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Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report April 20, 1999
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(Date of earliest event reported)
DataTRAK INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Ohio (000-20699) 34-1685364
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(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
incorporation) Identification No.)
20600 Chagrin Boulevard, Cleveland, Ohio 44122
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 491-9930
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Collaborative Clinical Research, Inc.
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(Former name or former address, if changed since last report.)
Page 1 of 4 Pages
Exhibit Index Appears on Page 4
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Item 2. Acquisition or Disposition of Assets
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Effective April 20, 1999, DataTRAK International, Inc. (the "Company"), formerly
Collaborative Clinical Research, Inc. ("Collaborative"), sold substantially all
of the of the assets and liabilities of the Company's Affiliated Site Network,
and the clinical research operations conducted by GFI Pharmaceuticals, Inc.
("GFI") and Collaborative Holdings, Inc. ("WCE") (the businesses of the
Affiliated Site Network, GFI and WCE are hereinafter collectively referred to as
the "Clinical Business") to The West Company, Incorporated ("West"). The
Clinical Business provides services to three segments of the pharmaceutical and
biotechnology industries. Through WCE, it provides clinical research services
relating to the reclassification of prescription drugs into drugs available for
over the counter ("OTC") purchase and other OTC services. In addition, the
Clinical Business provides phase I research services from its 80-bed clinic at
GFI. Finally, through its Affiliated Site Network which is comprised of six
therapeutically focused sub-networks drawn from over 450 affiliated research
sites ("Affiliated Sites"), it provides phase II, III, and IV research services.
Subsequent to April 20, 1999, Collaborative will no longer operate the Clinical
Business. The sale was accomplished pursuant to an Asset Purchase Agreement,
dated December 21, 1998, among Collaborative, GFI, WCE, DataTRAK, Inc. and West.
The assets acquired by West consist of accounts receivable, tangible personal
property, rights under certain real property leases (which were assumed by West)
and contract rights. West also assumed certain liabilities related to employee
compensation and liabilities under any assigned contracts. The sale price for
the sold business was $15.0 million, adjusted for the Clinical Business's
working capital on April 20, 1999 and the collection of Clinical Business
accounts receivable during the 180 days subsequent to April 20, 1999. An initial
payment of $16.8 million, of which $1.0 million was placed in escrow, was made
to the Company on April 20, 1999. The purchase price offered by West was the
highest price offered to the Company. The Company anticipates that it will
distribute some or all of the proceeds from the sale to its shareholders through
a share repurchase or a dividend.
There are no material relationships between West and the Company or any of their
affiliates, directors or officers.
Item 5. Other Events
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Effective April 21, 1999 Collaborative changed its name to DataTRAK
International, Inc. As of April 21, 1999, the Company's Common Shares were
traded on The Nasdaq National Market under the trading symbol "DATA".
Page 2 of 4 Pages
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Pro Forma Financial Information.
DataTRAK International, Inc. and subsidiaries, Pro Forma Consolidated
Financial Statements
Pro Forma Condensed Consolidated Balance Sheet of DataTRAK
International, Inc. and subsidiaries at December 31, 1998
Pro Forma Consolidated Statements of Operations of DataTRAK
International, Inc. and subsidiaries for the year ended December 31,
1998
(b) Exhibits.
The Exhibits to this Report are listed in the Exhibit Index set forth
elsewhere herein.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DataTRAK International, Inc.
By: /s/ Terry C. Black
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Terry C. Black
Vice President of Finance, Chief Financial
Officer, Treasurer and Assistant Secretary
Date: April 29, 1999
Page 3 of 4 Pages
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
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2.1 Asset Purchase Agreement, dated December 21, 1998 among Collaborative
Clinical Research, Inc., GFI Pharmaceutical Services, Inc., Collaborative
Holdings, Inc., DataTRAK, Inc. and The West Company, Incorporated (A)
3.1 Form of Certificate of Amendment to the Fifth Amended and Restated
Articles of Incorporation (A)
99.1 Press Release Issued by the Company on April 20, 1999.
</TABLE>
(A) Incorporated herein by reference to the appropriate exhibit to the
Company's Schedule 14A dated March 17, 1999 (Commission File No.
000-20699)
Page 4 of 4 Pages
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PRO FORMA FINANCIAL DATA
The following unaudited Pro Forma Condensed Consolidated Balance Sheet as of
December 31, 1998 and Consolidated Statements of Operations for the year ended
December 31, 1998 are based on the historical financial statements of DataTRAK
International Inc. (the "Company"). The Pro Forma Condensed Consolidated Balance
Sheet is adjusted to reflect the sale of the assets and liabilities of the
Company's Affiliated Site Network, and the clinical research operations
conducted by GFI Pharmaceuticals, Inc. ("GFI") and Collaborative Holdings, Inc.
("WCE") (the businesses of the Affiliated Site Network, GFI and WCE are
hereinafter collectively referred to as the "Clinical Business") to The West
Company, Incorporated ("West") for $15.0 million in cash, less applicable
transaction costs, adjustments for working capital and the collection of net
accounts receivable contemplated by the asset purchase agreement (the
"Agreement") among Collaborative Clinical Research, Inc., GFI, WCE, DataTRAK,
Inc. and West had this transaction occurred on December 31, 1998. The Proposed
Sale is a sale of a business. Pursuant to the Agreement, all of the assets that
constitute the entire business of the Clinical Business were sold to West. The
Pro Forma Consolidated Statements of Operations are adjusted to reflect the sale
of the Company's Clinical Business to West and the June and September 1998
closure of other Clinical Business locations had these transactions occurred as
of the beginning of 1998. The pro forma operating results are not necessarily
indicative of the operating results that would have been achieved had the
disposition actually occurred at the beginning of 1998, nor do they purport to
indicate the results of future operations. These Pro Forma Consolidated
Financial Statements are based on the assumptions set forth in the notes to such
statements.
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
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SALE OF
CLINICAL
BALANCE SHEET DATA HISTORICAL BUSINESS (a) PRO FORMA
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Assets:
Current assets:
Cash and cash equivalents $ 4,072,586 $ 13,862,599 $ 17,935,185
Short-term investments 22,620,667 22,620,667
Accounts receivable, net 2,731,567 (2,703,396) 28,171
Prepaid expenses and other current assets 366,352 (99,647) 266,705
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Total current assets 29,791,172 11,059,556 40,850,728
Property and equipment, net 2,393,266 (1,021,789) 1,371,477
Goodwill and other assets, net 1,355,361 (1,350,317) 5,044
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Total assets $ 33,539,799 $ 8,687,450 $ 42,227,249
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Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable $ 1,012,454 $ (658,610) $ 353,844
Accrued expenses 3,664,577 (1,543,715) 2,120,862
Deferred revenue 625,068 (588,119) 36,949
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Total current liabilities 5,302,099 (2,790,444) 2,511,655
Shareholder's equity:
Foreign currency translation
(44,041) 4,589 (39,452)
Common shares, without par value 49,704,742 49,704,742
Retained earnings (accumulated deficit) (21,423,001) 11,473,305 (9,949,696)
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Total shareholders' equity 28,237,700 11,477,894 39,715,594
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Total liabilities and shareholders' equity $ 33,539,799 $ 8,687,450 $ 42,227,249
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(a) Represents the sale, and the related gain on sale of the assets and
liabilities of the Company's Clinical Business to West for $15.0
million, less transaction costs estimated to be $1.3 million and
a positive working capital adjustment of $13,000 at December 31, 1998.
At December 31, 1998 the Clinical Business had current assets of
$2,803,000 and current liabilities of $2,790,000 resulting in a
positive working capital of $13,000. The adjustment for the collection
of net accounts receivable is not included in the Pro Forma
Consolidated Balance Sheet as such amount will not be determined until
180 days after the sale, as contemplated by the Agreement. The actual
working capital adjustment to be made to the purchase price will be
based upon a final calculation of the net working capital of the
Clinical Business as of the date on which the sale is consummated and
will therefore not be known until after such time, as defined by the
Agreement.
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PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
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SALE OF
CLINICAL
HISTORICAL BUSINESS (a) PRO FORMA
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Revenue $ 13,226,078 $ 13,094,326 $ 131,752
Direct Costs 10,511,024 10,046,637 464,387
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Gross profit (loss) 2,715,054 3,047,689 (332,635)
Selling, general and administrative expenses 8,968,913 4,898,906 4,070,007
Impairment charge 6,056,019 6,056,019 -----
Special items 1,998,187 1,244,973 753,214
Depreciation and amortization 1,155,110 685,238 469,872
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Loss from operations (15,463,175) (10,049,754) (5,625,728)
Interest income 1,679,260 ----- 1,679,260
Other expense (212,307) (212,307) -----
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Loss before income taxes (13,996,222) (9,837,447) (3,946,468)
Income tax expense (benefit) 80,000 80,000 -----
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Net loss $(14,076,222) $(10,129,754) $ (3,946,468)
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Net loss per share: basic and diluted $ (2.19) $ (0.61)
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Weighted average common shares outstanding:
basic and diluted 6,421,820 6,421,820
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</TABLE>
(a) Represents the removal of revenue and expense items related to the
Company's Clinical Business, as if that business was sold and/or closed
at the beginning of 1998. Excludes the effect of nonrecurring
adjustments for working capital, the collection of net accounts
receivable to be made upon the consummation of the sale, and the
related gain on sale of the assets and liabilities of the Clinical
Business.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
COLLABORATIVE ANNOUNCES CLOSING OF SALE TO WEST AND CHANGE OF NAME,
TICKER SYMBOL
Cleveland, Ohio, April 20, 1999...Collaborative Clinical Research, Inc. (NASDAQ:
CCLR) announced today that the sale of its Clinical Business to West
Pharmaceutical Services, Inc. has closed. As approved at the special meeting of
shareholders on April 14, 1999 the company will change its name to DataTRAK
International, Inc. The new NASDAQ ticker symbol will be "DATA" and will be
active beginning with the opening of the market on April 21, 1999.
The Company provides a suite of electronic data capture (EDC) software products
known as DataTRAK EDC(TM) and related services to the pharmaceutical,
biotechnology, and medical device industries. DataTRAK EDC(TM) was developed in
order to deliver clinical research data from investigative sites to sponsors
faster and more efficiently than conventional manual methods. DataTRAK EDC(TM)
can be deployed worldwide in either a distributed platform using laptops or in a
centralized server "thin client" environment using the Internet. DataTRAK
EDC(TM) software and its earlier versions have successfully supported more than
30 clinical studies encompassing over 500 clinical sites and 17,000 patients.
DataTRAK International, Inc. has offices located in Cleveland, Ohio and Bonn,
Germany.
The statements made in this release are forward looking statements.
Factors that may cause actual 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; 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.
CONTACT:
Jeffrey A. Green, Pharm.D., FCP Terry C. Black
Chief Executive Officer Chief Financial Officer
DataTRAK International, Inc. DataTRAK International, Inc.
216/491-9930 216/491-9930
