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): July 19, 1996
HEMACARE CORPORATION
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(Exact name of registrant as specified in its charter)
California 0-15223 95-3280412
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State or other Commission File Number) (IRS Employer
jurisdiction of Identification Number)
incorporation or
organization)
4954 Van Nuys Boulevard
Sherman Oaks, California 91403
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(Address of principal executive offices and Zip Code)
(818) 986-3883
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(Registrant's telephone number, including area code)
(Not Applicable)
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On July 19, 1996, HemaCare Corporation (the "Registrant") and
Medicorp Inc. ("Medicorp") entered into a Settlement Agreement and
Mutual Release (the "Medicorp Settlement Agreement") resolving all
disputes between them related to their February 1993 License
Agreement. The License Agreement provided for the license by
Medicorp to the Registrant of certain patent rights underlying the
Registrant's research and development of Immupath , an experimental
anti-HIV hyperimmune plasma-based product intended for the
treatment of Acquired Immune Deficiency Syndrome (AIDS). This
project, together with the other related business of the
Registrant's HemaBiologics, Inc. subsidiary ("HBI"), was
discontinued by the Registrant in November 1995. In consideration
of the license rights, the Registrant was obligated to pay monetary
royalties to Medicorp and issued to Medicorp common stock purchase
warrants exercisable through February 17, 2003 for 400,000 shares
of the Registrant's common stock at an exercise price of $5.50 per
share (the "Medicorp Warrants").
Each party to the License Agreement had previously notified the
other party of its termination of the License Agreement due to
alleged breaches of the License Agreement by the other party. The
Registrant further notified Medicorp that the Registrant's
purported termination of the License Agreement for cause also
resulted in the termination of the Medicorp Warrants. Medicorp
denied that it had breached the License Agreement, asserted that
the Medicorp Warrants remained outstanding and asserted that the
Registrant was liable to Medicorp for approximately $425,000 in
past due royalties under the License Agreement.
In the Medicorp Settlement Agreement, the parties agreed (i) to
terminate the License Agreement, (ii) to mutually release each
other from all prior monetary and other breaches of the License
Agreement, (iii) that the Medicorp Warrants would remain
outstanding and exercisable and (iv) that the Registrant would
grant a nonexclusive royalty-free license to Medicorp to certain
research data and other documentation associated with the Immupath
project. The Medicorp Settlement Agreement does not require any
monetary settlement payments by either party.
In November 1995, the Registrant decided to discontinue HBI's research and
development operations and established a reserve in the amount
of approximately $1,035,000 for estimated HBI operating losses during the
period of disposal. Included in this reserve was approximately $600,000 for
the resolution of contingent liabilities in connection with the License
Agreement and the Medicorp Warrants, none of which will be required to be
applied for this purpose. To date, the overall results of the disposal of
discontinued operations, including the resolution of the Medicorp dispute,
have been more favorable than anticipated. Upon the substantial completion
of the disposal, the positive or negative balance of the reserve will be
realized or expensed, as the case may be, on the Registrant's operating
statement with the resulting balance sheet effect of reclassifying the amount
of the reserve from liabilities to shareholders' equity. Although subject to
a number of factors beyond the control of the Registrant, management believes
that the disposal of the remainder of the discontinued HBI operations will be
substantially completed during the third or fourth quarter of 1996.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements.
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None.
(b) Pro forma financial information.
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HEMACARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1996
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Actual
(Unaudited) Adjustment(1) Pro Forma
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ASSETS
Cash and cash equivalents $ 995,600 $ 995,600
Other current assets 2,035,900 2,035,900
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3,031,500 3,031,500
Plant and equipment 961,600 961,600
Other long-term assets 182,800 182,800
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$ 4,175,900 $ 4,175,900
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LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities $ 2,282,700 $ 2,282,700
Long-term liabilities 1,411,800 (600,000) 811,800
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3,694,500 3,094,500
Shareholders' Equity
Common Stock 12,312,900 12,312,900
Accumulated Deficit (11,831,500) 600,000 (11,231,500)
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481,400 1,081,400
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$ 4,175,900 $ 4,175,900
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1 Reversal of non-current reserve for discontinued operations which was provided
for resolution of the Medicorp license dispute. The reserve became unnecessary
when the dispute was settled in July 1996 without any cost to the Company.
(c) Exhibits.
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10.1 Settlement Agreement and Mutual Release, dated July
19, 1996, between the Registrant and Medicorp Inc.,
including list of omitted appendices
99.1 Agreement to furnish appendices to Exhibit 10.1
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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 hereunto duly authorized.
HEMACARE CORPORATION
(Registrant)
Date: July 31, 1996
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By: /s/ Hal I. Lieberman
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Hal I. Lieberman, President
and Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit Method of Filing
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10.1 Settlement Agreement and Mutual
Release, dated July 19, 1996,
between the Registrant and
Medicorp Inc., including list
of omitted appendices.................. Filed herewith electronically
99.1 Agreement to furnish appendices
to Exhibit 10.1........................ Filed herewith electronically
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