impact to the
Company is $6,225 million (after consideration of the Company's net
operating loss carry
<PAGE>
forwards).
(2) To write off all remaining goodwill and intangible assets related to
the Company's operations upon the disposal.
(3) To utilize a portion of cash receipts from the sale to pay off the
revolving credit loan and amount due on the California sales tax audit
settlement.
B. The following pro-forma adjustments are included in the accompanying
unaudited pro forma consolidated statements of operations for the year ended
June 30, 1997 and three months ended September 30, 1997, which have been
prepared to reflect the sale as if it had occurred on July 1, 1996:
(1) To eliminate the operations of the disposed business from the
Company's statement of operations.
(2) To record interest income at an annual rate of 7% on the $17 million
note receivable, and 6% on the remaining cash.
(3) To record estimated general corporation expenses of $1,117,000 on an
annual basis.
(4) To record IRS interest on deferred installment gain.
(5) To record provision of income tax.
(c) Exhibits.
1. First Amendment, dated as of November 24, 1997, to Asset Purchase
Agreement dated November 14, 1997.
<PAGE>
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 hereto duly authorized.
UNIVERSAL SELF CARE, INC.
(REGISTRANT)
DATED: DECEMBER 30, 1997 BY: /S/ BRIAN D. BOOKMEIER
-----------------------------------------
Brian D. Bookmeier,
CHIEF EXECUTIVE OFFICER
<PAGE>
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 hereto duly authorized.
UNIVERSAL SELF CARE, INC.
(REGISTRANT)
DATED: DECEMBER 30, 1997 BY:
-----------------------------------------
Brian D. Bookmeier, President And
CHIEF EXECUTIVE OFFICER OFFICER
