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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): December 17, 1997 (December
16, 1997)
UNIVERSAL SELF CARE, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4228470
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(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
11585 FARMINGTON ROAD
LIVONIA, MICHIGAN 48150
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
UNIVERSAL SELF CARE, INC.
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BRIAN D. BOOKMEIER
PRESIDENT
UNIVERSAL SELF CARE, INC.
11585 FARMINGTON ROAD
LIVONIA, MICHIGAN 48150
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(NAME AND ADDRESS OF AGENT FOR SERVICE)
(313) 261-2988
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(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
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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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
(To be filed by amendment.)
(c) EXHIBITS.
1. First Amendment, dated as of November 24, 1997, to Asset
Purchase Agreement dated November 14, 1997.
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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 17, 1997 By: /s/ Brian D. Bookmeier
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Brian D. Bookmeier, President
and Chief Executive Officer
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Exhibit 1
FIRST AMENDMENT TO THE ASSET PURCHASE AGREEMENT
This First Amendment to the Asset Purchase Agreement (the "AGREEMENT"), dated as
of November 24, 1997, is by and among UNIVERSAL SELF CARE, INC., a Delaware
corporation ("UNIVERSAL"), each of its wholly owned subsidiaries, CLINISHARE
DIABETES CENTERS, INC., a California corporation, PHYSICIANS SUPPORT SERVICES,
INC., a California corporation, USC-MICHIGAN, INC., a Michigan corporation, its
wholly owned subsidiary, PCS, INC. - WEST, a Michigan corporation, DIABETES SELF
CARE, INC., a Virginia corporation, USCI HEALTHCARE MANAGEMENT SOLUTIONS, INC.,
a Delaware corporation, and certain of the stockholders of Universal, BRIAN D.
BOOKMEIER, EDWARD T. BUCHHOLZ, MATTHEW B. GIETZEN, and ALAN M. KORBY
(individually, each a "STOCKHOLDER" and collectively, the "STOCKHOLDERS"), on
the one hand, and GAINOR MEDICAL MANAGEMENT, LLC ("GAINOR MANAGEMENT"), a
Georgia limited liability company, and its subsidiary GAINOR MEDICAL ACQUISITION
COMPANY, a Georgia corporation ("GAINOR ACQUISITION", and collectively with
Gainor Management, "GAINOR"), on the other hand. The parties named above entered
into an Asset Purchase Agreement on November 14, 1997 (the "Purchase
Agreement"). The Purchase Agreement contained an error with respect to the
calculation of the amount to be paid to Universal, using the revenue of the
"Purchased Companies" for calculation of the Post Closing Revenue, rather than
the revenue of Diabetes Self Care, Inc. only, as agreed by the parties. In order
to correct such mistake, and to make additional changes agreed to by the
parties, the parties hereby agree as follows:
1. Sections 2.2(a)(ii) and (iii) of the Asset Purchase Agreement are hereby
replaced in their entirety with the following:
(ii) an amount equal to 75% of the Post Closing Revenue (as defined in
Section 2.5(b)) or $17 million, whichever is less, plus
(iii) the sum (whether positive or negative) of (1) the cash shown on the
Closing Balance Sheets, less (2) the book value at Closing of the Gainor Assumed
Liabilities required to be listed in a balance sheet, prepared in accordance
with GAAP, less (3) all liabilities of the Purchased Companies shown on the
Closing Balance Sheets, and less (4) the amount of the pledge by the Universal
Entities to the American Diabetes Association (the aggregate of (1)-(4) being
referred to herein as the "Closing Net Asset Value"); and
2. The second sentence of Section 2.3(b) is hereby replaced in its entirety
with the following:
The Note shall be reduced post closing as set forth in Section 2.5(b)
3. Section 2.5 (b) of the Asset Purchase Agreement is hereby replaced in its
entirety with the following:
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(b) Upon determination of the Post Closing Revenue (as defined below),
the principal amount of the Note shall be adjusted to equal the lesser of (i)
$17 million or (ii) 75% of the Post Closing Revenue following the procedure set
forth in Section 2.7. "Post Closing Revenue" shall mean the gross revenues of
Diabetes Self Care, Inc. for calendar year 1998, less sales taxes, allowable
adjustments and other sales adjustments, all determined in accordance with GAAP.
In the event that Diabetes Self Care, Inc. is consolidated with other of
Gainor's businesses or companies, then the Post Closing Revenue shall exclude
revenue from then existing customers of such other businesses and companies, but
the revenue of customers of both Diabetes Self Care, Inc. and the consolidated
businesses or companies shall be included in Post Closing Revenue. By February
1, 1999, Gainor shall deliver to Universal a statement showing the Post Closing
Revenue. Universal shall review such statement and shall, within 10 days of
receipt of such statement, notify Gainor in writing of any objections thereto.
If Universal fails to give such notice by such time, Universal shall be deemed
to have agreed with the statement as delivered. If Universal gives such notice
by such time, Gainor and Universal shall then have 10 business days after such
notice to agree on the Post Closing Revenue. If Gainor and Universal are not
able to agree by such time, such statement will be submitted to Ernst & Young,
LLP, Atlanta, Georgia (or any successor accounting firm), who shall have
responsibility for determining the correct Post Closing Revenue, under GAAP,
within 30 days following such submission. Ernst & Young, LLP's (or any such
successor accounting firm's) determination shall be final and binding on Gainor
and Universal. The costs of any such determination shall be shared equally by
Gainor and Universal.
4. Section 2.5(c) of the Asset Purchase Agreement is hereby replaced in its
entirety with the following:
(c) Twelve months following the Closing, the principal amount of the
Note shall be reduced (following the procedure set forth in Section 2.7) in the
event and to the extent that the amount by which collections of the trade
accounts receivable shown on the Closing Balance Sheet shall be less than $6
million during that 12 month period.
5. Section 2.6(a) shall be replaced in its entirety with the word "Omitted".
6. Section 6.6 of Exhibit C to the Asset Purchase Agreement entitled
"Employment Agreement" shall have a new Section 6.6 as follows:
6.6 For a period of three years from the date hereof, Employee shall
not directly or indirectly work for Universal Self Care, Inc. or any of its
subsidiaries, affiliates or successors in interest to its business or
assets, whether as an officer, director, key employee, partner, consultant,
holder of an equity or debt investment, lender or in any other management,
sales, consulting or business development capacity, except in accordance
with the written authorization of HMS.
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Each of the parties hereto has caused this Agreement to be duly executed on its
behalf as of the date indicated on the first page hereof.
GAINOR:
GAINOR MEDICAL MANAGEMENT, LLC GAINOR MEDICAL ACQUISITION COMPANY
By:/s/ Mark J. Gainor By:/s/ Mark J. Gainor
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Mark J. Gainor Mark J. Gainor
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Print Name Print Name
Pres./CEO/Mgr Part. Pres/CEO
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Print Title Print Title
UNIVERSAL:
UNIVERSAL SELF CARE, INC. CLINISHARE DIABETES CENTERS, INC.
By:/s/ Brian D. Bookmeier By:/s/Brian D. Bookmeier
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Brian D. Bookmeier Brian D. Bookmeier
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Print Name Print Name
President President
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Print Title Print Title
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PHYSICIANS SUPPORT SERVICES, INC. USC-MICHIGAN, INC.
Brian D. Bookmeier Brian D. Bookmeier
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Print Name Print Name
President President
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Print Title Print Title
PCS, INC. - WEST DIABETES SELF CARE, INC.
By:/s/ Brian D. Bookmeier By:/s/ Brian D. Bookmeier
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Brian D. Bookmeier Brian D. Bookmeier
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Print Name Print Name
President President
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Print Title Print Title
USCI HEALTHCARE MANAGEMENT SOLUTIONS, INC.
By:/s/ Brian D. Bookmeier
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Brian D. Bookmeier
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Print Name
President
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Print Title
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STOCKHOLDERS:
/s/ Brian D. Bookmeier /s/ Edward T. Buchholz
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BRIAN D. BOOKMEIER EDWARD T. BUCHHOLZ
/s/ Matthew B. Gietzen /s/ Alan M. Korby
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MATTHEW B. GIETZEN ALAN M. KORBY
