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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 17, 1997
U.S. MEDICAL PRODUCTS, INC.
(Exact name of Registrant as specified in its charter)
TEXAS 74-2599718
(State of incorporation) (IRS Employer Identification No.)
1-12954
(Commission File Number)
12201 Technology Boulevard, Suite 100, Austin, Texas
(Address of principal executive offices)
Registrant's telephone number: (512) 257-8787
This document consists of 3 pages of which this is page 1.
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Item 1. Changes in Control of Registrant
None
Item 2. Acquisition or Disposition of Assets
On May 20, 1997, U.S. Medical Products, Inc. ("USMP") entered into
an Asset Purchase Agreement and License Agreement with Hayes
Medical, Inc., a California corporation ("Hayes Medical"), pursuant
to which it agreed to sell to Hayes Medical substantially all of
its tangible and intangible assets. These assets include implant
and instrument inventories, property and equipment, patents and
regulatory approvals.
The closing of the Asset Purchase Agreement took place on
November 1, 1997, pursuant to the terms of an Amendment to Asset
Purchase Agreement, dated October 31, 1997.
Pursuant to the Asset Purchase Agreement, Hayes Medical acquired
substantially all of the Company's assets and liabilities. The
purchase price is 56.25% of the agreed upon historical cost of the
assets (determined according to GAAP) less certain liabilities to
be assumed by Hayes Medical as of the closing of the Asset Purchase
Agreement. The purchase price shall be determined based on the
value of the assets to be purchased and liabilities to be assumed
as of the closing date.
Under the License Agreement, Hayes Medical acquired an exclusive,
irrevocable, royalty-free, worldwide license, with the right to
sublicense, to the Company's intellectual property relating to the
Company's orthopaedic product lines. Upon the closing of the Asset
Purchase Agreement, Hayes Medical became the sole and
exclusive owner of the intellectual property. The consideration
for the license to and tranfer of the intellectual property was a cash
payment of $400,000 and a promissary note in the amount of $150,000 at
10% interest per annum payable over 18 months.
Item 3. Bankruptcy or Receivership
Not applicable
Item 4. Changes in Registrant's Certifying Accountants
None
Item 5. Other Events
None
Item 6. Resignations of Registrant's Directors
None
Item 7. Financial Statements and Exhibits
(b) PRO FORMA FINANCIAL INFORMATION.
The required pro forma financial information will be
filed as an amendment to this Report as soon as practicable, but
no later than 60 days after the date this Report is required to be
filed.
(c) EXHIBITS.
10.1 Amendment to Asset Purchase Agreement, dated as of October
31, 1997, between Hayes Medical, Inc. and U.S. Medical Products,
Inc.
Item 8. Changes in Fiscal Year
Not Applicable
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. Medical Products, Inc.
Registrant
Dated: November 17, 1997 /s/ Fred Mindermann
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Fred Mindermann
Chief Executive Officer
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AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS AMENDMENT to Asset Purchase Agreement is made as of October 31, 1997,
between HAYES MEDICAL, INC. , a California Corporation, as "Buyer", and U.S.
MEDICAL PRODUCTS, INC., a Texas Corporation, as "Seller".
RECITALS
A. On May 20, 1997, buyer and Seller entered into an Asset Purchase
Agreement (the "Agreement"), pursuant to which Seller agreed to sell Buyer
certain tangible and intangible assets and Buyer agreed to purchase such
assets and assume specified and limited liabilities of Seller.
B. The parties now wish to amend the Agreement to expedite the Closing Date
to November 1, 1997, under the following conditions, which modify the
Agreement only as indicated below.
IT IS HEREBY AGREED AS FOLLOWS:
1. Section VII.1 is amended to define the Closing Date as November 1,
1997, provided all the Conditions set forth in Section VIII have been met.
2. Section III.2 is amended to permit Seller to deliver to Buyer on
November 1, 1997, an Updated Draft Closing Statement based on September 30,
1997 Financial Statements. By November 21, 1997, Seller shall deliver to
Buyer a Final Closing Statement based on October 31, 1997 Financial
Statements. By December 12, 1997, Buyer shall accept or object to the Final
Closing Statement. In all other respects, this Section shall remain unchanged.
3. Sections III.1 (a), (b) and VII.3 (a), (b) are amended to permit the
Closing on November 1, 1997, without delivery by Buyer of the Cash Payment
and Promissory Note, with such cash payment only becoming payable from Buyer
to Seller as follows: (1) $30,000.00 upon signing of this Amendment; (2) up
to $30,000.00 upon delivery of the Final Closing Statement from Seller to
Buyer provided the Assets exceed the Assumed Liabilities; and (3) when the
Final Closing Statement is agreed upon by both parties or is adjusted by an
independent certified auditor, if required, as set forth in Section III.2
(the "Reconciliation") and only to the extent the Assets exceed the Assumed
Liabilities.
4. The balance of the Note payable under the License Agreement (the
"License Note") will be offset to the extent the Assumed Liabilities exceed
the Assets.
5. At the completion of the Reconciliation, in the event the Assumed
Liabilities exceed the Assets plus the License Note (the "Excess
Liabilities"), at Buyer's option, Buyer may require Seller or its successor
to make a cash payment to Buyer within 10 days after the Reconciliation to
the extent of such Excess Liabilities, or Buyer may reject certain
liabilities or Acquired Contracts to the extent of such Excess Liabilities.
6. Accounts receivable from Buyer to Seller shall not be due at the
Closing and shall become an Asset on the Closing Statement; provided,
however, such accounts receivable shall not be subject to the 56.25% discount
set forth in paragraph III.1(b) of the Agreement.
7. The outstanding payable to the Scientific Advisory Board shall
become an Assumed Liability by Buyer, in the amount set forth according to
each contract.
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8. Buyer shall assume the Trammell Crow lease through the remainder of
the lease period, without any right of offset against the Assets. The lease
deposit shall be an Asset purchased by Buyer.
9. In all other respects, the Agreement shall remain unchanged and the
parties confirm all of their respective rights and obligations as described
therein.
SELLER BUYER
U.S. MEDICAL PRODUCTS, INC. HAYES MEDICAL, INC.
By: By:
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Frederick J. Mindermann Daniel E. E. Hayes, Jr.
CEO President and CEO
