SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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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): January 5, 1999
INTEGRA LIFESCIENCES CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-26224 51-0317849
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
105 Morgan Lane
Plainsboro, New Jersey 08536
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (609) 275-0500
Not Applicable
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(Former name or former address, if changed since last report)
ITEM 2. Acquisition or Disposition of Assets.
On January 5, 1999, Integra LifeSciences Corporation, a Delaware corporation
("Integra"), together with its wholly-owned subsidiary Rystan Company, Inc., a
New Jersey corporation ("Rystan"), entered into a series of agreements with
Healthpoint, Ltd., a Texas limited partnership ("Healthpoint"), and its
affiliate DPT Laboratories, Ltd., a Texas limited partnership ("DPT"), relating
to the sale of Rystan's Panafil(R) healing and debriding agent to Healthpoint
and the marketing of Panafil(R) and Healthpoint's Accuzyme(R) debriding agent.
Pursuant to a Purchase Agreement dated January 5, 1999 among Integra, Rystan
and Healthpoint, Healthpoint acquired the Panafil(R) product line, including
the brand name and related equipment but excluding the existing Panafil(R)
inventory, for $6,400,000 in cash paid at closing on January 5, 1999. Integra
also agreed to a ten-year non-competition provision regarding papain-urea
debridement products and granted Healthpoint a seven-year right of first
refusal regarding any new debridement agent product developed by Integra or any
of its affiliates.
Pursuant to a Manufacturing and Distribution Agreement dated January 5, 1999
among Integra, Rystan, Healthpoint and DPT, (i) Rystan will continue to
manufacture Panafil(R) during a transition period, after which the Panafil(R)
manufacturing equipment will be delivered to DPT, (ii) Healthpoint shall
reimburse Rystan, at Rystan's standard costs, for Panafil(R) manufactured by
Rystan at Healthpoint's request and (iii) Integra shall receive from
Healthpoint the first $3,000,000, less certain sales and distribution costs,
from the sale of Panafil(R) (including the Panafil(R) inventory owned by
Rystan) specifically to the podiatry market and to certain identified hospitals
with burn centers. Integra and Healthpoint also entered into two co-marketing
agreements under which Integra will receive sales commissions for marketing
Panafil(R) in the podiatry market and in certain identified hospitals with burn
centers and for marketing Accuzyme(R) in the podiatry market. Healthpoint shall
be responsible for product distribution and coordination of Panafil(R) and
Accuzyme(R) in such markets, as well as for sales of both products in all other
markets.
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro Forma Financial Information
The following unaudited pro forma condensed consolidated balance sheet as of
September 30, 1998 has been prepared by adjusting Integra's unaudited
consolidated balance sheet as of September 30, 1998 to give effect to the
disposition by Rystan, Integra's wholly-owned subsidiary, of the Panafil(R)
product line. The September 30, 1998 statement of operations is not presented
because Integra's financial statements did not include the Panafil(R) product
line prior to Integra's acquisition of Rystan on September 28, 1998. Integra did
not anticipate or plan on disposing of the Panafil(R) product line when it
acquired Rystan. The adjustments assume the disposition transaction occurred on
September 30, 1998 and includes the use of certain estimates regarding the
valuation of the Panafil(R) product line, the non-competition provision in the
Purchase Agreement and other intangible assets.
(In thousands) September Pro Forma
30,1998 Adjustments Pro Forma
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ASSETS
Current Assets:
Cash and cash equivalents ........................................... $ 2,560 $ 6,400 (a) $ 8,960
Short-term investments .............................................. 20,692 -- 20,692
Accounts receivable, net ............................................ 2,949 -- 2,949
Inventories ......................................................... 3,390 -- 3,390
Prepaid expenses and other current assets ........................... 935 -- 935
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Total current assets ............................................ 30,526 6,400 36,926
Property and equipment, net .............................................. 6,506 (250)(b) 6,256
Other assets and goodwill ................................................ 1,502 (1,037)(c) 465
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Total assets .................................................... $ 38,534 $ 5,113 $ 43,647
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade ................................................ 477 -- 477
Accrued expenses and other current liabilities ......................... 3,689 322 (d) 4,011
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Total current liabilities ....................................... 4,166 322 4,488
Other liabilities ........................................................ 303 715 (e) 1,018
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Total liabilities ............................................... 4,469 1,037 5,506
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Stockholders' Equity:
Preferred stock, $.01 par value (15,000 authorized shares; 500 Series A
Convertible shares issued and outstanding, $4,000
liquidation preference) ................................................ 5 -- 5
Common stock, $.01 par value (60,000 authorized shares; 15,753
issued and outstanding) ................................................ 158 -- 158
Additional paid-in capital ............................................... 119,904 -- 119,904
Unearned compensation related to stock options ........................... (198) -- (198)
Notes receivable - related parties ....................................... (35) -- (35)
Accumulated other comprehensive income ................................... (104) -- (104)
Treasury stock at cost(46 shares) ........................................ (259) -- (259)
Accumulated deficit ...................................................... (85,406) 4,076 (f) (81,330)
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Total stockholders' equity ...................................... 34,065 4,076 38,141
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Total liabilities and stockholders' equity ............................... $ 38,534 $ 5,113 $ 43,647
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The accompanying notes are an integral part of the
unaudited pro forma condensed consolidated balance sheet
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(a) Reflects the receipt of $6.4 million, which was the purchase price
received at closing.
(b) Reflects the adjustment for the disposition of manufacturing assets
used in the production of Panafil(R) and the write down of other fixed
assets as a result of the disposition.
(c) Reflects the reduction in goodwill associated with the acquisition of
the Panafil(R) product line when Integra acquired Rystan in September
1998.
(d) Reflects various estimated facility transfer costs and other
liabilities associated with the transaction including $74,000 as the
current year portion of the estimated liability associated with the
non-competition provison.
(e) Reflects the long-term portion of the estimated liability associated
with the non-competition provision.
(f) Reflects the estimated net gain recognized on the transaction subject
to the final valuation of the non-competition provision. The gain does
not reflect any income tax provision as Integra believes it will be
able to utilize certain deferred tax assets, which are currently
subject to a valuation allowance and current year operating losses.
(c) Exhibits.
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Exhibit Number
(Referenced to
Item 601 of
Regulation S-K) Description of Exhibit
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2 Purchase Agreement dated January 5, 1999 among
Integra LifeSciences Corporation, Rystan Company,
Inc. and Healthpoint, Ltd.*
10 Manufacturing and Distribution Agreement dated
January 5, 1999 among Integra LifeSciences
Corporation, Rystan Company, Inc., Healthpoint, Ltd.
and DPT Laboratories, Ltd.*
99 Press Release dated January 5, 1999
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* Integra agrees to furnish supplementally a copy of any omitted
schedules or attachments to the Commission upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTEGRA LIFESCIENCES CORPORATION
Date: January 19, 1999 By: /s/ Stuart M. Essig
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Stuart M. Essig, President and
Chief Executive Officer
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INDEX OF EXHIBITS
Exhibit No. Description of Exhibit
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2 Purchase Agreement dated January 5, 1999 among Integra
LifeSciences Corporation, Rystan Company, Inc. and
Healthpoint, Ltd.*
10 Manufacturing and Distribution Agreement dated January 5,
1999 among Integra LifeSciences Corporation, Rystan Company,
Inc., Healthpoint, Ltd. and DPT Laboratories, Ltd.*
99 Press Release dated January 5, 1999
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* Integra agrees to furnish supplementally a copy of any omitted
schedules or attachments to the Commission upon request.