<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE
ACT OF 1934)
DATATRAK INTERNATIONAL, INC.
(Name of Issuer)
DATATRAK INTERNATIONAL, INC.
(Name of Person(s) Filing Statement)
COMMON SHARES, WITHOUT PAR VALUE
(Title of Class of Securities)
238134 10 0
(CUSIP Number of Class of Securities)
<TABLE>
<S> <C>
Dr. Jeffrey A. Green Copy to:
President and Chief Executive Officer
DataTRAK International, Inc. Thomas F. McKee, Esq.
20600 Chagrin Boulevard Calfee, Halter & Griswold, LLP
Cleveland, Ohio 44122 1400 McDonald Investment Center
(216) 921-6505 800 Superior Ave., Suite 1400
(Name, Address and Telephone Number of Person Authorized Cleveland, Ohio 44120
to Receive Notices and Communications on Behalf of the (216) 622-8200
Person(s) Filing Statement)
</TABLE>
JULY 12, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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Transaction
Valuation Amount of Filing Fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
$19,800,000.00 (1) $3,960.00 (2)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the purpose of calculating the filing fee only, this amount is
based on the purchase of 3,300,000 Common Shares of DataTRAK
International, Inc. at $6.00 per share.
(2) The amount of the filing fee equals 1/50th of one percent of the value
of the securities to be acquired.
[ ] 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.
<TABLE>
<S> <C>
Amount previously paid: Not applicable. Filing party: Not applicable.
Form or registration no.: Not applicable. Date filed: Not applicable.
</TABLE>
<PAGE> 2
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this statement relates
is DataTRAK International, Inc., an Ohio corporation (the
"Company"). The Company's principal executive offices are
located at 20600 Chagrin Boulevard, Cleveland, Ohio 44122.
(b) The securities being sought are up to 3,300,000 of the
Company's Common Shares, without par value (the "Shares") (or
such lesser number of shares as are properly tendered), at a
price of $ 6.00 per Share, net to the sellers in cash (the
"Purchase Price"). As of July 9, 1999, 6,465,872 of the Shares
were outstanding. In its Offer to Purchase, dated July 12,
1999 (the "Offer to Purchase"), the Company reserved the right
to purchase more than 3,300,000 Shares, but has no current
intention of doing so. The Offer to Purchase and the related
Letter of Transmittal (which, as they may be amended from time
to time, are collectively referred to herein as the "Offer")
are attached hereto as Exhibits (a)(1) and (a)(2). Reference
is hereby made to the Introduction of the Offer to Purchase,
which Introduction is incorporated by reference herein. The
Offer to Purchase is being made to all holders of Shares,
including executive officers, directors and affiliates of the
Company. The Company has been advised that Mr. Black, an
executive officer of the Company, has reserved the right to
tender up to 10,000 Shares pursuant to the Offer, but has not
yet decided whether to do so. Further, the Company has been
advised that certain of its Directors and executive officers
holding an aggregate of 1,025,752 Shares have reserved the
right to tender Shares pursuant to the Offer, but have not
yet decided whether to do so. Reference is hereby made to
Section 10, "Interest of Directors and Officers and Principal
Shareholders; Transactions and Arrangements Concerning
Shares," of the Offer to Purchase, which Section is
incorporated herein by reference. The Company does not
anticipate that the Directors or executive officers will
inform the Company if and when any decision to tender Shares
is made. The Company will not supplement or amend the Offer
if any such Directors or executive officers actually tender
Shares in the Offer.
(c) Reference is hereby made to Section 7, "Price Range of
Shares," of the Offer to Purchase, which Section is
incorporated by reference herein.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Reference is hereby made to Section 8, "Source and Amount of
Funds," of the Offer to Purchase, which Section is
incorporated by reference herein.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Reference is hereby made to the Introduction and Section 2, "Purpose of
the Offer; Certain Effects of the Offer," of the Offer to Purchase, which
Introduction and Section are incorporated by reference herein.
(a) None.
(b) None.
(c) None.
(d) Dr. Alan G. Walton and Mr. Herbert L. Hugill have announced
their intentions to resign from the Board of Directors of the
Company following the Company's annual meeting of shareholders
for 1999.
(e) None.
<PAGE> 3
(f) None.
(g) None.
(h) None.
(i) None.
(j) None.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Reference is hereby made to Section 10, "Interest of Directors and
Officers and Principal Shareholders; Transactions and Arrangements Concerning
Shares," of the Offer to Purchase, which Section is incorporated herein by
reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
Reference is hereby made to Section 10, "Interest of Directors and
Officers and Principal Shareholders; Transactions and Arrangements Concerning
Shares," of the Offer to Purchase, which Section is incorporated herein by
reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the Introduction and Section 15, "Fees and
Expenses," of the Offer to Purchase, which Introduction and Sections are
incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a) Reference is hereby made to Section 9, "Certain Information
about the Company; Recent Developments; Historical and Pro
Forma Financial Information," of the Offer to Purchase, which
Section is incorporated herein by reference. The related
consent of Ernst & Young LLP is filed as Exhibit (a)(9) to
this Schedule 13E-4.
(b) Reference is hereby made to Section 9, "Certain Information
about the Company; Recent Developments; Historical and Pro
Forma Financial Information," of the Offer to Purchase, which
Section is incorporated herein by reference. The related
consent of Ernst & Young LLP is filed as Exhibit (a)(9) to
this Schedule 13E-4.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) Reference is hereby made to Section 12, "Certain Legal
Matters; Regulatory Approvals," of the Offer to Purchase,
which Section is incorporated herein by reference.
(c) Reference is hereby made to Section 11, "Effects of the Offer
on the Market for Shares; Registration under the Exchange
Act," which Section is incorporated herein by reference.
(d) Not applicable.
(e) Not applicable.
<PAGE> 4
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Letter to Shareholders from Dr. Jeffrey A Green, President and
Chief Executive Officer of the Company, dated as of July 12,
1999.
(a)(7) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(8) Press Release dated as of July 12, 1999.
(a)(9) Consent of Ernst & Young LLP.
(a)(10) Acknowledgement of Ernst & Young LLP.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
<PAGE> 5
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Date: July 12, 1999 DATATRAK INTERNATIONAL, INC.
By: /s/ Terry C. Black
Mr. Terry C. Black
Vice President of Finance, Chief
Financial Officer, Treasurer and
Assistant Secretary
<PAGE> 6
INDEX TO EXHIBITS
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Letter to Shareholders from Dr. Jeffrey A Green, President and
Chief Executive Officer of the Company, dated as of July 12,
1999.
(a)(7) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(8) Press Release dated as of July 12, 1998.
(a)(9) Consent of Ernst & Young LLP.
(a)(10) Acknowledgement of Ernst & Young LLP.
<PAGE> 1
EXHIBIT (a)(1)
DATATRAK INTERNATIONAL, INC.
(FORMERLY KNOWN AS COLLABORATIVE CLINICAL RESEARCH, INC.)
OFFER TO PURCHASE FOR CASH UP TO
3,300,000 OF ITS COMMON SHARES
AT A PURCHASE PRICE OF
$6.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN
DAYLIGHT SAVINGS TIME, ON MONDAY, AUGUST 9, 1999, UNLESS THE OFFER IS EXTENDED.
DataTRAK International, Inc., an Ohio corporation, formerly known as
Collaborative Clinical Research, Inc. (the "Company"), hereby invites its
shareholders to tender its common shares, without par value (the "Shares"), to
the Company at $6.00 per Share, net to the seller in cash (the "Purchase
Price"), as specified by tendering shareholders, upon the terms and subject to
the conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, accept for payment, and thereby purchase, up to 3,300,000 Shares validly
tendered and not withdrawn. All Shares acquired in the Offer will be acquired at
the Purchase Price. The Company reserves the right, in its sole discretion, to
purchase more than 3,300,000 Shares pursuant to the Offer. In the event more
than 3,300,000 Shares are validly tendered and not withdrawn, the Company will
accept for payment, and thereby purchase, Shares, other than Odd Lots, on a pro
rata basis (adjusted downward to avoid acceptance for payment of fractional
Shares) upon the terms and subject to the conditions of the Offer. See Section
1. Shares not purchased because of proration will be returned at the Company's
expense.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER, NONE
OF THE COMPANY, ITS BOARD OF DIRECTORS OR THE DEALER MANAGER MAKES ANY
RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING
THEIR SHARES. SHAREHOLDERS MUST INDIVIDUALLY MAKE THE DECISION WHETHER TO TENDER
THEIR SHARES AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED
THAT CERTAIN OF ITS DIRECTORS, EXECUTIVE OFFICERS OR AFFILIATES CONTROLLED BY
SUCH PERSONS INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 10.
The Shares are traded on Nasdaq National Market ("Nasdaq") under the symbol
"DATA." On July 9, 1999, the last full trading day prior to the announcement of
the Offer, the closing sales price per Share as reported on Nasdaq was $5.31.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. See
Section 7.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the address and telephone
numbers set forth on the back cover of this Offer to Purchase.
<PAGE> 2
THE DEALER MANAGER FOR THE OFFER IS:
MCDONALD INVESTMENTS INC.
THE INFORMATION AGENT FOR THE OFFER IS:
MACKENZIE PARTNERS, INC.
------------------------
IMPORTANT
Any shareholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
mail or deliver such Letter of Transmittal, together with any required signature
guarantee, and any other required documents to National City Bank (the
"Depositary"), and either mail or deliver the certificates for such tendered
Shares to the Depositary (together with any other documents required by the
Letter of Transmittal) or tender such Shares pursuant to the procedure for
book-entry transfer set forth in Section 3, or (b) request a broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such shareholder. Holders of Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee should contact such person if
they desire to tender their Shares. Any shareholder who desires to tender Shares
and whose certificates for such Shares are not immediately available or cannot
be delivered to the Depositary or who cannot comply with the procedure for
book-entry transfer or whose other required documents cannot be delivered to the
Depositary, in any case, by the expiration of the Offer must tender such Shares
pursuant to the guaranteed delivery procedure set forth in Section 3.
TO VALIDLY TENDER SHARES, SHAREHOLDERS MUST COMPLETE AND EXECUTE THE LETTER
OF TRANSMITTAL.
<PAGE> 3
TABLE OF CONTENTS
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SECTION PAGE
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SUMMARY ii
FACTORS THAT MAY AFFECT FUTURE RESULTS iv
INTRODUCTION 1
THE OFFER 5
1. Number of Shares; Proration 5
2. Purpose of the Offer; Certain Effects of the Offer 7
3. Procedures for Tendering Shares 9
4. Withdrawal Rights 13
5. Purchase of Shares and Payment of Purchase Price 14
6. Certain Conditions of the Offer 15
7. Price Range of Shares 17
8. Source and Amount of Funds 18
9. Certain Information Concerning the Company 18
10. Interest of Directors and Officers and Principal
Shareholders; Transactions and Arrangements Concerning Shares 23
11. Effects of the Offer on the Market for Shares; Registration
Under the Exchange Act 25
12. Certain Legal Matters; Regulatory Approvals 26
13. Certain United States Federal Income Tax Consequences 26
14. Extension of the Offer; Termination; Amendment 28
15. Fees and Expenses 29
16. Miscellaneous 30
FURTHER INFORMATION 31
</TABLE>
i
<PAGE> 4
SUMMARY
This general summary is provided for the convenience of the Company's
shareholders and is qualified in its entirety by reference to the full text and
more specific details of this Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to be Purchased 3,300,000 Shares (or such lesser number of
Shares as are validly tendered and not
withdrawn).
Purchase Price $6.00 per Share, net to the Seller in
cash. All Shares acquired in the Offer will
be acquired at the Purchase Price.
Conditions to the Offer The Offer is subject to certain conditions.
See Section 6.
How to Tender Shares See Section 3. Call the Information Agent at
(800) 322-2885 or consult your broker for
assistance.
Brokerage Commissions Tendering shareholders who hold Shares in
their own name and who tender their Shares
directly to the Depositary will not be
obligated to pay brokerage commissions.
Shareholders holding Shares through brokers
or banks are urged to consult the brokers or
banks to determine whether the transaction
costs are applicable if shareholders tender
Shares through the brokers or banks and not
directly to the Depositary.
Stock Transfer Tax None, if payment is made to the registered
holder.
Expiration and Proration Dates August 9, 1999 at 5:00 p.m. Eastern Daylight
Savings Time, unless extended by the
Company.
Payment Date As soon as practicable after the Expiration
Date, as defined in Section 1.
Position of the Company and
its Board of Directors Neither the Company nor its Board of
Directors makes any recommendation to any
shareholder as to whether to tender or
refrain from tendering Shares.
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<PAGE> 5
Withdrawal Rights Tendered Shares may be withdrawn at any time
until 5:00 p.m., Eastern Daylight Savings
Time on August 9, 1999 and, unless
previously purchased, after 5:00 p.m.,
Eastern Daylight Savings Time on September
7, 1999. See Section 4.
Proration In the event more than 3,300,000 Shares are
validly tendered and not withdrawn, the
Company will accept for payment, and thereby
purchase Shares, other than Odd Lots, on a
pro rata basis (adjusted downward to avoid
acceptance for payment of fractional
Shares).
Odd Lots There will be no proration of Shares
tendered by any shareholder who owns
beneficially fewer than 100 Shares on July
9, 1999 and on the Expiration Date and who
tenders all of such Shares prior to the
Expiration Date and who checks the "Odd
Lots" box in the Letter of Transmittal. See
Section 1.
iii
<PAGE> 6
FACTORS THAT MAY AFFECT FUTURE RESULTS
Certain sections in this Offer to Purchase, including the "Summary,"
"Introduction" and "Purpose of the Offer; Certain Effects of the Offer," "Source
and Amount of Funds," "Effects of the Offer on the Market for Shares;
Registration Under the Exchange Act" and "Certain Legal Matters; Regulatory
Approvals" contain certain forward-looking statements based on management's
current beliefs, estimates and assumptions concerning the operations, future
results and prospects of the Company and the clinical pharmaceutical research
industry in general. All statements addressing operating performance, events or
developments that management anticipates will occur in the future, including
statements related to future revenue, profits, expenses, income and earnings per
share or statements expressing general optimism about future events are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking
statements are subject to the safe harbors created in the Exchange Act. In
addition, words such as "expects," "anticipates," "intends," "plans,"
"believes," "estimates," variations of such words, and similar expressions are
intended to identify forward-looking statements.
The statements described in the preceding paragraph constitute
"forward-looking statements" within the meaning of Section 21E of the Exchange
Act. Because these statements are based on a number of beliefs, estimates and
assumptions that could cause actual results to materially differ from those in
the forward-looking statements, there is no assurance that forward-looking
statements will prove to be accurate.
Any number of factors could affect future operations and results,
including the following: risk factors set forth in the Company's Annual Report
on Form 10-K for the year ended December 31, 1998; the ability of the Company to
absorb corporate overhead and other fixed costs in order to develop new
software; the development of and fluctuations in the market for electronic data
capture technology; fluctuation in costs and expenses; the degree of the
Company's success in obtaining new contracts; continued unreliability of the
Internet infrastructure; dependence on key personnel; governmental regulation;
potential impact of health care reform; the Company's limited operating history
and lack of profitable operations; the Year 2000 issue; fluctuations in
quarterly results; the early stage of the DataTRAK business and operations;
general economic conditions such as the rate of employment, inflation, interest
rates and the condition of capital markets. This list of factors is not
exclusive.
Forward-looking statements are subject to the safe harbors created in
the Exchange Act. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
iv
<PAGE> 7
TO THE HOLDERS OF COMMON SHARES OF:
DATATRAK INTERNATIONAL, INC.
(FORMERLY KNOWN AS COLLABORATIVE
CLINICAL RESEARCH, INC.)
INTRODUCTION
DataTRAK International, Inc., an Ohio corporation, formerly known as
Collaborative Clinical Research, Inc. (the "Company"), hereby invites its
shareholders to tender its common shares, without par value (the "Shares"), to
the Company at $6.00 per Share, net to the seller in cash (the "Purchase
Price"), as specified by tendering shareholders, upon the terms and subject to
the conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, accept for payment, and thereby purchase, up to 3,300,000 Shares validly
tendered and not withdrawn. All Shares acquired in the Offer will be acquired at
the Purchase Price. In the event more than 3,300,000 Shares are validly tendered
and not withdrawn, the Company will accept for payment, and thereby purchase,
Shares, other than Odd Lots, on a pro rata basis (adjusted downward to avoid
acceptance for payment of fractional Shares) upon the terms and subject to the
conditions of the Offer. See Section 1. Shares not purchased because of
proration will be returned at the Company's expense to the shareholders who
tendered such Shares. The Company reserves the right, in its sole discretion, to
purchase more than 3,300,000 Shares pursuant to the Offer. See Section 14.
The Offer is not conditioned on any minimum number of shares being
tendered. The Offer is, however, subject to certain other conditions. See
Section 6.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NONE OF THE COMPANY, ITS BOARD OF DIRECTORS OR THE DEALER MANAGER MAKES ANY
RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING
THEIR SHARES. SHAREHOLDERS MUST INDIVIDUALLY MAKE THE DECISION WHETHER TO TENDER
THEIR SHARES AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED
THAT CERTAIN OF ITS DIRECTORS, EXECUTIVE OFFICERS OR AFFILIATES CONTROLLED BY
SUCH PERSONS INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 10.
Upon the terms and subject to the conditions of the Offer, if at the
Expiration Date more than 3,300,000 Shares (or such greater number of Shares as
the Company may elect to purchase) are validly tendered and not withdrawn, the
Company will accept Shares first from all Odd Lot Holders (as defined in Section
1) who validly tender, and not withdraw, all their Shares and then on a pro rata
basis from all other shareholders who validly tender, and not withdraw, Shares.
See Section 1.
The Purchase Price will be paid net to the tendering shareholder in
cash for all Shares purchased. Tendering shareholders who hold Shares in their
own name and who tender their Shares directly to the Depositary will not be
obligated to pay brokerage commissions, solicitation fees or,
1
<PAGE> 8
subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes on
the purchase of Shares by the Company pursuant to the Offer. Shareholders
holding Shares registered in the name of brokers or banks are urged to consult
the brokers or banks to determine whether transaction costs are applicable if
shareholders tender Shares through the brokers or banks and not directly to the
Depositary.
Any tendering shareholder or other payee who fails to complete, sign
and return to the Depositary the substitute Form W-9 included as part of the
Letter of Transmittal may be subject to required United States federal income
tax back-up withholding of 31% of the gross proceeds payable to the tendering
shareholder or other payee pursuant to the Offer. See Section 3.
The Company will pay all fees and expenses of McDonald Investments Inc.
("McDonald" or the "Dealer Manager"), MacKenzie Partners, Inc. ("MacKenzie" or
the "Information Agent") and National City Bank ("the Depositary") incurred in
connection with the Offer. See Section 15.
The Board of Directors has determined that the Company's financial
condition, outlook and current market conditions, including the recent trading
prices of the Shares and the sale of the Clinical Business, make this an
attractive time to utilize the Company's cash reserves to repurchase a
significant portion of the issued and outstanding Shares. In the view of the
Board of Directors, the Offer presents an opportunity to provide shareholders
with a return on their investment and represents an attractive investment for
the Company that should benefit the Company and its shareholders over the long
term. In particular, the Board of Directors believes that the purchase of Shares
at this time is consistent with the Company's long-term corporate goal of
seeking to increase shareholder value.
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity, subject to the terms and
conditions of the Offer, to sell those Shares for cash without, where Shares are
tendered by the registered owner thereof directly to the Depositary, the usual
transaction costs associated with open market sales. In addition, the Offer may
give shareholders the opportunity to sell at prices greater than market prices
prevailing prior to the announcement of the Offer. The Offer also allows
shareholders to sell a portion of their Shares while retaining a continuing
equity interest in the Company. Shareholders who determine not to accept the
Offer will realize a proportionate increase in their relative equity interest in
the Company, and thus in the Company's future earnings and assets (subject to
the Company's right to issue additional Shares and other equity securities in
the future). In determining whether to tender Shares pursuant to the Offer,
shareholders should consider the possibility that they may be able to sell their
Shares in the future on Nasdaq or otherwise at a net price higher than the
Purchase Price. Shareholders should also consider the possibility that,
following completion of the Offer, they may not be able to sell their Shares in
the future on Nasdaq or otherwise at a net price as high as the Purchase Price.
In particular, shareholders should consider that the Company may not satisfy
Nasdaq listing standards. See Sections 2 and 11.
As of the close of business on July 9, 1999, the Company had 6,465,872
issued and outstanding Shares and 1,077,208 Shares reserved for issuance upon
the exercise of options to purchase Shares granted under the Company's stock
option plans (collectively, the "Plans"). Of these reserved Shares, 467,050
options have been granted and are exercisable; however 139,434 of these options
have an exercise price above the Purchase Price. See Section 10. The Company is
not, in
2
<PAGE> 9
connection with the Offer, offering to cancel for cash any Options outstanding
under the Plans and tenders of Options will not be accepted. See Section 3.
The 3,300,000 Shares that the Company is offering to purchase pursuant
to the Offer represent approximately 51.0% of the Shares outstanding on July 9,
1999 (approximately 47.6% assuming exercise of outstanding exercisable Options).
The Shares are listed and traded on Nasdaq under the symbol "DATA." On July 9,
1999, the last full trading day prior to the announcement of the Offer, the
closing sales price per Share as reported on Nasdaq was $5.31. SHAREHOLDERS ARE
URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. See Section 7.
Recent Developments. In December 1998, the Company entered into a
definitive agreement to sell its Clinical Business (the operation of a
multi-specialty site management organization that provided clinical research
services to companies in the clinical pharmaceutical, biotechnology, contract
research organization and medical device research industries) to The West
Company, Incorporated ("West"). This sale was approved by the Company's
shareholders on April 14, 1999, and the Clinical Business was sold to West on
April 20, 1999. The Company received $16.8 million, subject to certain
transaction costs and various adjustments for the working capital and the
collection of net accounts receivable of the Clinical Business. At this point,
the Company expects that, after adjustments, it will retain $15.6 million of the
purchase price paid by West.
As the sale of the Clinical Business has transferred substantially all
of the Company's backlog to West; the Company will no longer generate revenue
from or fund the operations of the Clinical Business. Consequently, the DataTRAK
business is the sole source of the Company's revenue and the sole draw on the
Company's working capital. Approximately 95% of the Company's assets, or
approximately $39.0 million, are held in cash, restricted cash, cash equivalents
and short-term investments. The Company expects that it will be required to
fund its continuing operations from working capital.
The DataTRAK business uses a technology platform that consists of
Windows(TM) compatible software and intranet hardware known as DataTRAK EDC(TM)
to provide electronic data capture and information technology services to
various clinical trial sponsors to assist in the more timely completion of
clinical trials. The Company is currently developing the DataTRAK business, has
recognized minimal revenue from this business to date, and has experienced
significant losses and negative cash flow from these operations since the start
of this business. The Company anticipates that its operating results will
fluctuate significantly from period to period. There can be no assurance of the
long-term future prospects of the DataTRAK business. See Section 9.
Based on its previous experience in clinical trials, however, the
Company believes that development of an effective electronic data capture
technology presents significant long-term opportunities for revenue and earnings
growth. The Company purchased a fully operational and marketable software
application, now known as DataTRAK EDC(TM), designed to manage data collected in
clinical pharmaceutical trials in January 1998. The Company currently markets
the DataTRAK EDC(TM) software, and the software is being used in ongoing
clinical trials. Additionally, since its purchase of the software, the Company
has devoted resources to upgrade, modify and improve the software application,
to expand its available uses within the field of clinical pharmaceutical
research, and to research and develop the available markets for the
commercialization of the software.
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The Board of Directors of the Company has worked with the Company's
management and various outside consultants to determine the market viability and
technological strengths of DataTRAK EDC(TM). The Company estimates a capital
expenditure of $2.0 to $2.5 million within a two-year time frame on continued
commercialization and product development in order to more successfully compete
within the currently emerging market for electronic data capture software
applications.
During 1998, the Company began exploring various strategic alliances
and other opportunities to realize the value of the DataTRAK business. The
possibilities included: a strategic alliance under a "consortium" arrangement
similar in structure to federal consortium grants under which the continued
DataTRAK EDC(TM) software development would be conducted through a collaborative
arrangement between the Company and one or more participating institutions, such
as pharmaceutical and medical device companies, who would share financial
resources and data; the sale of the DataTRAK business; a merger with another
entity; or the use of the proceeds from the sale of the Clinical Business to
provide working capital for the further development of the DataTRAK business.
While the Company has received expressions of interest from various parties in
establishing a partnership to develop and implement the DataTRAK technology, it
is not engaged in any discussions or negotiations concerning a sale or merger of
the Company.
On June 26, 1999, the Company signed a nonexclusive three-year,
software license and master services agreement (the "Quintiles Agreement") with
Quintiles, Inc., the product development service group of Quintiles
Transnational Corp., the market leader in providing a full range of integrated
product development and commercialization solutions to the pharmaceutical,
biotechnology and medical device industries. Prior to signing the Quintiles
Agreement, the Company and Quintiles had agreed to use the DataTRAK EDC(TM)
software in one clinical trial.
Under the software-licensing portion of the Quintiles Agreement,
Quintiles has a license to use the Company's five DataTRAK modules. Under the
services portion of the Quintiles Agreement, the Company will also train and
provide help desk assistance to Quintiles employees, investigative site
personnel, and representatives of clinical trial sponsors in the use of the
DataTRAK EDC(TM) software. In addition, pursuant to the agreement, Quintiles and
the Company have set up a steering committee with representatives from each
company to address various issues under the agreement, including software
development, data warehousing and joint marketing efforts.
During the term of the Quintiles Agreement, the Company is free to
continue exploring strategic alliances, consortium arrangement and other
opportunities to realize the value of the DataTRAK business. While the Company
has received indications of interest from various parties since signing the
Quintiles Agreement, no discussions are currently underway.
Although the Quintiles Agreement provides volume-pricing discounts
based on the volume of data entered using the DataTRAK EDC(TM) software, it does
not obligate Quintiles to use the software. There can be no assurance that
revenues from the Quintiles Agreement will be sufficient either to fund
continued DataTRAK EDC(TM) commercialization and product development or to
compete successfully in the EDC software applications market.
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<PAGE> 11
THE OFFER
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer, the Company
will purchase 3,300,000 Shares or such lesser number of Shares as are validly
tendered and not withdrawn prior to the Expiration Date (as defined below) at a
price of $6.00 per Share, net to the seller in cash.
The term "Expiration Date" means 5:00 p.m., Eastern Daylight Savings
Time, on Monday, August 9, 1999, unless and until the Company, in its sole
discretion, shall have extended the period of time during which the Offer will
remain open, in which event the term "Expiration Date" shall refer to the latest
time and date at which the Offer, as so extended by the Company, shall expire.
See Section 14 for a description of the Company's right to extend, delay,
terminate or amend the Offer.
The Company reserves the right, in its sole discretion, to purchase
more than 3,300,000 Shares pursuant to the Offer. In accordance with applicable
regulations of the Securities and Exchange Commission (the "Commission"), the
Company may purchase, pursuant to the Offer, an additional amount of Shares not
to exceed 2% of the outstanding Shares without amending or extending the Offer.
See Section 14. In the event of an over-subscription of the Offer, Shares
tendered prior to the Expiration Date (other than Odd Lots) will be subject to
proration, as described below. The proration period also expires on the
Expiration Date.
If:
- -- the Company changes the Purchase Price from $6.00 per Share;
-- the Company materially increases the Dealer Manager fee;
-- the Company increases the number of Shares being sought in the
Offer and such increase in the number of Shares being sought
exceeds 2% of the outstanding Shares; or
-- the Company decreases the number of Shares being sought;
AND
- -- the Offer is scheduled to expire at any time earlier than the
expiration of the period ending on the tenth business day from,
and including, the date that notice of such increase or decrease
is first published, sent or given in the manner specified in
Section 14,
then the Offer will be extended until the expiration of such period of
ten business days.
THE OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER OF
SHARES. HOWEVER, THE OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION
6.
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<PAGE> 12
If the number of Shares validly tendered and not withdrawn prior to the
Expiration Date is less than or equal to 3,300,000 Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer),
the Company will, upon the terms and subject to the conditions of the Offer,
accept for payment and thereby purchase, all Shares so tendered at the Purchase
Price. All Shares tendered and not purchased pursuant to the Offer, including
Shares not purchased because of proration, will be returned to the tendering
shareholders at the Company's expense as promptly as practicable following the
Expiration Date. The Company reserves the right, in its sole discretion to
purchase more than 3,300,000 Shares pursuant to the Offer. See Section 14.
Priority of Purchases. Upon the terms and subject to the conditions of
the Offer, if more than 3,300,000 Shares (or such greater number of Shares as
the Company may elect to purchase) have been validly tendered, and not
withdrawn, prior to the Expiration Date, the Company will accept for payment and
therefore purchase validly tendered Shares on the basis set forth below:
(a) first, all Shares validly tendered and not withdrawn prior to
the Expiration Date by any Odd Lot Holder (as defined below)
who:
(1) tenders all Shares owned beneficially or of record by
such Odd Lot Holder (tenders of less than all the
Shares owned by such Odd Lot Holder will not qualify
for this preference); and
(2) completes the section entitled "Odd Lots" in the
Letter of Transmittal and, if applicable, in the
Notice of Guaranteed Delivery; and
(b) second, after the purchase of all of the foregoing Shares, all
other Shares validly tendered, and not withdrawn, prior to the
Expiration Date, on a pro rata basis (adjusted downward to
avoid acceptance for payment of fractional Shares), as
described below.
Odd Lots. For purposes of the Offer, the term "Odd Lots" means all
Shares validly tendered prior to the Expiration Date and not withdrawn by any
person (an "Odd Lot Holder") who owned beneficially or of record as of the close
of business on July 9, 1999, and who continues to own beneficially or of record
as of the Expiration Date, an aggregate of fewer than 100 Shares and so
certified in the appropriate place on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery. In order to qualify for this
preference, an Odd Lot Holder must tender all Shares owned by the Odd Lot Holder
in accordance with the procedures described in Section 3. As set forth above,
Odd Lots will be accepted for payment before proration, if any, of the purchase
of other tendered Shares. This preference is not available to partial tenders by
an Odd Lot Holder or to beneficial or record holders of an aggregate of 100 or
more Shares, even if these holders have separate accounts or certificates
representing fewer than 100 Shares. By accepting the Offer, an Odd Lot Holder
who holds Shares in its name and tenders its Shares directly to the Depositary
would not only avoid the payment of brokerage commissions, but also would avoid
any applicable odd lot discount in a sale of the holder's Shares. Any Odd Lot
Holder wishing to tender all of such holder's Shares pursuant to the Offer
should complete the section entitled "Odd Lots" in the Letter of Transmittal
and, if applicable, in the Notice of Guaranteed Delivery.
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<PAGE> 13
The Company also reserves the right, but will not be obligated, to
purchase all Shares duly tendered by any shareholder who tenders all Shares
beneficially owned and who, as a result of proration, would then beneficially
own an aggregate of fewer than 100 Shares. If the Company exercises this right,
it will increase the number of Shares that it is offering to purchase in the
Offer by the number of Shares purchased through the exercise of such right.
Proration. In the event that proration of tendered Shares is required,
the Company will determine the proration factor as soon as practicable following
the Expiration Date. Proration for each shareholder tendering Shares, other than
Odd Lot Holders, will be based on the ratio of the number of Shares validly
tendered and not properly withdrawn by such shareholder to the total number of
Shares validly tendered and not properly withdrawn by all shareholders, other
than Odd Lot Holders. Because of the difficulty in determining the number of
Shares validly tendered (including Shares tendered by guaranteed delivery
procedures, as described in Section 3) and not properly withdrawn, and because
of the Odd Lot procedure, the Company does not expect that it will be able to
announce the final proration factor or commence payment for any Shares purchased
pursuant to the Offer until approximately five business days after the
Expiration Date. The preliminary results of any proration will be announced by
press release as promptly as practicable after the Expiration Date. Shareholders
may obtain preliminary proration information from the Information Agent and may
be able to obtain such information from their brokers.
As described in Section 13, the number of Shares that the Company will
purchase from a shareholder pursuant to the Offer may affect the United States
federal income tax consequences to the shareholder of the purchase and,
therefore, may be relevant to a shareholder's decision whether or not to tender
Shares.
This Offer to Purchase and the related Letter of Transmittal will be
mailed to shareholders who were record holders of Shares as of July 9, 1999, and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the Company's shareholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity, subject to the terms and
conditions of the Offer, to sell such Shares for cash without, where Shares are
tendered by the registered owner directly to the Depositary, the usual
transaction costs associated with open market sales. In addition, Odd Lot
Holders who hold Shares in their names and tender their Shares directly to the
Depositary and whose Shares are purchased pursuant to the Offer not only will
avoid the payment of brokerage commissions, but also will avoid any applicable
odd lot discount payable on a sale of their Shares in a transaction on Nasdaq.
The Offer also allows shareholders to sell a portion of their Shares
while retaining a continuing equity interest in the Company. Shareholders who
determine not to accept the Offer will realize a proportionate increase in their
relative equity interest in the Company, and thus in the Company's future
earnings and assets, subject to the Company's right to issue additional Shares
and other equity securities in the future. Shareholders may be able to sell
non-tendered Shares in the
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<PAGE> 14
future on Nasdaq or otherwise, including in connection with a sale of the
Company, at a net price higher than the Purchase Price. The Company can give no
assurance, however, as to the price at which a shareholder may be able to sell
Shares in the future. Shareholders should also consider the possibility that,
following completion of the Offer, they may not be able to sell their Shares in
the future on Nasdaq or otherwise at a net price as high as the Purchase Price.
In particular, shareholders should consider that the Company may not satisfy
Nasdaq listing standards. Such a delisting of the Shares could result in a
substantial decrease in the liquidity of the Shares and have a material adverse
effect on the market value of the Shares. See Section 11.
The Board of Directors has determined that the Company's financial
condition, outlook and current market conditions, including the recent trading
prices of Shares and the sale of the Clinical Business, make this an attractive
time to repurchase outstanding Shares. In the view of the Board of Directors,
the Offer represents an attractive investment that should benefit the Company
and its shareholders over the long term by reducing the number of outstanding
shares and by increasing shareholder value by making cash payments to
shareholders who tender outstanding shares. In particular, the Board of
Directors believes that the purchase of Shares at this time is consistent with
the Company's long-term corporate goal of seeking to increase shareholder value.
In approving the Offer, one of the directors dissented, stating that it was his
view that the purchase price should be lower. The funds required to complete the
Offer and pay related expenses will be provided from short-term investments,
cash and cash equivalents. See Section 8.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NONE OF THE COMPANY, ITS BOARD OF DIRECTORS OR THE DEALER MANAGER MAKES ANY
RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING
THEIR SHARES AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION.
SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER,
CONSULT WITH THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS
BEEN ADVISED THAT CERTAIN OF ITS DIRECTORS, EXECUTIVE OFFICERS OR AFFILIATES
CONTROLLED BY SUCH PERSONS INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE
SECTION 10.
The Company may in the future purchase additional Shares on the open
market, in private transactions, through tender offers or otherwise, subject to
the approval of the Board of Directors. In particular, the Board of Directors
may repurchase Shares in the open market beginning after the expiration of the
period of ten business days after the Expiration Date. Future purchases by the
Company may be on the same terms or on terms that are more or less favorable to
shareholders than the terms of the Offer. Rule 13e-4 under the Exchange Act
prohibits the Company and its affiliates from purchasing any Shares, other than
pursuant to the Offer, until at least ten business days after the Expiration
Date. Any possible future purchases by the Company pursuant to this intention or
otherwise will depend on many factors, including the market price of the Shares,
the results of the Offer, the Company's business and financial position and
general economic and market conditions.
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<PAGE> 15
Shares the Company acquires pursuant to the Offer will be held in the
Company's treasury (unless and until the Company determines to retire any such
Shares) and will be available for the Company to issue without further
shareholder action (except as required by applicable law or the rules applicable
to companies with shares traded on Nasdaq or any other securities exchange on
which the Shares may be listed) for purposes including, but not limited to the
raising of additional capital for use in the Company's business and the
satisfaction of obligations under existing or future employee benefit plans. The
Company has no current plans for the issuance of Shares repurchased pursuant to
the Offer by the Company. The repurchased Shares will be authorized but unissued
Shares.
Except as disclosed in this Offer to Purchase, the Company currently
has no plans or proposals that relate to or would result in: (a) the acquisition
by any person of additional securities of the Company or the disposition of
securities of the Company; (b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or any of its
subsidiaries; (c) any change in the present Board of Directors or management of
the Company; (d) any material change in the present dividend rate or policy, or
indebtedness or capitalization of the Company; (e) any other material change in
the Company's corporate structure or business; (f) any change in the Company's
Articles of Incorporation or Code of Regulations or other actions which may
impede the acquisition of control of the Company by any person; (g) a class of
equity security of the Company being delisted from a national securities
exchange or ceasing to be authorized for quotation in an inter-dealer quotation
system of a registered national securities association; (h) a class of equity
security of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (i) the suspension of the
Company's obligation to file reports pursuant to Section 15(d) of the Exchange
Act.
Dr. Alan G. Walton and Mr. Herbert L. Hugill have announced their
intention to resign from the Board of Directors of the Company following the
Company's annual meeting of shareholders for 1999.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender of Shares. For Shares to be validly tendered pursuant to
the Offer (a) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedure for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), including any required signature guarantees,
and any other documents required by the Letter of Transmittal, must be received
prior to 5:00 p.m., Eastern Daylight Savings Time, on the Expiration Date by the
Depositary at its address set forth on the back cover of this Offer to Purchase,
or (b) the tendering shareholder must comply with the guaranteed delivery
procedure set forth below.
ODD LOT HOLDERS WHO TENDER ALL SHARES MUST COMPLETE THE SECTION
CAPTIONED "ODD LOTS" IN THE LETTER OF TRANSMITTAL AND, IF APPLICABLE, IN THE
NOTICE OF GUARANTEED DELIVERY, TO QUALIFY FOR THE PREFERENTIAL TREATMENT
AVAILABLE TO ODD LOT HOLDERS AS SET FORTH IN SECTION 1.
SHAREHOLDERS WHO HOLD SHARES THROUGH BROKERS OR BANKS ARE URGED TO
CONSULT THE BROKERS OR BANKS TO DETERMINE WHETHER
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<PAGE> 16
TRANSACTION COSTS ARE APPLICABLE IF SHAREHOLDERS TENDER SHARES THROUGH THE
BROKERS OR BANKS AND NOT DIRECTLY TO THE DEPOSITARY.
Signature Guarantees and Method of Delivery. No signature guarantee is
required if: (i) the Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depository Trust Company (the "Book-Entry Transfer Facility")
whose name appears on a security position listing as the owner of the Shares)
tendered therewith and such holder has not completed the box entitled "Special
Payment Instructions" on the Letter of Transmittal; or (ii) the Shares are
tendered for the account of a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program or a bank, broker, dealer, credit union,
savings association or other entity which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Exchange Act
(each of the foregoing constituting an "Eligible Institution"). See Instruction
1 of the Letter of Transmittal. If a certificate for Shares is registered in the
name of a person other than the person executing a Letter of Transmittal, or if
payment is to be made, or Shares not purchased or tendered are to be issued to a
person other than the registered holder, then the certificate must be endorsed
or accompanied by an appropriate stock power, in either case, signed exactly as
the name of the registered holder appears on the certificate, with the signature
guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of the book-entry
transfer of the Shares into the Depositary's account at the Book-Entry Transfer
Facility as described above), a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR
SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE
ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, THEN
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with
respect to the Shares for purposes of the Offer at the Book-Entry Transfer
Facility within two business days after the date of this Offer to Purchase, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing the
Book-Entry Transfer Facility to transfer Shares into the Depositary's account in
accordance with the Book-Entry Transfer Facility's procedures for transfer.
Although delivery of Shares may be effected through a book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility, either (i) a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) with any required signature guarantees and any other required
documents must, in any case, be transmitted to and received by the Depositary at
its address set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or (ii) the guaranteed delivery procedure described below must
be followed. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
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<PAGE> 17
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
United States Federal Income Tax Backup Withholding. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Internal Revenue Service (the "IRS"), unless the
shareholder or other payee provides its taxpayer identification number (employer
identification number or social security number) to the Depositary (as payor)
and certifies under penalties of perjury that such number is correct. Therefore,
each tendering shareholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding. If the Depositary is
not provided with the correct taxpayer identification number, the United States
Holder (as defined in Section 13 herein) also may be subject to a penalty
imposed by the IRS. If withholding results in an overpayment of taxes, a refund
may be obtained. Certain "exempt recipients" (including, among others, all
corporations and certain Non-United States Holders (as defined in Section 13
herein)) are not subject to these backup withholding and information reporting
requirements. In order for a Non-United States Holder to qualify as an exempt
recipient, that shareholder must submit an IRS Form W-8 or a Substitute Form
W-8, signed under penalties of perjury, attesting to that shareholder's exempt
status. Such statements can be obtained from the Depositary. See Instruction 12
of the Letter of Transmittal.
Withholding for Non-United States Holders. Even if a Non-United States
Holder has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 31% of the
gross payments payable to a Non-United States Holder or such Holder's agent
unless the Depositary determines that a reduced rate of withholding is available
pursuant to a tax treaty or that an exemption from withholding is applicable
because the gross proceeds are effectively connected with the conduct of a trade
or business within the United States. In order to obtain a reduced rate of
withholding pursuant to a tax treaty, a Non-United States Holder must deliver to
the Depositary before the payment a properly completed and executed IRS Form
1001. In order to obtain an exemption from withholding on the grounds that the
gross proceeds paid pursuant to the Offer are effectively connected with the
conduct of a trade or business within the United States, a Non-United States
Holder must deliver to the Depositary a properly completed and executed IRS Form
4224. The Depositary will determine a shareholder's status as a Non-United
States Holder and eligibility for a reduced rate of, or exemption from,
withholding by reference to any outstanding certificates or statements
concerning eligibility for a reduced rate of, or exemption from, withholding
(e.g., IRS Form 1001 or IRS Form 4224) unless facts and circumstances indicate
that such reliance is not warranted. A Non-United States Holder may be eligible
to obtain a refund of all or a portion of any tax withheld if such Non-United
States Holder meets those tests described in Section 13 that would characterize
the exchange as a sale (as opposed to a dividend) or is otherwise able to
establish that no tax or a reduced amount of tax is due.
NON-UNITED STATES HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING,
INCLUDING ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND THE
REFUND PROCEDURE.
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<PAGE> 18
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant
to the Offer and the shareholder's Share certificates are not immediately
available or cannot be delivered to the Depositary prior to the Expiration Date
(or the procedure for book-entry transfer cannot be completed on a timely basis)
or if time will not permit all required documents to reach the Depositary prior
to the Expiration Date, the Shares may nevertheless be tendered, provided that
all of the following conditions are satisfied:
(a) the tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, overnight courier,
telegram or facsimile transmission, on or prior to the
Expiration Date, a properly completed and duly executed Notice
of Guaranteed Delivery in the form the Company has provided
with this Offer to Purchase, including (where required) a
signature guarantee by an Eligible Institution in the form set
forth in such Notice of Guaranteed Delivery; and
(c) the certificates for all tendered Shares, in proper form for
transfer (or confirmation of book-entry transfer of such
Shares into the Depositary's account at the Book-Entry
Transfer Facility), together with a properly completed and
duly executed Letter of Transmittal (or a manually signed
facsimile thereof) and any required signature guarantees or
other documents required by the Letter of Transmittal, are
received by the Depositary within three Nasdaq trading days
after the date of receipt by the Depositary of the Notice of
Guaranteed Delivery.
Return of Tendered Shares. If any tendered Shares are not purchased, or
if less than all Shares evidenced by a shareholder's certificates are tendered,
certificates for unpurchased Shares will be returned as promptly as practicable
after the expiration or termination of the Offer or, in the case of Shares
tendered by book-entry transfer at the Book-Entry Transfer Facility, the Shares
will be credited to the appropriate account maintained by the tendering
shareholder at the Book-Entry Transfer Facility, in each case without expense to
the shareholder.
Company Option Plans. The Company is not offering, as part of the
Offer, to cancel for cash any Options outstanding under the Company's Option
Plans, and tenders of Options will not be accepted. Holders of Options who wish
to participate in the Offer must exercise their Options and purchase Shares
subject to the Option and then tender the Shares pursuant to the Offer; provided
that, any exercise of an Option and tender of Shares is in accordance with the
terms of the Option Plans and the Options and is in compliance with all
applicable federal and state securities laws. In no event are any Options to be
delivered to the Depositary in connection with a tender of Shares hereunder. An
exercise of an Option cannot be revoked even if Shares received upon the
exercise and tendered in the Offer are not purchased in the Offer for any
reason.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. Questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company in its reasonable judgment, and its
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders of any Shares that it determines
are not in proper form or the acceptance for payment of or payment for which
may, in the opinion of the Company's counsel, be
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<PAGE> 19
unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in any tender with respect
to any particular Shares or any particular shareholder. The Company's
interpretation of the terms of the Offer will be final and binding on all
parties. No tender of Shares will be deemed to have been properly made until all
defects or irregularities have been cured by the tendering shareholder or waived
by the Company. None of the Company, the Dealer Manager, the Depositary or any
other person shall be obligated to give notice of any defects or irregularities
in tenders, nor shall any of them incur any liability for failure to give any
notice.
Tendering Shareholder's Representation and Warranty; Company's
Acceptance Constitutes an Agreement. A tender of Shares pursuant to any of the
procedures described above will constitute the tendering shareholder's
acceptance of the terms and conditions of the Offer, as well as the tendering
shareholder's representation and warranty to the Company that, among other
things, (a) the shareholder has a "net long position" (as defined in Rule 14e-4
promulgated by the Commission under the Exchange Act) in the Shares or
equivalent securities at least equal to the Shares tendered within the meaning
of Rule 14e-4 and (b) the tender of Shares complies with Rule 14e-4. It is a
violation of Rule 14e-4 for a person, directly or indirectly, to tender Shares
for that person's own account unless, at the time of tender and at the end of
the proration period or period during which Shares are accepted by lot
(including any extensions thereof), the person so tendering both (i) has a net
long position equal to or greater than the amount of (x) Shares tendered or (y)
other securities immediately convertible into or exchangeable or exercisable for
the Shares tendered and will acquire the Shares for tender by conversion,
exchange or exercise and (ii) will deliver or cause to be delivered the Shares
in accordance with the terms of the Offer. Rule 14e-4 provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person. The Company's acceptance for payment of Shares tendered pursuant
to the Offer will constitute a binding agreement between the tendering
shareholder and the Company upon the terms and conditions of the Offer.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST
BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE VALIDLY TENDERED.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be withdrawn
at any time after 5:00 p.m., Eastern Daylight Savings Time, on September 7,
1999.
For a withdrawal to be effective, a notice of withdrawal must be in
written form and transmitted by mail, overnight courier, hand-delivery,
telegraph, telex or facsimile and must be received in a timely manner by the
Depositary at the address set forth on the back cover of this Offer to Purchase.
Any such notice of withdrawal must specify the name of the tendering
shareholder, the
13
<PAGE> 20
number of Shares to be withdrawn and the name of the registered holder of such
Shares. If the certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering shareholder must also submit the serial numbers
shown on the particular certificates for Shares to be withdrawn and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered for the account of an
Eligible Institution). If Shares have been tendered pursuant to the procedure
for book-entry transfer set forth in Section 3, the notice of withdrawal also
must specify the name and the number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and must otherwise comply with
the Book-Entry Transfer Facility's procedures. All questions as to the form and
validity (including the time of receipt) of any notice of withdrawal will be
determined by the Company, in its sole discretion, which determination will be
final and binding. None of the Company, the Dealer Manager, the Depositary or
any other person shall be obligated to give notice of any defects or
irregularities in any notice of withdrawal, nor shall any of them incur
liability for failure to give any notice. Withdrawals may not be rescinded and
any Shares properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer unless the withdrawn Shares are validly retendered prior
to the Expiration Date by following one of the procedures described in Section
3.
If the Company extends the Offer, is delayed in its purchase of Shares
or is unable to purchase Shares pursuant to the Offer for any reason, then,
without prejudice to the Company's rights under the Offer, the Depositary may,
subject to applicable law, retain tendered Shares on behalf of the Company, and
such Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, as promptly
as practicable following the Expiration Date, the Company will accept for
payment and thereby purchase Shares validly tendered, and not withdrawn, prior
to the Expiration Date at the Purchase Price. For purposes of the Offer, the
Company will be deemed to have accepted for payment, and therefore purchased,
Shares that are validly tendered and not withdrawn (subject to the proration
provisions of the Offer) only when and if it gives written notice to the
Depositary of its acceptance of the Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date the Company will accept for payment and pay the
Purchase Price per Share for 3,300,000 Shares (subject to increase or decrease
as provided in Section 14) validly tendered, or such lesser number of Shares as
are validly tendered and not withdrawn as permitted in Section 4.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering shareholders.
In the event of proration, the Company will determine the proration
factor and pay for those tendered Shares accepted for payment as soon as
practicable after the Expiration Date; however, the
14
<PAGE> 21
Company does not expect to be able to announce the final results of any
proration and commence payment for Shares purchased until approximately five
business days after the Expiration Date. Certificates for all Shares tendered
and not purchased due to proration, will be returned (or, in the case of Shares
tendered by book-entry transfer, will be credited to the account maintained with
the Book-Entry Transfer Facility by the participant therein who so delivered the
Shares) to the tendering shareholder at the Company's expense as promptly as
practicable after the Expiration Date or termination of the Offer without
expense to the tendering shareholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON
THE PURCHASE PRICE BE PAID BY THE COMPANY BY REASON OF ANY DELAY IN MAKING
PAYMENT. In addition, if certain events occur, the Company may not be obligated
to purchase Shares pursuant to the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or the other person), payable on account of the transfer to
the person will be deducted from the Purchase Price unless satisfactory evidence
of the payment of the stock transfer taxes, or exemption therefrom, is
submitted. See Instruction 6 of the Letter of Transmittal.
6. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company will not
be required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment of,
or the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
under the Exchange Act, if at any time on or after July 9, 1999, and prior to
the Expiration Date, any of the following events shall have occurred (or shall
have been determined by the Company to have occurred) that, in the Company's
reasonable judgment and regardless of the circumstances giving rise thereto
(including any action or omission to act by the Company), makes it inadvisable
to proceed with the Offer or with acceptance for payment:
(a) there shall have been threatened, instituted or pending any
action or proceeding by any government or governmental,
regulatory or administrative agency, authority or tribunal or
any other person, domestic or foreign, before any court,
authority, agency or tribunal that directly or indirectly (i)
challenges the making of the Offer, the acquisition of some or
all of the Shares pursuant to the Offer or otherwise relates
in any manner to the Offer, or (ii) in the Company's
reasonable judgment, could materially and adversely affect the
business, condition (financial or otherwise), income,
operations or prospects of the Company and its subsidiaries,
taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company
or any of its subsidiaries or materially impair the
contemplated benefits of the Offer to the Company;
15
<PAGE> 22
(b) there shall have been any action threatened, pending or taken,
or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to
be applicable to the Offer or the Company or any of its
subsidiaries, by any court or any authority, agency or
tribunal that, in the Company's reasonable judgment, would or
might directly or indirectly (i) make the acceptance for
payment of, or payment for, some or all of the Shares illegal
or otherwise restrict or prohibit consummation of the Offer,
(ii) delay or restrict the ability of the Company, or render
the Company unable, to accept for payment or pay for some or
all of the Shares, (iii) materially impair the contemplated
benefits of the Offer to the Company, (iv) materially and
adversely affect the business, condition (financial or other),
income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair
in any way the contemplated future conduct of the business of
the Company or any of its subsidiaries, or (v) make it likely
that the Shares would be delisted from trading on Nasdaq
following the Offer;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter
market, (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United
States, (iii) the commencement of a war, armed hostilities or
other international or national calamity directly or
indirectly involving the United States, (iv) any limitation
(whether or not mandatory) by any governmental, regulatory or
administrative agency or authority on, or any event that, in
the Company's reasonable judgment, might affect, the extension
of credit by banks or other lending institutions in the United
States, (v) any significant decrease in the market price of
the Shares or any change in the general political, market,
economic or financial conditions in the United States or
abroad that could, in the reasonable judgment of the Company,
have a material adverse effect on the Company's business,
operations or prospects or the trading in the Shares, (vi) in
the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or
worsening thereof, or (vii) any decline in either the Dow
Jones Industrial Average or the Standard and Poor's Index of
500 Industrial Companies by an amount in excess of 10%
measured from the close of business on July 9, 1999;
(d) a tender or exchange offer for any or all of the Shares (other
than the Offer), or any merger, business combination or other
similar transaction with or involving the Company or any
subsidiary, shall have been proposed, announced or made by any
person;
(e)(i) any entity, person or "group" (as that term is used in Section
13(d)(3) of the Exchange Act) shall have acquired or proposed
to acquire beneficial ownership of more than 5% of the
outstanding Shares (other than any such person, entity or
group who has filed a Schedule 13D or Schedule 13G with the
Commission on or before July 9, 1999), (ii) any such entity,
group or person who has filed a Schedule 13D or Schedule 13G
with the Commission on or before the Expiration Date shall
have acquired or proposed to acquire beneficial ownership of
an additional 2% or more of the outstanding Shares, or
16
<PAGE> 23
(iii) any person, entity or group shall have filed a
Notification and Report Form under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, or made a
public announcement reflecting an intent to acquire the
Company or any of its subsidiaries or any of their respective
assets or securities other than in connection with a
transaction authorized by the Board of Directors; or
(f) any change or changes shall have occurred in the business,
financial condition, assets, income, operations, prospects or
stock ownership of the Company or its subsidiaries that, in
the Company's reasonable judgment, is or may have a material
adverse significance to the Company or its subsidiaries.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
omission by the Company) giving rise to any such condition, and may be waived by
the Company, in whole or in part, at any time and from time to time in its
reasonable judgment. The Company's failure at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Company concerning the events
described above will be final and binding.
7. PRICE RANGE OF SHARES.
The Shares are listed and traded on Nasdaq under the symbol "DATA." The
following table sets forth, for the fiscal quarters indicated, the high and low
closing per Share sales prices on Nasdaq as compiled from published financial
sources in each of such fiscal quarters.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Fiscal Year Ended December 31, 1997:
1st Quarter $12.75 $7.00
2nd Quarter $ 8.25 $5.75
3rd Quarter $ 7.38 $5.63
4th Quarter $ 6.63 $4.50
Fiscal Year Ended December 31, 1998:
1st Quarter $ 5.25 $3.75
2nd Quarter $ 4.75 $4.06
3rd Quarter $ 4.38 $2.69
4th Quarter $ 4.31 $2.50
Fiscal Year Ended December 31, 1999:
1st Quarter: $ 4.88 $4.00
2nd Quarter $ 5.13 $4.19
Third Quarter Through July 9, 1999 $ 5.56 $5.19
</TABLE>
17
<PAGE> 24
On July 9, 1999, the last full trading day prior to the announcement of
the Offer, the closing per Share sales price as reported on Nasdaq was $5.31.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
8. SOURCE AND AMOUNT OF FUNDS.
Assuming the Company purchases 3,300,000 Shares pursuant to the Offer
at the Purchase Price, the Company expects the maximum aggregate cost, including
all fees and expenses applicable to the Offer, to be approximately $20 million.
The Company expects to fund the purchase of Shares pursuant to the Offer and the
payment of related fees and expenses from available cash, short-term investments
and cash equivalents.
In December 1998, the Company entered into a definitive agreement to
sell its Clinical Business (the operation of a multi-specialty site management
organization that provided clinical research services to companies in the
clinical pharmaceutical, biotechnology, contract research organization and
medical device research industries) to West. This sale was approved by the
Company's shareholders on April 14, 1999, and the Clinical Business was sold to
West on April 20, 1999 (the "Closing Date"). The Company received $16.8 million,
subject to certain transaction costs and various adjustments. At this point the
Company expects that, after adjustments, it will retain $15.6 million of the
purchase price paid by West. At July 9, 1999, the Company had available cash,
restricted cash, cash equivalents and short term investments of approximately
$39 million.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
The Company was incorporated in the State of Ohio in 1991 under the
name Collaborative Clinical Research, Inc. The Company provides electronic data
capture and other services to companies in the clinical pharmaceutical,
biotechnology, contract research organization and medical device research
industries. The Company's principal executive office is located at 20600 Chagrin
Boulevard, Cleveland, Ohio 44122.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
Following is a summary of certain historical consolidated financial
information with respect to the Company for the periods indicated. The summary
financial information (other than book value per share) set forth for the years
ended December 31, 1997 and 1998 is summarized or prepared from the audited
consolidated financial statements set forth in the Company's Annual Report on
Form 10-K for the year ended December 31, 1998 (the "Company's 1998 Annual
Report"). The financial information (other than book value per share) set forth
below for the three months ended March 31, 1998 and 1999 is summarized or
prepared from the unaudited consolidated financial statements set forth in the
company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998
(the "Company's 1998 First Quarter Report") and for the quarter ended March 31,
1999 (the "Company's 1999 First Quarter Report"). The Company's 1998 Annual
Report, the Company's 1998 First Quarter
18
<PAGE> 25
Report and the Company's 1999 First Quarter Report are hereby incorporated
herein by reference. More comprehensive financial information is included in
such reports and the information below is qualified in its entirety by reference
to such reports and all of the financial statements and related notes contained
therein, copies of which may be obtained as set forth below under the caption
"Further Information."
DATATRAK INTERNATIONAL, INC.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Three Months
Year Ended Ended
December 31, March 31,
--------------------- --------------------
1997 1998 1998 1999
-------- -------- ------- -------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue $ 17,327 $ 13,226 $ 2,364 $ 4,180
Direct costs 12,637 10,511 2,025 2,649
-------- -------- ------- -------
Gross profit 4,690 2,715 339 1,531
Selling, general and administrative 10,009 8,969 2,657 2,518
expenses
Impairment charge -- 6,056 -- --
Special items 2,995 1,998 1,440 --
Depreciation and amortization 1,015 1,155 270 249
-------- -------- ------- -------
Loss from operations (9,329) (15,463) (4,028) (1,236)
Other income (expense) 1,888 1,467 465 167
-------- -------- ------- -------
Loss before income taxes (7,441) (13,996) (3,563) (1,069)
Income tax expense (benefit) (58) 80 55 40
-------- -------- ------- -------
Net loss $ (7,383) $(14,076) $(3,618) $(1,109)
======== ======== ======= =======
Net loss per share: basic $ (1.16) $ (2.19) $ (0.56) $ (0.17)
======== ======== ======= =======
Shares used in the computation of basic
net loss per share 6,384 6,422 6,419 6,428
======== ======== ======= =======
Net loss per share: diluted $ (1.16) $ (2.19) $ (0.56) $ (0.17)
======== ======== ======= =======
Shares used in the computation of diluted
net loss per share 6,384 6,422 6,419 6,428
======== ======== ======= =======
</TABLE>
19
<PAGE> 26
<TABLE>
<CAPTION>
December 31, March 31,
--------------------- ---------------------
1997 1998 1998 1999
-------- -------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and short-term
investments $ 33,613 $ 26,693 $ 33,269 $ 23,785
Working capital 33,021 24,489 28,564 23,570
Total assets 48,321 33,540 45,511 31,814
Long-term liabilities -- -- -- --
Accumulated deficit (7,347) (21,423) (10,965) (22,532)
Total shareholders' equity 42,350 28,238 38,735 27,155
Book value per common share(a) $ 6.60 $ 4.40 $ 6.03 $ 4.22
</TABLE>
- ----------------
(a) Book value per share is calculated as total shareholders' equity divided by
the number of shares outstanding at the end of the period.
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following summary unaudited pro forma consolidated financial
information gives effect to the sale of the Company's Clinical Business to The
West Company, Incorporated ("West"), which occurred on April 20, 1999, and to
the purchase of Shares pursuant to the offer, based on the assumptions described
in the Notes to Summary Unaudited Pro Forma Consolidated Financial Information.
It is assumed that the above described transactions occurred on the first date
of each of the periods presented with respect to the statement of operations
data, and at December 31, 1998 and March 31, 1999, with respect to the balance
sheet data. Each period presented should be treated as a stand-alone period. The
Summary Unaudited Pro Forma Consolidated Financial Information should be read in
conjunction with the Summary Historical Consolidated Financial Information and
does not purport to be indicative of the results that would have been obtained
had the above described transactions been completed at the dates indicated or
the results that may be obtained in the future.
20
<PAGE> 27
DATATRAK INTERNATIONAL, INC.
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31, 1998 Three Months Ended March 31, 1999
----------------------------------- ----------------------------------
Pro Forma Pro Forma
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
---------- ----------- --------- ---------- ----------- ---------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue $ 13,226 $ 13,094 $ 132 $ 4,180 $ 4,146 $ 34
Direct costs 10,511 10,047 464 2,649 2,497 152
-------- -------- ------- ------- ------- -------
Gross profit (loss) 2,715 3,047 (332) 1,531 1,649 (118)
Selling, general and
administrative expenses 8,969 4,899 4,070 2,518 1,234 1,284
Impairment charge 6,056 6,056 -- -- -- --
Special items 1,998 1,245 753 -- -- --
Depreciation and
amortization 1,155 685 470 249 110 139
-------- -------- ------- ------- ------- -------
Income (loss) from
operations (15,463) (9,838) (5,625) (1,236) 305 (1,541)
Other income (expense) 1,467 (212) 1,679 167 (105) 272
-------- -------- ------- ------- ------- -------
Income (loss) before
income taxes (13,996) (10,050) (3,946) (1,069) 200 (1,269)
Income tax expense 80 80 -- 40 40 --
-------- -------- ------- ------- ------- -------
Net income (loss) $(14,076) $(10,130) $(3,946) $(1,109) $ 160 $(1,269)
======== ======== ======= ======= ======= =======
Net loss per share: basic $ (2.19) $ (1.14) $ (0.17) $ (0.37)
======= ======= ======= =======
Shares used in the
computation of basic net
loss per share 6,422 (2,972) 3,450 6,428 (2,972) 3,456
======== ======== ======= ======= ======= =======
Net loss per share: diluted $ (2.19) $ (1.14) $ (0.17) $ (0.37)
======== ======= ======= =======
Shares used in the
computation of diluted
net loss per share 6,422 (2,972) 3,450 6,428 (2,972) 3,456
======== ======== ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998 March 31, 1999
---------------------------------- ------------------------------------
Pro Forma Pro Forma
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
---------- ----------- --------- ---------- ----------- ---------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and
short-term investments $ 26,693 $ (5,301) $ 21,392 $ 23,785 $ (3,721) $ 20,064
Working capital 24,489 (5,314) 19,175 23,570 (5,503) 18,067
Total assets 33,540 (10,476) 23,064 31,814 (10,193) 21,621
Long-term liabilities -- -- -- -- -- --
Accumulated deficit (21,423) 11,473 (9,950) (22,532) 11,427 (11,105)
Total shareholders' equity 28,238 (7,686) 20,552 27,155 (7,736) 19,419
Book value per common share $ 4.40 $ 5.96 $ 4.22 $ 5.61
</TABLE>
21
<PAGE> 28
NOTES TO SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(a) The following assumptions were made in preparing the Summary Pro Forma
Unaudited Consolidated Financial Information:
(1) Pro forma adjustments include those relating to the sale of the
Company's Clinical Business, the exercise of 327,616 Common Share
options at exercise prices ranging from $0.15 to $5.88, and the
effect of purchasing 3,300,000 Shares to be put in treasury at
$6.00 per Share (the price to be paid per Share under the terms
of the Offer). There can be no assurance that 327,616 Common
Share options will be exercised or that the Company will purchase
3,300,000 Shares.
(2) Expenses directly related to the Offer are assumed to be $350,000
and have been added to the cost of the Shares purchased.
(b) Pro forma adjustments to the statement of operations data for the year
ended December 31, 1998 and the three months ended March 31, 1999 include:
(1) The actual results of the Clinical Business for the applicable
reporting period.
(2) The gain resulting from the sale of the Clinical Business has
been excluded from the unaudited pro forma consolidated statement
of operations data.
(c) Pro forma adjustments to the balance sheet data at December 31, 1998 and
March 31, 1999 include:
(1) The net proceeds received from the sale of the Clinical Business
per the terms of the Asset Purchase Agreement which would have
been $13,863,000 at December 31, 1998 and $15,442,000 at March
31, 1999.
(2) The elimination of assets sold and liabilities assumed by West
under the terms of the Asset Purchase Agreement for the sale of
the Clinical Business.
(3) The exercise of 327,616 Common Share options at exercise prices
ranging from $0.15 to $5.88, and the purchase of 3,300,000 Shares
at $6.00 per Share (the price to be paid per Share under the
terms of the Offer) with available cash, cash equivalents and
short-term investments and $350,000 for costs directly related to
the Offer.
(d) Net loss per share is computed by dividing net loss by the weighted average
common shares (basic earnings per share) and common share equivalents
(diluted earnings per share), giving effect in the case of the pro forma
amounts to the Common Share options exercised and Shares repurchased as
contemplated herein.
(e) Book value per share is calculated as total shareholders' equity divided by
the number of shares outstanding at the end of the period, giving effect in
the case of the pro forma amounts to the Common Share options exercised and
Shares repurchased as contemplated herein.
22
<PAGE> 29
10. INTEREST OF DIRECTORS AND OFFICERS AND PRINCIPAL SHAREHOLDERS; TRANSACTIONS
AND ARRANGEMENTS CONCERNING SHARES.
As of the close of business on July 9, 1999, the Company had 6,465,872
Shares issued and outstanding. The following table sets forth for each of the
Company's stock option plans the Shares reserved for issuance, the Shares
issuable pursuant to exercisable options and the options which have an exercise
price below the Purchase Price:
<TABLE>
<CAPTION>
EXERCISABLE OPTIONS
WITH EXERCISE
SHARES RESERVED EXERCISABLE PRICE BELOW
PLAN NAME FOR ISSUANCE OPTIONS PURCHASE PRICE
--------- --------------- ----------- -------------------
<S> <C> <C> <C>
1992 Share Incentive Plan 337,708 157,117 157,117
1994 Directors' Share Option Plan 6,833 6,833 4,999
1996 Key Employees and
Consultants Stock Option Plan 557,667 210,600 85,000
1996 Outside Directors Stock Option Plan 175,000 92,500 80,500
--------- ------- -------
TOTALS 1,077,208 467,050 327,616
========= ======= =======
</TABLE>
Each outstanding Share is entitled to one vote. The 3,300,000 Shares that
the Company is offering to purchase pursuant to the Offer represent
approximately 51.0% of the Shares outstanding on July 9, 1999 (approximately
47.6% assuming exercise of outstanding exercisable Options).
As of July 9, 1999, the Company's directors and executive officers as a
group (9 persons) beneficially owned an aggregate of 1,419,941 Shares
representing approximately 21.0% of the outstanding Shares, assuming the
exercise by such persons of options that are currently exercisable or that are
exercisable within 60 days.
Neither the Company nor, to the best of the Company's knowledge, any of the
Company's directors or executive officers, nor any affiliates of any of the
foregoing, had any transactions involving the Shares during the 40 business days
prior to the date hereof.
Executive officers and directors of the Company may participate in the
Offer on the same basis as the Company's other shareholders. The Company has
been advised that certain of its directors and executive officers intend to
tender up to an aggregate of 1,025,752 Shares pursuant to the Offer.
The following table sets forth, as of July 9, 1999, the beneficial
ownership of the Shares of each of the directors and executive officers of the
Company and all directors and executive officers as a group, the number of
Shares for which the director or executive officer has indicated an intention to
tender, and the percent of Shares currently beneficially owned to the total
number of shares outstanding after the Offer, assuming 3,300,000 shares have
been purchased pursuant to the Offer.
23
<PAGE> 30
Unless otherwise indicated, all information with respect to beneficial ownership
has been furnished by the respective director or executive officer, as the case
may be.
The number of Shares for which the director or executive officer has
indicated an intention to tender is based on the present intention of the named
individual, and each such individual reserves the right to tender all or a
portion of the Shares beneficially owned by him.
<TABLE>
<CAPTION>
COMMON SHARES SHARES TO BE
NAME BENEFICIALLY OWNED(1) PERCENT* TENDERED
---- --------------------- ------- ------------
<S> <C> <C> <C>
Dr. Jeffrey A. Green (2) 449,981 14.0 250,000
Timothy G. Biro (3) 13,200 ** 0
Seth B. Harris (4) 92,534 2.9 0
Terry C. Black 45,000 1.4 10,000
Herbert L. Hugill (5) 100,000 3.1 100,000
Dr. Robert M. Stote 43,974 1.4 32,000
Dr. Alan G. Walton (6) 622,252 19.5 622,252
Dr. Mark J. Ratain 41,500 1.3 0
Robert E. Flaherty 11,500 ** 11,500
--------- --------- ---------
All directors and executive officers as
a group (9 persons) 1,419,941 40.9 1,025,752
</TABLE>
- ----------
* Assumes that 3,300,000 Shares are purchased pursuant to the Offer.
** Less than 1 percent.
(1) The number of Shares deemed outstanding includes (i) 6,465,872 Shares
outstanding as of the date of this Offer to Purchase and (ii) with respect
to each of the following individuals and group the following number of
Shares, which may be purchased pursuant to option exercises within 60 days
after the date of this Offer to Purchase: Dr. Green (50,000 Shares); Mr.
Biro (13,000 Shares); Mr. Harris (39,500 Shares); Dr. Stote (39,500
Shares); Mr. Hugill (50,000 Shares); Dr. Walton (14,500 Shares); Dr. Ratain
(41,500 Shares); Mr. Flaherty (11,500 Shares); Mr. Black (40,000 Shares);
Oxford BioScience Management Partners ("OBM") (3,167 Shares); all directors
and executive officers as a group (302,667 Shares).
(2) Includes 150,000 Shares held by Dr. Green's wife, as to which he disclaims
beneficial ownership.
(3) Includes 200 Shares held by Mr. Biro's wife.
(4) Includes 400 Shares held by Mr. Harris' wife and 44,634 shares held in
trust for Mr. Harris.
(5) Includes 50,000 Shares held in trust for Mr. Hugill.
24
<PAGE> 31
(6) Includes 408,690 and 82,517 Shares owned by Oxford BioScience Partners,
L.P. ("Oxford") and Oxford BioScience Partners (Adjunct), L.P. ("Oxford
Adjunct"), respectively, of which OBP Management, L.P. ("OBP") is the
general partner, and 113,378 Shares owned by Oxford BioScience Partners
(Bermuda) Limited Partnership ("Oxford Bermuda"), of which OBP Management
(Bermuda) Limited Partnership ("OBP Bermuda") is the general partner. OBP
may be deemed to be the beneficial owner of Shares owned by Oxford Bermuda.
Also includes 3,167 and 14,500 Shares issuable upon exercise of options
owned by OBM and Dr. Walton, respectively, that are currently exercisable.
Dr. Walton, a director of the Company, is a general partner of OBP, OBP
Bermuda and OBM and may be deemed to be a beneficial owner of the Shares
held by such entities. The information provided herein with respect to the
beneficial ownership of the Shares by Oxford, Oxford Adjunct and Oxford
Bermuda was obtained solely from a Schedule 13G filed with the Commission
on February 12, 1999 by the Oxford BioScience Funds.
Except for outstanding options to purchase shares granted to directors and
executive officers and as otherwise described herein, neither the Company nor,
to the best of the Company's knowledge, any of its affiliates, directors or
executive officers, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer with respect to any securities of the Company, including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or the
giving or withholding of proxies, consents or authorizations.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of shareholders. Nonetheless, the Company anticipates there will be a
sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of Nasdaq, the Company does not believe its
purchase of Shares pursuant to the Offer will cause the Company's remaining
Shares to be delisted from Nasdaq. However, depending on the number of Shares
purchased in the Offer and the trading price of the Shares after the Expiration
Date, the Company may not satisfy one of the continued listing standards of
Nasdaq, which would require the Company to prepare a reasonable plan to meet
then-existing listing standards within 90 days in order to maintain its listing
on Nasdaq. Such a delisting of the Shares, together with the substantial
decrease in the percentage of Shares held by shareholders, could result in a
substantial decrease in the liquidity of the Shares, even if the Company
continues to be a reporting company under the Exchange Act and continues to file
the periodic reports (including annual and quarterly reports) required to be
filed thereunder. If the Shares are delisted from Nasdaq, the Shares may only be
able to trade in the over-the-counter market. Although prices in respect of
trades may be published by the National Association of Securities Dealers, Inc.
on its electronic bulletin board and "pink sheets," quotes for such shares would
not be as readily available; accordingly, the Shares could trade much less
frequently than the Shares traded prior to any such delisting, which could have
a material adverse effect on the market value of the Shares.
25
<PAGE> 32
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. The Company believes its purchase
of Shares pursuant to the Offer will not result in the Shares becoming eligible
for deregistration under the Exchange Act.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit material to
the Company's business that might be adversely affected by the Company's
acquisition of Shares as contemplated herein or of any approval or other action
by any government or governmental, administrative or regulatory authority or
agency, domestic or foreign, that would be required for the acquisition or
ownership of Shares by the Company as contemplated herein. Should any such
approval or other action be required, the Company presently contemplates that
such approval or other action will be sought. The Company is unable to predict
whether it will be required to delay the acceptance for payment of or payment
for Shares tendered pursuant to the Offer pending the outcome of any such
matter. There can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial conditions or
that the failure to obtain any such approval or other action might not result in
adverse consequences to the Company's business. The Company's obligations under
the Offer to accept for payment and pay for Shares is subject to certain
conditions. See Section 6.
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes the principal United States federal income
tax consequences to United States Holders (as defined below) of a sale of
Shares pursuant to the Offer. Those shareholders who do not participate in the
Offer should not incur any United States federal income tax liability from the
Offer. This summary is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), existing United States Treasury Regulations promulgated
thereunder, published rulings, administrative pronouncements and judicial
decisions, changes to which could affect the tax consequences described herein
(possibly on a retroactive basis).
This summary addresses only Shares held as capital assets. It does not
address all of the United States federal tax consequences that may be relevant
to particular shareholders in light of their personal circumstances, or to
certain types of shareholders (such as certain financial institutions, dealers
or traders in securities or commodities, insurance companies, tax-exempt
organizations or persons who hold Shares as a position in a "straddle" or as
part of a "hedging" or "conversion" transaction or that have a functional
currency other than the United States dollar). This summary may not be
applicable with respect to Shares acquired as compensation (including Shares
acquired upon the exercise of options or which were or are subject to forfeiture
restrictions). This summary does not address the state, local or foreign tax
consequences of participating in the Offer. EACH HOLDER OF SHARES SHOULD CONSULT
SUCH HOLDER'S TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES TO SUCH HOLDER OF
PARTICIPATION IN THE OFFER.
A "United States Holder" is a holder of Shares that for United States
federal income tax purposes is (i) a citizen or resident of the United States,
(ii) a corporation or partnership created or
26
<PAGE> 33
organized in or under the laws of the United States or any State or division
thereof (including the District of Columbia), (iii) an estate the income of
which is subject to United States federal income taxation regardless of its
source, or (iv) a trust (a) the administration over which a United States court
can exercise primary supervision and (b) all of the substantial decisions of
which one or more United States persons have the authority to control, and
certain other trusts considered United States Holders for federal income tax
purposes. A "Non-United States Holder" is a holder of Shares other than a United
States Holder.
A United States Holder participating in the Offer will be treated either
as having sold Shares or as having received a dividend distribution from the
Company. In that regard, under Section 302 of the Code, a United States Holder
whose Shares are sold pursuant to the Offer will be treated as having sold
Shares if the sale (i) results in a "complete termination" of all of such
holder's equity interest in the Company, (ii) is a "substantially
disproportionate" redemption with respect to such holder or (iii) is "not
essentially equivalent to a dividend" with respect to such holder. In applying
each of the Section 302 tests, a United States Holder will be treated as owning
Shares actually or constructively owned by certain related individuals and
entities.
The receipt of cash by a shareholder will result in a "complete
termination" of the shareholder's interest if either (i) all of the Shares that
are actually and constructively owned by the shareholder are transferred
pursuant to the Offer or (ii) all of the Shares actually owned by the
shareholder are sold pursuant to the Offer and the shareholder is eligible to
waive, and effectively waives, the attribution of the Shares constructively
owned by the shareholder in accordance with the procedures described in the
Code. A sale of Shares will be "substantially disproportionate" with respect to
a United States Holder if the percentage of the then outstanding Shares
actually and constructively owned by such holder immediately after the sale of
Shares pursuant to the Offer is less than 80% of the percentage of the Shares
actually and constructively owned by such holder immediately before the sale
(treating Shares sold pursuant to the Offer as outstanding). A United States
Holder will satisfy the "not essentially equivalent to a dividend" test if the
reduction in such holder's proportionate interest in the Company constitutes a
"meaningful reduction" given such holder's particular facts and circumstances.
The IRS has concluded in a published ruling that even a minor reduction in the
percentage interest of a shareholder whose relative stock interest in a
publicly held corporation is minimal and who exercises no control over
corporate affairs constitutes such a "meaningful reduction."
If a United States Holder is treated as having sold Shares, such holder
will recognize capital gain or loss equal to the difference between the amount
of cash received and such holder's adjusted tax basis in the Shares sold to the
Company. In the case of an individual United States Holder whose holding period
for such Shares exceeds one year, the maximum marginal United States federal
income tax rate of 20% applicable to such gain will be lower than the maximum
marginal United States federal income tax rate applicable to ordinary income of
39.6%.
If a United States Holder who participates in the Offer is not treated as
having sold Shares, such holder will be treated as receiving a dividend to the
extent of such holder's ratable share of the Company's earnings and profits.
Such a dividend will be includible in the United States Holder's gross income as
ordinary income without reduction for the adjusted tax basis of the Shares
27
<PAGE> 34
sold. In such event, the United States Holder's adjusted tax basis in its
Shares sold in the Offer generally will be added to such holder's adjusted tax
basis in the remaining Shares. A dividend received by a corporate United States
Holder may be (i) eligible for a dividends-received deduction (subject to
applicable limitations) and (ii) subject to the "extraordinary dividend"
provisions of the Code. To the extent, if any, that the cash received by a
United States Holder exceeds the Company's earnings and profits, it will be
treated first as a tax-free return of such United States Holder's tax basis in
the Shares and thereafter as capital gain. See Section 3 with respect to the
application of United States federal income tax withholding to payments made to
Non-United States Holders and the backup withholding tax requirements.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH SHAREHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE OFFER, INCLUDING
THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS, AND OF
CERTAIN FEDERAL TAX LAWS.
14. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. During any such extension, all Shares previously tendered
and not properly withdrawn will remain subject to the Offer and to the rights of
a tendering shareholder to withdraw such shareholder's Shares. The Company also
expressly reserves the right, in its reasonable discretion, to terminate the
Offer and not accept for payment or pay for any Shares not theretofore accepted
for payment or paid for or, subject to applicable law, to postpone payment for
Shares upon the occurrence of any of the conditions specified in Section 6
hereof by giving oral or written notice of such termination or postponement to
the Depositary and making a public announcement thereof. The Company's
reservation of the right to delay payment for Shares which it has accepted for
payment is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which
requires that the Company must pay the consideration offered or return the
Shares tendered promptly after termination or withdrawal of a tender offer.
Subject to compliance with applicable law, the Company further reserves the
right, in its reasonable discretion, and regardless of whether any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to amend the Offer in any respect (including, without limitation,
by decreasing or increasing the consideration offered in the Offer to holders of
Shares or by decreasing or increasing the number of Shares being sought in the
Offer). Amendments to the Offer may be made at any time and from time to time
effected by public announcement thereof, such announcement, in the case of an
extension, to be issued no later than 9:00 a.m., Eastern Daylight Savings Time,
on the next business day after the last previously scheduled or announced
Expiration Date. Any public announcement made pursuant to the Offer will be
disseminated promptly to shareholders in a manner reasonably designed to inform
shareholders of such change. Without limiting the manner in which the Company
may choose to make a public announcement, except as required by applicable law,
the Company shall have no obligation to
28
<PAGE> 35
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules provide that the
minimum period during which an offer must remain open following material changes
in the terms of the Offer or information concerning the Offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information. If (i)(a) the Company increases or decreases the price to be paid
for Shares, (b) materially increases the Dealer Manager fee, (c) increases the
number of Shares being sought in the Offer and, in the event of an increase in
the number of Shares being sought, such increase exceeds 2% of the outstanding
Shares, or (d) decreases the number of Shares being sought, and (ii) the Offer
is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from, and including, the date that such notice
of an increase or decrease is first published, sent or given in the manner
specified in this Section 14, the Offer will be extended until the expiration of
such period of ten business days. For the purposes of the Offer, a "business
day" means any day other than a Saturday, Sunday or Federal holiday and consists
of the time period from 12:01 a.m. through 12:00 Midnight, Eastern Daylight
Savings Time.
15. FEES AND EXPENSES.
The Company has retained McDonald Investments Inc. ("McDonald") to act as
its financial advisor, as well as the Dealer Manager, in connection with the
Offer. McDonald will receive a fee for its services of the greater of (i)
$150,000 or (ii) $0.06 per Share tendered to a maximum of $275,000. The Company
also has agreed to reimburse McDonald for certain reasonable out-of-pocket
expenses incurred in connection with the Offer, including reasonable fees and
expenses of counsel, and to indemnify McDonald against certain liabilities in
connection with the Offer, including liabilities under the federal securities
laws.
The Company has retained MacKenzie Partners, Inc. as Information Agent in
connection with the Offer. The Information Agent may contact shareholders by
mail, telephone, telex, telegraph and personal interview, and may request
brokers, dealers and other nominee shareholders to forward materials relating to
the Offer to beneficial owners. The Information Agent will receive reasonable
and customary compensation for their services. The Company will also reimburse
the Information Agent for out-of-pocket expenses, including reasonable
attorneys' fees, and has agreed to indemnify the Information Agent against
certain liabilities in connection with the Offer, including certain liabilities
under the federal securities laws.
The Company has retained National City Bank to act as Depositary in
connection with the Offer. The Depositary will receive reasonable and customary
compensation for its services, will be reimbursed by the Company for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities in connection with the Offer, including certain liabilities under
the federal securities laws.
29
<PAGE> 36
NEITHER THE INFORMATION AGENT, THE DEALER MANAGER NOR THE DEPOSITARY HAS
BEEN RETAINED TO MAKE SOLICITATIONS OR RECOMMENDATIONS IN CONNECTION WITH THE
OFFER.
No fees or commissions will be payable by the Company to brokers, dealers
or other persons (other than fees to the Dealer Manager as described above) for
soliciting tenders of Shares pursuant to the Offer. Shareholders holding Shares
through brokers or banks are urged to consult the brokers or banks to determine
whether transaction costs are applicable if shareholders tender Shares through
such brokers or banks and not directly to the Depositary. The Company, however,
upon request through the Dealer Manager or the Information Agent, will reimburse
brokers, dealers and commercial banks for customary mailing and handling
expenses incurred by them in forwarding the Offer and related materials to the
beneficial owners of Shares held by them as a nominee or in a fiduciary
capacity. No broker, dealer, commercial bank or trust company has been
authorized to act as the agent of the Company, the Dealer Manager or the
Depositary for purposes of the Offer. The Company will pay or cause to be paid
all stock transfer taxes, if any, on its purchase of Shares except as otherwise
provided in Instruction 6 in the Letter of Transmittal.
16. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer or the acceptance of Shares pursuant
thereto is not in compliance with any valid applicable law, the Company will
make a good faith effort to comply with the applicable law. If, after such good
faith effort, the Company cannot comply with the applicable law, the Offer will
not be made to (nor will tenders be accepted from or on behalf of) the holders
of Shares in such jurisdiction. In any jurisdiction the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on the Company's behalf by the Dealer Manager
or one or more registered brokers or dealers licensed under the laws of the
jurisdiction.
30
<PAGE> 37
FURTHER INFORMATION
The Company files reports, proxy statements and other information with
the Commission under the Exchange Act. These reports and statements are
available upon request from the Secretary of the Company at the Company's
principle executive office. This information may be read and copied at the
following Commission locations:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
Copies of this information are also available by mail from the
Commission's Public Reference Section, 450 Fifth Street, N.W., Room 1024,
Washington D.C., 20549, at prescribed rates. Further information on the
operation of the Commission's Public Reference Room in Washington, D.C. may be
obtained by calling the Commission at 1-800-SEC-0330.
The Commission also maintains a world wide web site that contains
reports, proxy statements and other information about registrants, such as the
Company, that file electronically with the Commission. The address of that web
site is http://www.sec.gov.
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH
THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY.
Pursuant to Rule 13e-4 of the General Rules and Regulations of the
Commission under the Exchange Act, the Company has filed with the Commission a
Schedule 13E-4 that contains additional information with respect to the Offer.
Such Schedule 13E-4, including the exhibits and any amendments thereto, may be
examined, and copies may be obtained, at the same places and in the same manner
as is set forth in Section 9 with respect to information concerning the Company.
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<PAGE> 38
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGER IN CONNECTION WITH
THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE DEALER
MANAGER.
DATATRAK INTERNATIONAL, INC.
July 12, 1999
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<PAGE> 39
Facsimile copies of the Letter of Transmittal will be accepted, The Letter
of Transmittal and certificates for the Shares and any other required documents
should be sent or delivered by each shareholder or his broker, dealer,
commercial bank, trust company or other nominee to the Depositary at one of its
address set forth below:
THE DEPOSITARY:
NATIONAL CITY BANK
<TABLE>
<S> <C>
BY FIRST CLASS OR EXPRESS MAIL: BY HAND AND OVERNIGHT DELIVERY:
NATIONAL CITY BANK NATIONAL CITY BANK
CORPORATE TRUST OPERATIONS CORPORATE TRUST OPERATIONS
POST OFFICE BOX 94720 3RD FLOOR, NORTH ANNEX
CLEVELAND, OHIO 44101-4720 4100 WEST 150TH STREET
CLEVELAND, OHIO 44135-1385
TOLL-FREE TELEPHONE: (800) 622-6757
BY FACSIMILE: (216) 252-9163
</TABLE>
THE INFORMATION AGENT:
MACKENZIE PARTNERS, INC.
156 FIFTH STREET
NEW YORK, NEW YORK 10010
(212) 929-5500 (COLLECT)
(800) 322-2885 (TOLL FREE)
THE DEALER MANAGER:
MCDONALD INVESTMENTS INC.
MCDONALD INVESTMENT CENTER
800 SUPERIOR AVENUE
CLEVELAND, OHIO 44114
<PAGE> 1
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER COMMON SHARES
OF
DATATRAK INTERNATIONAL, INC.
(FORMERLY KNOWN AS COLLABORATIVE CLINICAL RESEARCH, INC.)
PURSUANT TO THE OFFER TO PURCHASE DATED JULY 12, 1999
OF
DATATRAK INTERNATIONAL, INC.
THE EXPIRATION DATE, WITHDRAWAL DEADLINE AND PRORATION DEADLINE IS MONDAY,
AUGUST 9, 1999, AT 5:00 P.M. EASTERN DAYLIGHT SAVINGS TIME, UNLESS EXTENDED.
The Depositary for the Offer is:
NATIONAL CITY BANK
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Mail/Express:
NATIONAL CITY BANK NATIONAL CITY BANK
Corporate Trust Operations Corporate Trust Operations
Post Office Box 94720 3rd Floor North Annex
Cleveland, Ohio 44101-4720 4100 West 150th Street
Cleveland, Ohio 44135-1385
</TABLE>
For Eligible Institutions Only:
<TABLE>
<S> <C>
By Facsimile: For Information:
(216) 252-9163 (800) 622-6757
</TABLE>
THIS LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS, SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR VIA A FACSIMILE
TRANSMISSION OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
DELIVERY TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
PRINT NAME AND ADDRESS OF REGISTERED HOLDER(S) CERTIFICATE(S) ENCLOSED
(PLEASE FILL IN EXACTLY AS NAME APPEARS ON CERTIFICATE) (ATTACH SIGNED LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES NUMBER
SHARE CERTIFICATE EVIDENCED BY OF SHARES
NUMBER(S) CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL:
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by shareholders that tender Shares by book-entry
transfer.
** Unless otherwise instructed, it will be assumed that all Shares described
above are being tendered. See Instruction 4.
- --------------------------------------------------------------------------------
<PAGE> 2
This Letter of Transmittal is to be completed only (a) if certificates
representing Shares (as defined below) are to be forwarded herewith or (b) if
tenders of Shares are to be made concurrently by book-entry transfer to the
account maintained by the Depositary at The Depository Trust (the "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 3 of the
DataTRAK International, Inc. Offer to Purchase, dated July 12, 1999 (the "Offer
to Purchase"). Delivery of documents to one of the Book-Entry Transfer Facility
does not constitute delivery to the Depositary.
Shareholders whose Share certificates are not immediately available or who
cannot deliver such certificates and all other documents required by this Letter
of Transmittal to the Depositary on or prior to the Expiration Date (as defined
in the Offer to Purchase), or who cannot comply with the procedure for
book-entry transfer on a timely basis, may nevertheless tender their Shares
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Account Number: Transaction Code Number:
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name of Registered Holders(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution with Guaranteed Delivery:
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
2
<PAGE> 3
To National City Bank:
The undersigned hereby tenders to DataTRAK International, Inc., an Ohio
corporation (formerly known as Collaborative Clinical Research, Inc.) (the
"Company"), the above-described common shares, without par value, of the Company
(the "Shares"), at a price of $6.00 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Company's Offer to Purchase dated July 12, 1999 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer").
Subject to, and effective upon, acceptance for payment of the Shares
tendered hereby in accordance with the terms and subject to the conditions of
the Offer (including, if the Offer is extended or amended, the terms and
conditions of such extension or amendment), the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Company all right, title and
interest in and to all Shares tendered hereby and orders the registration of all
such Shares if tendered by book-entry transfer and hereby irrevocably
constitutes and appoints the Depositary as the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (with full
knowledge that the Depositary also acts as the agent of the Company) with
respect to such Shares, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to: (a)
deliver certificate(s) representing such Shares or transfer ownership of such
Shares on the account books maintained by the Book-Entry Transfer Facility,
together, in either such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Company upon receipt by the
Depositary, as the undersigned's agent, of the Purchase Price (as defined below)
with respect to such Shares; (b) present certificates for such Shares for
cancellation and transfer on the Company's books; and (c) receive all benefits
and otherwise exercise all rights of beneficial ownership of such Shares,
subject to the next paragraph, all in accordance with the terms and subject to
the conditions of the Offer.
The undersigned hereby covenants, represents and warrants to the Company
that:
- the undersigned has full power and authority to tender, sell, assign and
transfer the Shares tendered hereby and that when and to the extent the
same are accepted for payment by the Company, the Company will acquire
good, marketable and unencumbered title thereto, free and clear of all
security interests, liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer of such Shares, and not subject to any adverse claims;
- the undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the
terms and conditions of the Offer, including the undersigned's
representation and warranty that (a) the undersigned has a net long
position in the Shares or equivalent securities at least equal to the
Shares tendered within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, as amended ("Rule 14e-4"), and (b) such tender of
Shares complies with Rule 14e-4;
- the undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares
tendered hereby; and
- the undersigned has read, understands and agrees to all of the terms and
conditions of the Offer.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company, upon the terms and subject to the conditions of the Offer. The
undersigned acknowledges that no interest will be paid on the Purchase Price for
tendered Shares regardless of any extension of the Offer or any delay in making
such payment.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and legal
representatives of the undersigned. Except as stated in the Offer to Purchase,
this tender is irrevocable.
The name(s) and address(es) of the registered holder(s) should be printed,
if they are not already printed above, exactly as they appear on the
certificates representing Shares tendered hereby. The certificate numbers, the
number of
3
<PAGE> 4
Shares represented by such certificates and the number of Shares that the
undersigned wishes to tender should be set forth in the appropriate boxes above.
The undersigned understands that:
- the Company has, upon the terms and subject to the conditions of the
Offer, determined a single per Share price of $6.00 per Share, net to the
seller in cash, without interest thereon (the "Purchase Price");
- the Company will pay for Shares validly tendered and not withdrawn prior
to the Expiration Date pursuant to the Offer, taking into account the
number of Shares so tendered by tendering shareholders;
- all Shares validly tendered prior to the Expiration Date and not
withdrawn will be purchased at the Purchase Price, upon the terms and
subject to the conditions of the Offer, including its proration
provisions;
- the Company will return all other Shares not purchased pursuant to the
Offer, including Shares not purchased because of proration; and
- the Company has reserved the right, in its sole discretion, to purchase
more than 3,300,000 Shares pursuant to the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may accept for payment fewer than all of the Shares tendered hereby. In any such
event, the undersigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the undersigned at the address
indicated above, unless otherwise indicated under the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" below.
The check for the aggregate net Purchase Price for such of the tendered
Shares as are purchased will be issued to the order of the undersigned and
mailed to the address indicated above, unless otherwise indicated under the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" below.
In the event that both the "Special Payment Instructions" and the "Special
Delivery Instructions" are completed, please issue the check for the Purchase
Price and/or return any Shares not so tendered or accepted for payment in the
name of and deliver said check and/or return such Shares to the person or
persons so indicated. Shareholders tendering Shares by book-entry transfer may
request that any Shares not accepted for payment be returned by crediting such
account maintained at the Book-Entry Transfer Facility by making an appropriate
entry under "Special Payment Instructions."
The undersigned acknowledges that the Company has no obligation, pursuant
to the "Special Payment Instructions," to transfer any Shares from the name of
its registered holder(s) thereof, or to order the registration or transfer of
any Shares tendered by book-entry transfer, if the Company does not purchase any
of such Shares.
4
<PAGE> 5
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5 AND 8)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares is to be
issued in the name of someone other than the undersigned or if Shares
tendered by book-entry transfer which are not purchased are to be returned
by credit to an account maintained by the Book-Entry Transfer Facility.
Issue: [ ] Check [ ] Certificates to:
Name:
-----------------------------------------------
(PLEASE PRINT)
Address:
------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
Credit unpurchased Shares tendered by Book-Entry Transfer to the
account set forth below:
[ ] NCB [ ]
---
(check one)
------------------------------------------------------------
ACCOUNT NUMBER
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5 AND 8)
To be completed ONLY if certificate(s) for Shares not tendered or not
purchased and any check for the Purchase Price are to be mailed or sent to
someone other than the undersigned, or to the undersigned at an address
other than that designated above.
Mail: [ ] Check [ ] Certificate(s)
Name:
-----------------------------------------------
(PLEASE PRINT)
Address:
------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
------------------------------------------------------------
5
<PAGE> 6
IMPORTANT:
SHAREHOLDERS SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
------------------------------------------------------------
SIGNATURE OF HOLDER
Dated , 1999
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
share certificate(s) or on a security listing or by person(s) authorized to
become registered holder(s) by certificate(s) and documents transmitted
herewith. If signature is by trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of corporation or any other person acting in a
fiduciary or representative capacity, please provide the following information.
See Instruction 5.)
Name(s):
(PLEASE PRINT)
Capacity (full title):
Address:
(INCLUDE ZIP CODE)
Telephone Number:
TAX IDENTIFICATION OR SOCIAL SECURITY NO.
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
Name:
Title:
Address:
(INCLUDE ZIP CODE)
Telephone Number:
TAX IDENTIFICATION OR SOCIAL SECURITY NO.
Dated:
6
<PAGE> 7
ODD LOTS
(SEE INSTRUCTION 7)
To be completed ONLY if Shares are being tendered by or on behalf of a
person owning, beneficially or of record, as of the close of business on July 9,
1999 and who continues to own, beneficially or of record, as of the Expiration
Date, an aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[ ] was the beneficial or record owner of, as of the close of business on
July 9, 1999, and continues to own beneficially or of record as of the
Expiration Date, an aggregate of fewer than 100 Shares, all of which are
being tendered; or
[ ] is a broker, dealer, commercial bank, trust company, or other nominee
that (a) is tendering, for the beneficial owner(s) thereof, Shares with
respect to which it is the record holder, and (b) believes, based upon
representations made to it by such beneficial owner(s), that each such
person was the beneficial or record owner of, as of the close of business
on July 9, 1999, and continues to own beneficially or of record as of the
Expiration Date, an aggregate of fewer than 100 Shares and is tendering
all of such Shares.
7
<PAGE> 8
PAYER'S NAME: NATIONAL CITY BANK, CLEVELAND, OHIO
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
PART 1 -- TAXPAYER IDENTIFICATION NUMBER -- FOR ALL
ACCOUNTS, ENTER TAXPAYER IDENTIFICATION NUMBER IN THE BOX Social Security
AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Number
For most individuals and sole proprietors, this is your
Social Security Number. For other entities, it is your OR ------
Employer Identification Number. If you do not have a Employer
number, see "How to Obtain a TIN" in the enclosed Identification
Guidelines. Number
Note: if the account is in more than one name, see the
chart on page 2 of the enclosed Guidelines to determine
what number to enter.
----------------------------------------------------------------------------------
PART 2 -- For payees exempt from backup withholding, see the enclosed Guidelines
and complete as instructed therein.
----------------------------------------------------------------------------------
Certification -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
SUBSTITUTE
FORM W-9 (1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me), and either: (a) that I
Department of the Treasury have mailed or delivered an application to receive a taxpayer identification
Internal Revenue Service number to the appropriate Internal Revenue Service Center or Social Security
Administration Office, or (b) I intend to mail or deliver an application in
Payer's Request for the near future. I understand that, notwithstanding the information I
Taxpayer provided in Part 3 of the Substitute Form W-9, if I do not provide a taxpayer
Identification identification number to the Depositary within sixty (60) days, the PART 3 --
Number Depositary is required to withhold 31% of all cash payments made to me
thereafter until I provide a number. Awaiting TIN [ ]
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
that I am subject to backup withholding as a result of a failure to report
all interest or dividends or (c) the Internal Revenue Service has notified me
that I am no longer subject to backup withholding.
(3) Any other information provided on this form is true, correct and complete.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the Internal Revenue Service that you are currently subject to backup
withholding because of underreporting interest or dividends on your tax return.
However, if after you have been notified by the Internal Revenue Service that you
were subject to backup withholding you received another notification from the
Internal Revenue Service that you are no longer subject to backup withholding, do
not cross out item (2).
----------------------------------------------------------------------------
Signature: ------ Date: ---
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
8
<PAGE> 9
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE
IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) that I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
that I intend to mail or deliver an application in the near future. I understand
that, notwithstanding the information I provided in Part 3 of the Substitute
Form W-9, if I do not provide a taxpayer identification number to the Depositary
within sixty (60) days, the Depositary is required to withhold 31% of all cash
payments made to me thereafter until I provide a number.
Signature: ---------- Date: ----
9
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of the Shares
(which term, for purposes hereof, shall include any participant in the
Book-Entry Transfer Facility whose name appears on a security position listing
as the owner of such Shares) tendered hereby exactly as the name of such
registered holder appears on the certificate(s) for such Shares tendered with
this Letter of Transmittal and payment and delivery are to be made directly to
such owner unless such owner has completed the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" above; or (b)
such Shares are tendered for the account of a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program or a bank, broker, dealer,
credit union, savings association or other entity which is an "eligible
guarantor institution," as such term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended (each of the foregoing constituting
an "Eligible Institution"). In all other cases, an Eligible Institution must
guarantee all signatures on this Letter of Transmittal. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be completed only if certificates
for Shares are delivered with it to the Depositary (or such certificates will be
delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or if a tender for Shares is being made concurrently pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Certificates for all physically tendered Shares or confirmation of
a book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of Shares tendered electronically, together in each case with a
properly completed and duly executed Letter of Transmittal (or facsimile
hereof), and any other documents required by this Letter of Transmittal, should
be either mailed or delivered to the Depositary at the appropriate address set
forth herein and must be delivered to the Depositary on or before the Expiration
Date.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
Shareholders whose certificates are not immediately available or who cannot
deliver certificates for their Shares and all other required documents to the
Depositary before the Expiration Date, or whose Shares cannot be delivered on a
timely basis pursuant to the procedures for book-entry transfer, must, in any
such case, tender their Shares by or through any Eligible Institution by
properly completing and duly executing and delivering a Notice of Guaranteed
Delivery (or facsimile thereof) and by otherwise complying with the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedure, certificates for all physically tendered Shares or book-entry
confirmations, as the case may be, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile hereof) and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within three business days after receipt by the Depositary of such Notice of
Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
signature guarantee by an Eligible Institution in the form set forth therein.
For Shares to be tendered validly pursuant to the guaranteed delivery procedure,
the Depositary must receive the Notice of Guaranteed Delivery on or before the
Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
The Company will not accept any alternative, conditional or contingent
tenders, nor will it purchase any fractional Shares, except as expressly
provided in the Offer to Purchase. All tendering shareholders, by execution of
this Letter of Transmittal (or a facsimile hereof), waive any right to receive
any notice of the acceptance of their tender.
3. Inadequate Space. If the space provided in the box entitled
"Description of Shares Tendered" above is inadequate, the certificate numbers
and/or the number of Shares should be listed on a separate signed schedule and
attached to this Letter of Transmittal.
10
<PAGE> 11
4. Partial Tenders and Unpurchased Shares. (Not applicable to
shareholders who tender by book-entry transfer.) If fewer than all of the Shares
evidenced by any certificate are to be tendered, fill in the number of Shares
that are to be tendered in the column entitled "Number of Shares Tendered" in
the box entitled "Description of Shares Tendered" above. In such case, if any
tendered Shares are purchased, a new certificate for the remainder of the Shares
(including any Shares not purchased) evidenced by the old certificate(s) will be
issued and sent to the registered holder(s) thereof, unless otherwise specified
in either the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" in this Letter of Transmittal, as soon as
practicable after the Expiration Date. Unless otherwise indicated, all Shares
represented by the certificate(s) set forth above and delivered to the
Depositary will be deemed to have been tendered.
5. Signatures on Letter Of Transmittal; Stock Powers and Endorsements.
(a) If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s)
without any change whatsoever.
(b) If the Shares tendered hereby are registered in the names of two
or more joint holders, each such holder must sign this Letter of
Transmittal.
(c) If any tendered Shares are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles hereof) as there are
different registrations of certificates.
(d) When this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, no endorsement(s) of
certificate(s) representing such Shares or separate stock power(s) are
required unless payment is to be made or the certificate(s) for Shares not
tendered or not purchased are to be issued to a person other than the
registered holder(s) thereof. Signature(s) on such certificate(s) must be
guaranteed by an Eligible Institution. If this Letter of Transmittal is
signed by a person other than the registered holder(s) of the
certificate(s) listed, or if payment is to be made or certificate(s) for
Shares not tendered or not purchased are to be issued to a person other
than the registered holder(s) thereof, such certificate(s) must be endorsed
or accompanied by appropriate stock power(s), in either case signed exactly
as the name(s) of the registered holder(s) appears on the certificate(s),
and the signature(s) on such certificate(s) or stock power(s) must be
guaranteed by an Eligible Institution. See Instruction 1.
(e) If this Letter of Transmittal or any certificate(s) or stock
power(s) are signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or any other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing this Letter of Transmittal and must submit proper evidence
satisfactory to the Company of their authority to so act.
6. Stock Transfer Taxes. Except as provided in this Instruction 6, no
stock transfer tax stamps or funds to cover such stamps need accompany this
Letter of Transmittal. The Company will pay any stock transfer taxes payable on
the transfer to it of Shares purchased pursuant to the Offer. If, however,
either (a) payment of the Purchase Price for Shares tendered hereby and accepted
for purchase is to be made to any person other than the registered holder(s), or
(b) Shares not tendered or not accepted for purchase are to be registered in the
name(s) of any person(s) other than the registered holder(s) or (c)
certificate(s) representing tendered Shares are registered in the name(s) of any
person(s) other than the person(s) signing this Letter of Transmittal, then the
Depositary will deduct from such Purchase Price the amount of any stock transfer
taxes (whether imposed on the registered holder(s), such other person(s) or
otherwise) payable on account of the transfer to such person, unless
satisfactory evidence of the payment of such taxes or any exemption therefrom is
submitted.
7. Odd Lots. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase fewer than all Shares validly tendered before the
Expiration Date and not withdrawn, the Shares purchased first will consist of
all Shares validly tendered by any shareholder who owned, beneficially or of
record, as of the close of business on July 9, 1999 and as of the Expiration
Date, an aggregate of fewer than 100 Shares, and who tenders all of such
holder's Shares (an "Odd Lot Holder"). This preference will not be available
unless the box captioned "Odd Lots" is completed.
11
<PAGE> 12
8. Special Payment and Delivery Instructions. If certificate(s) for
Shares not tendered or not purchased and/or check(s) are to be issued in the
name of a person other than the signer of this Letter of Transmittal or if such
certificates and/or checks are to be sent to someone other than the person
signing this Letter of Transmittal or to the signer at a different address, the
box entitled "Special Payment Instructions" and/or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal should be completed as
applicable and signatures must be guaranteed as described in Instruction 1.
9. Irregularities. All questions as to the number of Shares to be
accepted and the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be resolved by the Company
(or by its representatives, including the Depositary) in its sole discretion,
which determination shall be final and binding on all parties. The Company
reserves the absolute right to reject any or all tenders of Shares it determines
not to be in proper form or the acceptance of which or payment for which may, in
the opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in any tender with respect to any particular Shares or any
particular shareholder, and the Company's interpretation of the terms of the
Offer (including these Instructions) will be final and binding on all parties.
No tender of Shares will be deemed to be validly made until all defects and
irregularities have been cured by the tendering shareholder or waived by the
Company. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as the Company shall determine. None of the
Company, the Dealer Manager (as defined in the Offer to Purchase), the
Depositary, the Information Agent (as defined in the Offer to Purchase) or any
other person is or will be obligated to give notice of any defects or
irregularities in tenders and none of them will incur any liability for failure
to give any such notice.
10. Questions and Requests for Assistance and Additional Copies.
Questions and requests for assistance may be directed to, or additional copies
of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed
Delivery and other related materials may be obtained from, the Information Agent
or the Dealer Manager at their addresses and telephone numbers set forth on the
back cover of the Offer to Purchase or from brokers, dealers, commercial banks
or trust companies.
11. Tax Identification Number and Backup Withholding. Federal income tax
law generally requires that a shareholder whose tendered Shares are accepted for
purchase, or such shareholder's assignee (in either case, the "Payee"), provide
the Depositary with such Payee's correct Taxpayer Identification Number ("TIN"),
which, in the case of a Payee who is an individual, is such Payee's social
security number. If the Depositary is not provided with the correct TIN or an
adequate basis for an exemption, such Payee may be subject to a $50 penalty
imposed by the Internal Revenue Service and backup withholding in an amount
equal to 31% of the gross proceeds received pursuant to the Offer. If
withholding results in an overpayment of taxes, a refund may be obtained.
To prevent backup withholding, each Payee must provide such Payee's correct
TIN by completing the Substitute Form W-9 set forth herein, certifying that the
TIN provided is correct (or that such Payee is awaiting a TIN) and that (a) the
Payee is exempt from backup withholding, (b) the Payee has not been notified by
the Internal Revenue Service that such Payee is subject to backup withholding as
a result of a failure to report all interest or dividends, or (c) the Internal
Revenue Service has notified the Payee that such Payee is no longer subject to
backup withholding.
If the Payee does not have a TIN, such Payee should (a) consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for instructions on applying for a TIN, (b) write "Applied
For" in the space provided in Part 1 of the Substitute Form W-9, and (c) sign
and date the Substitute Form W-9 and the Certificate of Awaiting Taxpayer
Identification Number set forth herein. If the Payee does not provide such
Payee's TIN to the Depositary within sixty (60) days, backup withholding will
begin and continue until such Payee furnishes such Payee's TIN to the
Depositary. Note that writing "Applied For" on the Substitute Form W-9 means
that the Payee has already applied for a TIN or that such Payee intends to apply
for one in the near future.
If Shares are held in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for certification of Taxpayer
Identification Number on Substitute Form W-9 for information on which TIN to
report.
Exempt Payees (including, among others, all corporations and certain
foreign individuals) are not subject to backup withholding and reporting
requirements. To prevent possible erroneous backup withholding, an exempt Payee
should write "Exempt" in Part 2 of Substitute Form W-9. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions. In order for a nonresident alien or
foreign entity to qualify as
12
<PAGE> 13
exempt, such person must submit a completed Form W-8 Certificate of Foreign
Status, signed under penalty of perjury attesting to such exempt status. Such
form may be obtained from the Depositary.
12. Withholding On Non-United States Holders. Even if a Non-United States
Holder (as defined below) has provided the required certification to avoid
backup withholding, the Depositary will withhold United States federal income
taxes equal to 31% of the gross payments payable to a Non-United States Holder
or such holder's agent unless the Depositary determines that a reduced rate of
withholding is available pursuant to a tax treaty or that an exemption from
withholding is applicable because such gross proceeds are effectively connected
with the conduct of a trade or business within the United States. For this
purpose, a "Non-United States Holder" is any shareholder that for United States
federal income tax purposes is not (a) a citizen or resident of the United
States, (b) a corporation or partnership created or organized in or under the
laws of the United States or any State or division thereof (including the
District of Columbia), (c) an estate the income of which is subject to United
States federal income taxation regardless of the source of such income, or (d) a
trust (i) the administration over which a United States court can exercise
primary supervision and (ii) all of the substantial decisions of which one or
more United States persons have the authority to control. Notwithstanding the
foregoing, to the extent provided in United States Treasury Regulations, certain
trusts in existence on August 20, 1996, and treated as United States persons
prior to such date, that elect to continue to be treated as United States
persons also will not be Non-United States Holders. In order to obtain a reduced
rate of withholding pursuant to a tax treaty, a Non-United States Holder must
deliver to the Depositary before the payment a properly completed and executed
IRS Form 1001. In order to obtain an exemption from withholding on the grounds
that the gross proceeds paid pursuant to the Offer are effectively connected
with the conduct of a trade or business within the United States, a Non-United
States Holder must deliver to the Depositary a properly completed and executed
IRS Form 4224. The Depositary will determine a shareholder's status as a
Non-United States Holder and eligibility for a reduced rate of, or an exemption
from, withholding by reference to outstanding certificates or statements
concerning eligibility for a reduced rate of, or exemption from, withholding
(e.g., IRS Form 1001 or IRS Form 4224) unless facts and circumstances indicate
that such reliance is not warranted. A Non-United States Holder may be eligible
to obtain a refund of all or a portion of any tax withheld if such Non-United
States Holder meets those tests described in Section 13 of the Offer to Purchase
that would characterize the exchange as a sale (as opposed to a dividend) or is
otherwise able to establish that no tax or a reduced amount of tax is due.
NON-UNITED STATES HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING,
INCLUDING ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND THE
REFUND PROCEDURE.
13. Lost, Stolen, Destroyed or Mutilated Certificates. If any
certificate(s) representing Shares has been lost, stolen, destroyed or
mutilated, the shareholder should promptly notify the Depositary by calling
(800) 622-6757. Such shareholder will then be instructed by the Depositary as to
the steps that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, stolen, destroyed or mutilated certificates have been followed.
13
<PAGE> 14
THIS LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY EXECUTED (OR
FACSIMILE HEREOF), TOGETHER WITH CERTIFICATES REPRESENTING SHARES BEING TENDERED
OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS, OR A
NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED PRIOR TO 5:00 P.M. EASTERN
DAYLIGHT SAVINGS TIME, ON THE EXPIRATION DATE.
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (COLLECT) or
(800) 322-2885 (TOLL FREE)
The Dealer Manager for the Offer is:
McDonald Investments Inc.
McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
14
<PAGE> 1
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF COMMON SHARES
OF
DATATRAK INTERNATIONAL, INC.
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if certificates
evidencing common shares, without par value (the "Shares"), of DataTRAK
International, Inc., an Ohio corporation (formerly known as Collaborative
Clinical Research, Inc.) (the "Company"), are not immediately available, or if
the procedure for book-entry transfer set forth in the Offer to Purchase dated
July 12, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal
(which, as amended or supplemented from time to time, together constitute the
"Offer") cannot be completed on a timely basis or time will not permit all
required documents, including a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), to reach the Depositary prior to the
Expiration Date (as defined in the Offer to Purchase).
This Notice of Guaranteed Delivery, properly completed and duly
executed, may be delivered by hand, mail or facsimile transmission to the
Depositary. See Section 3 of the Offer to Purchase.
TO: NATIONAL CITY BANK, DEPOSITARY
By Mail: By Hand or Overnight Mail/Express:
NATIONAL CITY BANK NATIONAL CITY BANK
Attn: Corporate Trust Operations Corporate Trust Operations
Post Office Box 94720 3rd Floor, North Annex
Cleveland, Ohio 44101-4946 4100 W. 150th Street
Cleveland, Ohio 44135
For Eligible Institutions Only:
By Facsimile: For Information:
(216) 575-2649 (800) 622-6757
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE
TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY. DELIVERIES TO THE COMPANY WILL NOT BE FORWARDED TO
THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY.
DELIVERIES TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE
VALID DELIVERY TO THE DEPOSITARY.
This Notice of Guaranteed Delivery form is not to be used to guarantee
signatures. If a signature on the Letter of Transmittal is required to be
guaranteed by an Eligible Institution (as defined in the Offer to Purchase)
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and
subject to the conditions set forth in the Offer to Purchase and the related
Letter of Transmittal, receipt of which is hereby acknowledged, the number of
Shares specified below pursuant to the guaranteed delivery procedure set forth
in Section 3 of the Offer to Purchase.
ODD LOTS
To be completed ONLY if Shares are being tendered by or on behalf of a
person owning beneficially or of record as of the close of business on July 9,
1999 and who continues to own, beneficially or of record, as of the Expiration
Date, an aggregate of fewer than 100 Shares. The undersigned either (check one
box):
/ / was the beneficial or record owner of, as of the close of business on
July 9, 1999, and continues to own beneficially or of record as of the
Expiration Date, an aggregate of fewer than 100 Shares, all of which
are being tendered; or
/ / is a broker, dealer, commercial bank, trust company, or other nominee
that (a) is tendering, for the beneficial owner(s) thereof, Shares with
respect to which it is the record holder, and (b) believes, based upon
representations made to it by such beneficial owner(s), that each such
person was the beneficial or record owner of, as of the close of
business on July 9, 1999, and continues to own beneficially or of
record as of the Expiration Date, an aggregate of fewer than 100 Shares
and is tendering all of such Shares.
Signature(s):____________________________
Name(s) of
Record Holder(s):________________________
(Please type or print)
Certificates Nos.
(if available): _________________________
Address: ________________________________
________________________________
Area Code and
Telephone No.: ________________________
If Shares will be delivered by book-entry transfer, provide the following
information:
Account Number:__________________________
Date: __________________________
<PAGE> 3
DELIVERY GUARANTEE
(NOT TO BE USED FOR A SIGNATURE GUARANTEE)
THE UNDERSIGNED, A BANK, BROKER, DEALER, CREDIT UNION, SAVINGS
ASSOCIATION OR OTHER ENTITY WHICH IS A MEMBER IN GOOD STANDING OF THE SECURITIES
TRANSFER AGENTS MEDALLION PROGRAM OR A BANK, BROKER, DEALER, CREDIT UNION,
SAVINGS ASSOCIATION OR OTHER ENTITY WHICH IS AN "ELIGIBLE GUARANTOR
INSTITUTION," AS SUCH TERM IS DEFINED IN RULE 17AD-15 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (EACH OF THE FOREGOING CONSTITUTING AN
"ELIGIBLE INSTITUTION"), GUARANTEES THE DELIVERY TO THE DEPOSITARY OF THE SHARES
TENDERED HEREBY, IN PROPER FORM FOR TRANSFER, OR A CONFIRMATION THAT THE SHARES
TENDERED HEREBY HAVE BEEN DELIVERED PURSUANT TO THE PROCEDURE FOR BOOK-ENTRY
TRANSFER SET FORTH IN THE OFFER TO PURCHASE INTO THE DEPOSITARY'S ACCOUNT AT THE
BOOK-ENTRY TRANSFER FACILITY, TOGETHER WITH A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ANY OTHER REQUIRED
DOCUMENTS, ALL WITHIN THREE (3) NEW YORK STOCK EXCHANGE, INC. TRADING DAYS OF
THE DATE HEREOF.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates representing Shares to the Depositary within the time period set
forth herein. Failure to do so could result in a financial loss to such Eligible
Institution.
Name of Firm: ______________________
Address: ______________________
______________________
Area Code and
Telephone No.: ______________________
AUTHORIZED SIGNATURE
Signature: ______________________
Name: ______________________
(Please type or print)
Title: ______________________
Date: ______________________
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. CERTIFICATES FOR SHARES
SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL.
<PAGE> 1
Exhibit (a)(4)
MCDONALD INVESTMENTS INC.
McDonald Investment Center
Cleveland, Ohio 44114
DATATRAK INTERNATIONAL, INC.
OFFER TO PURCHASE FOR CASH UP TO
3,300,000 OF ITS COMMON SHARES
AT A PURCHASE PRICE OF $6.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN
DAYLIGHT SAVINGS TIME, ON MONDAY, AUGUST 9, 1999, UNLESS THE OFFER IS EXTENDED.
July 12, 1999
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
DataTRAK International, Inc., an Ohio corporation (formerly known as
Collaborative Clinical Research, Inc.) (the "Company"), has engaged us to act as
Dealer Manager in connection with its offer to purchase up to 3,300,000 shares
(or such lesser number of shares as are validly tendered) of its common shares,
without par value (the "Shares"), at $6.00 per Share, net to the seller in cash,
without interest thereon, as specified by tendering shareholders, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated July 12,
1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which,
as amended or supplemented from time to time, together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, accept for payment, and thereby purchase, up to 3,300,000 Shares validly
tendered and not withdrawn. All Shares acquired in the Offer will be acquired at
the Purchase Price. In the event more than 3,300,000 Shares are validly tendered
and not withdrawn, the Company will accept for payment, and thereby purchase,
Shares, other than Odd Lots, on a pro rata basis (adjusted downward to avoid
acceptance for payment of fractional shares) upon the terms and subject to the
conditions of the Offer. Shares not purchased because of proration, will be
returned at the Company's expense to the shareholders who tendered such Shares.
The Company reserves the right, in its sole discretion, to purchase more than
3,300,000 Shares pursuant to the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE
OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS.
Upon the terms and subject to the conditions of the Offer, if at the
Expiration Date more than 3,300,000 Shares (or such greater number of Shares as
the Company may elect to purchase) are validly tendered and not withdrawn, the
Company will buy Shares first from any person (an "Odd Lot Holder") who owned
beneficially or of record as of the close of business on July 9, 1999 and who
continues to own beneficially or of record as of the Expiration Date, an
aggregate of fewer than 100 Shares and so certified in the appropriate place in
the Letter of Transmittal (and, if applicable, on a Notice of Guaranteed
Delivery), who validly tender all their Shares, and then on a pro rata basis
from all other shareholders who validly tender Shares (and do not withdraw such
Shares prior to the Expiration Date).
<PAGE> 2
For your information and for forwarding to those of your clients for
whom you hold Shares registered in your name or in the name of your nominee, we
are enclosing the following documents:
1. The Offer to Purchase dated July 12, 1999;
2. The Letter of Transmittal for your use and for the information of your
clients (together with the accompanying Substitute Form W-9). Facsimile
copies of the Letter of Transmittal may be used to tender Shares;
3. A letter to the shareholders of the Company dated July 12, 1999 from
Dr. Jeffrey A. Green, President and Chief Executive Officer of the
Company;
4. The Notice of Guaranteed Delivery to be used to accept the Offer and
tender Shares pursuant to the Offer if none of the procedures for
tendering Shares set forth in the Offer to Purchase can be completed on
a timely basis;
5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with an instruction form provided for obtaining such clients'
instructions with regard to the Offer;
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
7. A return envelope addressed to National City Bank, as Depositary for
the Offer (the "Depositary").
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY
AS POSSIBLE. PLEASE NOTE THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 5:00 P.M., EASTERN DAYLIGHT SAVINGS TIME, ON MONDAY, AUGUST 9,
1999, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof) including any required
signature guarantees and any other required documents should be sent to the
Depositary together with either certificate(s) representing tendered Shares or
timely confirmation of their book-entry transfer, in accordance with the
instructions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Holders of Shares whose certificate(s) for such Shares are not
immediately available or who cannot deliver such certificate(s) and all other
required documents to the Depositary, or complete the procedures for book-entry
transfer, prior to the Expiration Date must tender their Shares according to the
procedure for guaranteed delivery set forth in Section 3 of the Offer to
Purchase.
No fees or commissions will be payable by the Company or any officer,
director, shareholder, agent or other representative of the Company to any
broker, dealer or other person for soliciting tenders of Shares pursuant to the
Offer (other than fees paid to McDonald Investments Inc., acting as Dealer
Manager and fees paid to MacKenzie Partners, Inc., acting as Information Agent).
The Company will, however, upon request, reimburse you for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
your clients whose Shares held by you as a nominee or in a fiduciary capacity.
The Company will pay any stock transfer taxes applicable to its purchase of
Shares, except as otherwise provided in the Letter of Transmittal.
<PAGE> 3
Any inquiries you may have with respect to the Offer should be
addressed to McDonald Investments Inc., as Dealer Manager, McDonald Investment
Center, 800 Superior Avenue, Cleveland, Ohio 44114, (216) 443-2300. Requests for
additional copies of the enclosed materials may be directed to the Dealer
Manager at the address and telephone number set forth above.
Very truly yours,
McDonald Investments Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE COMPANY, THE DEALER MANAGER, THE INFORMATION
AGENT OR THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED
HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
Exhibit (a)(5)
DATATRAK INTERNATIONAL, INC.
OFFER TO PURCHASE FOR CASH UP TO
3,300,000 OF ITS COMMON SHARES
AT A PURCHASE PRICE OF $6.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN
DAYLIGHT SAVINGS TIME, ON MONDAY, AUGUST 9, 1999, UNLESS THE OFFER IS EXTENDED.
July 12, 1999
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated July
12, 1999 (the "Offer to Purchase") and the related Letter of Transmittal (which,
as amended or supplemented from time to time, together constitute the "Offer")
in connection with the offer by DataTRAK International, Inc., an Ohio
corporation (formerly known as Collaborative Clinical Research, Inc.) (the
"Company"), to purchase up to 3,300,000 (or such lesser number of Common Shares
as are validly tendered) of its Common Shares, without par value (the "Shares"),
at $6.00 per Share, net to the seller in cash, without interest thereon, as
specified by tendering shareholders, upon the terms and subject to the
conditions of the Offer.
The Company will, upon the terms and subject to the conditions of the
Offer, accept for payment, and thereby purchase, up to 3,300,000 Shares validly
tendered and not withdrawn. All Shares acquired in the Offer will be acquired at
the Purchase Price. In the event more than 3,300,000 Shares are validly tendered
and not withdrawn, the Company will accept for payment, and thereby purchase,
Shares, other than Odd Lots, on a pro rata basis (adjusted downward to avoid
acceptance for payment of fractional shares) upon the terms and subject to the
conditions of the Offer. Shares not purchased because of proration will be
returned at the Company's expense to the shareholders who tendered such Shares.
The Company reserves the right, in its sole discretion, to purchase more than
3,300,000 Shares pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, if at the
Expiration Date more than 3,300,000 Shares (or such greater number of Shares as
the Company may elect to purchase) are validly tendered and not withdrawn, the
Company will buy Shares first from any person (an "Odd Lot Holder") who owned
beneficially or of record as of the close of business on July 9, 1999, and who
continue to own beneficially or of record as of the Expiration Date, an
aggregate of fewer than 100 Shares and so certified in the appropriate place in
the attached Instruction Form (and, if applicable, on a Notice of Guaranteed
Delivery), who validly tender all their Shares and then on a pro rata basis from
all other shareholders who validly tender Shares (and do not withdraw such
Shares prior to the Expiration Date).
A TENDER OF YOUR SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD THEREOF
AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER YOUR SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to tender
any or all of the Shares held by us for your account, upon the terms and subject
to the conditions of the Offer.
1
<PAGE> 2
Please note the following:
1. Shares will be tendered at $6.00 per Share, as indicated in the
attached Instruction Form, net to the seller in cash, without interest
thereon.
2. The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions
set forth in the Offer to Purchase.
3. The Offer, proration period and withdrawal rights will expire at 5:00
p.m., Eastern Daylight Savings Time, on Monday, August 9, 1999, unless
the Offer is extended.
4. The Offer is for 3,300,000 Shares, constituting approximately 51% of
the Shares outstanding as of July 9, 1999.
5. The Board of Directors of the Company has approved the Offer. However,
none of the Company, its Board of Directors or the Dealer Manager makes
any recommendation to shareholders as to whether to tender or refrain
from tendering their Shares. Shareholders must individually make the
decision whether to tender such shareholder's Shares and, if so, how
many Shares to tender.
6. Tendering shareholders will not be obligated to pay any brokerage fees
or commissions or solicitation fees to the Dealer Manager, Depositary
or the Company or, except as set forth in the Letter of Transmittal,
stock transfer taxes on the transfer of Shares pursuant to the Offer.
If (i) you owned beneficially or of record as of the close of business
on July 9, 1999, and continue to own beneficially or of record as of the
Expiration Date, an aggregate of fewer than 100 Shares; (ii) you instruct us to
tender on your behalf all such Shares prior to the Expiration Date; and (iii)
you complete the section entitled "Odd Lots" in the attached Instruction Form,
the Company, upon the terms and subject to the conditions of the Offer, will
accept all such Shares for purchase before proration, if any, of the purchase of
other Shares validly tendered.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is enclosed.
If you authorize us to tender your Shares, all such Shares will be tendered
unless otherwise indicated on the attached Instruction Form.
PLEASE FORWARD YOUR INSTRUCTION FORM TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE
TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
As described in the Offer to Purchase, if more than 3,300,000 Shares
(or such greater number of Shares as the Company may elect to purchase) have
been validly tendered and not withdrawn prior to the Expiration Date, the
Company will accept for payment and therefore purchase tendered Shares on the
basis set forth below:
1. first, all Shares validly tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Holder who:
(a) tenders all Shares owned beneficially or of record by such Odd
Lot Holder (tenders of less than all Shares owned by such Odd
Lot Holder will not qualify for this preference); and
2
<PAGE> 3
(b) completes the box captioned "Odd Lots" in the attached
Instruction Form and, if applicable, on the Notice of
Guaranteed Delivery; and
2. second, after purchase of all of the foregoing Shares, all other Shares
validly tendered at prices and not withdrawn prior to the Expiration
Date, on a pro rata basis (adjusted downward to avoid acceptance for
payment of fractional Shares) as described in the Offer to Purchase.
The Offer is being made solely pursuant to the Offer to Purchase and
the related Letter of Transmittal and is being made to all holders of Shares.
The Offer is not being made to, nor will tenders be accepted from or on behalf
of, holders of Shares residing in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the securities laws
of such jurisdiction.
3
<PAGE> 4
INSTRUCTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF DATATRAK INTERNATIONAL, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated July 12, 1999 (the "Offer to Purchase") and the related
Letter of Transmittal (which, as amended or supplemented from time to time,
together constitute the "Offer") in connection with the offer by DataTRAK
International, Inc., an Ohio corporation (the "Company"), to purchase up to
3,300,000 (or such lesser number of shares as are validly tendered) of its
common shares, without par value (the "Shares"), at $6.00 per Share, net to the
seller in cash, without interest thereon, as specified by tendering
shareholders, upon the terms and subject to the conditions of the Offer.
This will instruct you to tender to the Company, on (our) (my) behalf,
the number of Shares indicated below (or if no number is indicated below, all
Shares) which are beneficially owned by (us) (me) and registered in your name,
upon terms and subject to the conditions of Offer.
NUMBER OF SHARES TO BE TENDERED: __________________ SHARES*
ODD LOTS
/ / By checking this box the undersigned represents that the undersigned
owned beneficially or of record as of the close of business on July 9,
1999 and continues to own beneficially or of record as of the
Expiration Date, an aggregate of fewer than 100 Shares and is tendering
all of such Shares.
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
SIGN HERE:
Signature(s): _____________________________
Print Name(s): _____________________________
Address(es): _____________________________
_____________________________
Telephone Number:_____________________________
Taxpayer Identification or Social Security Number:______________________________
4
<PAGE> 1
Exhibit (a)(6)
DATATRAK INTERNATIONAL, INC.
20600 CHAGRIN BOULEVARD
SUITE 1050
CLEVELAND, OH 44122
July 12, 1999
To Our Shareholders:
We are pleased to inform you that DataTRAK International, Inc.,
formerly known as Collaborative Clinical Research, Inc., is offering to purchase
3,300,000 of its Common Shares (representing approximately 51% of the currently
outstanding shares) from its shareholders through a tender offer at a purchase
price of $6.00 per share, net to the seller in cash.
This share repurchase is another important step in our efforts to
enhance shareholder value. Over the past year, we pursued a sale of the
Clinical Division, which represented our core business and the source of almost
all of our revenues. We successfully completed the sale of the Clinical
Division to West Pharmaceutical Services in April 1999. Throughout the sale
process, we continued to invest in our technology product, DataTRAK EDC(TM),
with the objective of developing a strategic relationship with an anchor
client. That continuing investment was prompted by our belief that the
electronic data capture market would eventually emerge and that we possessed
one of the most technically sound and experienced products in this industry
sector. Our recently announced software licensing and master services agreement
with Quintiles, Inc. has reinforced those beliefs, and provides us with
significant opportunities to deploy our electronic data capture product in the
United States and abroad.
Our business has changed significantly over the past year. As a result,
we now have two categories of shareholders---those who invested in the site
management organization business conducted by the Clinical Division, and those
who invested based upon the opportunities presented by DataTRAK. This tender
offer is intended to take into account the interests of both constituencies by
providing all shareholders an opportunity to obtain liquidity for a significant
portion of their investment."
The tender offer provides shareholders the opportunity to sell shares
for cash without the usual transaction costs and, in the case of those holders
who own less than 100 shares, without incurring any applicable odd lot
discounts.
The tender offer is explained in detail in the enclosed Offer to
Purchase and Letter of Transmittal. If you wish to tender your shares, detailed
instructions on how to tender shares are also in the enclosed materials. We
encourage you to read these materials carefully before making any decision with
respect to the tender offer. Neither the Company nor its Board of Directors
makes any recommendation to any stockholder as to whether to tender or refrain
from tendering shares.
Please note that the tender offer is scheduled to expire at 5:00 p.m.,
Eastern Daylight Savings Time, on August 9, 1999, unless extended by the
Company.
<PAGE> 2
Questions regarding the tender offer may be directed to MacKenzie
Partners, Inc., the Information Agent, at (800) 322-2885 (toll free).
Sincerely,
JEFFREY A. GREEN
Jeffrey A. Green, Pharm.D., FCP
President and CEO
<PAGE> 1
Exhibit (a)(7)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
NUMBER OF - IDENTIFICATION NUMBER OF -
- ------------------------ ------------------------ ------------------------ ---------------------------
<S> <C> <C> <C>
1. An individual's account The individual 8. Sole proprietorship The owner (4)
account
2. Two or more individuals The actual owner of the 9. A valid trust, estate The legal entity (do not
account or, if combined or pension furnish the identification
(joint account) funds, number of the personal
any one of the trust representative or
individuals (1) trustee unless the legal
entity itself is not
designated in the account
title) (5)
3. Husband and wife (joint The actual owner of the 10. Corporate account The corporation
account) account or, if joint
funds, either person (1)
4. Custodian account of a The minor (2) 11. Religious, charitable The organization
minor (Uniform Gift to or educational
Minors Act) organization account
5. Adult and minor (joint The adult or, if the 12. Partnership account The partnership
account) minor is the only held in the name of
contributor, the minor (1) the business
6. Account in the name of The ward, minor or 13. Association, club or The organization
guardian or committee incompetent person other tax-exempt
for a designated ward, organization
minor or incompetent
person
7. a.The usual revocable The grantor trustee (1) 14. A broker or The broker or nominee
savings trust account registered nominee
(grantor is also
trustee)
7. b.So-called trust The actual owner (1) 15. Account with the The public entity
account that is not a Department of
legal or valid trust Agriculture in the
under State law name of a public
entity (such as a
State or local
government, school
district or prison)
that receives
agricultural program
payments
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments including
the following:
- - A corporation.
- - A financial institution.
- - An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual retirement
plan.
- - The United States or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- - An international organization or any agency or instrumentality thereof.
- - A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- - A real estate investment trust. A common trust fund operated by a bank
under section 584(a) of the Code.
- - An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1) of the Code.
- - An entity registered at all times under the Investment Company Act of 1940.
- - A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441 of
the Code.
- - Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- - Payments of patronage dividends where the amount renewed is not paid in
money.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852) of the Code.
- - Payments described in section 6049(b)(5) of the Code to non-resident
aliens.
- - Payments on tax-free covenant bonds under section 1451 of the Code.
- - Payments made by certain foreign organizations. Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE MUST STILL COMPLETE THE SUBSTITUTE FORM W-9
ENCLOSED HEREWITH TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE
SUBSTITUTE FORM W-9 WITH THE PAYER, REMEMBERING TO CERTIFY YOUR TAXPAYER
IDENTIFICATION NUMBER ON PART III OF THE FORM, WRITE "EXEMPT" ON THE FACE
OF THE FORM AND SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A, and 6050N of the Code and their regulations.
PRIVACY ACT NOTICE - Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file a tax return.
Payers must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
<PAGE> 1
Exhibit (a)(8)
PRESS RELEASE
FOR IMMEDIATE DISTRIBUTION
TERRY C. BLACK
DATATRAK INTERNATIONAL, INC.
TO COMMENCE TENDER OFFER
FOR UP TO 3,300,000 OF ITS COMMON SHARES
CLEVELAND, Ohio, July 12, 1999 - DataTRAK International, Inc. (Nasdaq;
DATA), formerly known as Collaborative Clinical Research, Inc., today announced
that it will commence a tender offer for up to 3,300,000 of its Common Shares.
Under the terms of the offer, which expires at 5:00 p.m., Eastern
Daylight Savings Time, on Monday, August 9, 1999 (unless extended), shareholders
may tender Common Shares at a purchase price of $6.00 per share, net to the
seller in cash. The Company, at the close of the offer, will purchase up to
3,300,000 Common Shares. Shareholders may withdraw their tender at any time
until August 9, 1999.
DataTRAK International's President & CEO, Dr. Jeffrey A. Green stated,
"This share repurchase is another important step in our efforts to enhance
shareholder value. Over the past year, we pursued a sale of the Clinical
Division, which represented our core business and the source of almost all of
our revenues. We successfully completed the sale of the Clinical Division to
West Pharmaceutical Services in April 1999. Throughout the sale process, we
continued to invest in our technology product, DataTRAK EDC(TM), with the
objective of developing a strategic relationship with an anchor client. That
continuing investment was prompted by our belief that the electronic data
capture market would eventually emerge and that we possessed one of the most
technically sound and experienced products in this industry sector. Our
recently announced software licensing and master services agreement with
Quintiles, Inc. has reinforced those beliefs, and provides us with significant
opportunities to deploy our electronic data capture product in the United
States and abroad.
"Our business has changed significantly over the past year. As a
result, we now have two categories of shareholders---those who invested in the
site management organization business conducted by the Clinical Division, and
those who invested based upon the opportunities presented by DataTRAK. This
tender offer is intended to take into account the interests of both
constituencies by providing all shareholders an opportunity to obtain liquidity
for a significant portion of their investment."
Details of the tender offer are being mailed to all shareholders of
record. McDonald Investments, Inc. is serving as Dealer Manager for the tender
Offer. Shareholders who have questions regarding the tender offer may call
MacKenzie Partners, Inc., the Information Agent, at (800) 322-2885 (toll free).
DataTRAK International, Inc. is a leading provider of software products
and related services to the pharmaceutical, biotechnology, and medical device
industries. DataTRAK EDC(TM) software and its earlier versions have successfully
supported more than 31 clinical studies encompassing over 500 clinical sites and
17,000 patients. DataTRAK International, Inc. has offices in Cleveland, Ohio and
Bonn, Germany.
1
<PAGE> 2
Except for the historical financial information contained in this press
release, the statements made in this release are forward looking statements.
Factors that may cause results to differ materially from those in the forward
looking statements include the ability of the Company to absorb corporate
overhead and other fixed costs in order to successfully market the DataTRAK
EDC(TM) software; the development and fluctuations in the market for electronic
data capture technology; the degree of the Company's success in obtaining new
contracts; the timing of payments from sponsors and the timing of sponsor
decisions to conduct new clinical trials or cancel or delay ongoing trials; the
continued unreliability of the intranet software dependence, on key personnel;
governmental regulation; the early stage of the Company's DataTRAK business and
operations; and general economic conditions. In addition, the Company's success
depends on the outcome of various strategic initiatives it has undertaken, all
of which are based on assumptions made by the Company concerning trends in the
clinical research market and the health care industry.
<TABLE>
<CAPTION>
CONTACT:
<S> <C>
Jeffrey A. Green, Pharm.D., FCP Terry C. Black
President and Chief Executive Officer Chief Financial Officer
DataTRAK International, Inc. DataTRAK International, Inc.
216/921-6505 ext. 112 216/921-6505 ext. 110
</TABLE>
2
<PAGE> 1
Exhibit (a)(9)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Issuer Tender Offer
Statement on Schedule 13E-4 pertaining to DataTRAK International, Inc. (formerly
known as Collaborative Clinical Research, Inc.) of our report dated February 5,
1999, with respect to the consolidated financial statements of DataTRAK
International, Inc. and subsidiaries included in the Annual Report on Form 10-K
for the year ended December 31, 1998, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Cleveland, Ohio
July 9, 1999
<PAGE> 1
Exhibit (a)(10)
The Board of Directors and Shareholders
DataTRAK International, Inc.
We are aware of the incorporation by reference in the Issuer Tender Offer
Statement on Schedule 13E-4 pertaining to DataTRAK International, Inc. (formerly
known as Collaborative Clinical Research, Inc.) relating to the unaudited
condensed consolidated interim financial statements of DataTRAK International,
Inc. that are included in its Form 10-Q for the quarter ended March 31, 1999.
/s/ Ernst & Young LLP
Cleveland, Ohio
July 9, 1999
