SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report - February 7, 1997
HEALTH FITNESS PHYSICAL THERAPY, INC.
(Exact name of registrant as specified in its charter)
Minnesota 0-25064 41-1580506
(State or other Jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
3500 West 80th Street
Suite 130
Minneapolis, Minnesota 55431
(Address of principal executive offices and zip code)
(612) 831-6830
(Registrant's telephone number, including area code)
ITEM 2. Acquisition or Disposition of Assets
On February 7, 1997, the Registrant's wholly-owned subsidiary Health
Fitness Rehab, Inc. ("HFR") acquired substantially all of the assets
(the "Assets") of Isernhagen & Associates, Inc. and Isernhagen Ltd.,
each a Minnesota corporation (collectively referred to as the
"Isernhagen Companies") pursuant to an Agreement of Purchase and Sale
between HFR and each of the Isernhagen Companies. The aggregate
purchase price for the purchase of the Assets consisted of: (i)
$1,000,000 cash paid at closing; (ii) $250,000 principal amount of
Convertible Subordinated Promissory Notes of the Registrant payable
May 7, 1998 with interest at 8% per annum and convertible at the
option of the holders into Common Stock of the Registrant; (iii)
shares of the Registrant's Common Stock to be issued on February 7,
1999 having a market value of $500,000, one-half of which will be
forfeited if Dennis Isernhagen's employment with HFR is terminated for
certain reasons prior to such issuance date and one-half of which will
be forfeited if Susan Isernhagen's employment with HFR is terminated
for certain reasons prior to such issuance date; and (iv) contingent
"earn-out" payments with respect to each of the next five years
payable in cash in an amount equal to 50% of the amount by which net
income from operations of the purchased Assets exceeds 25% of the
total revenues from the purchased Assets. The source of the $1,000,000
cash paid by the Registrant at closing was income from the
Registrant's operations and the Registrant's credit facility with
Norwest Bank Minnesota, N.A.
In connection with the acquisition, HFR entered into employment
agreements with Dennis and Susan Isernhagen pursuant to which each
will (i) serve as an employee and officer of HFR until January 31,
2002, (ii) receive options to purchase 35,000 shares of the
Registrant's Common Stock, which options shall expire ten years after
the date of grant and shall, subject to acceleration in three
installments upon HFR achieving certain earnings goals, become
exercisable nine years after the date of grant, and (iii) receive a
cash bonus with respect to each of the next five years based upon the
net income of HFR's occupational health business.
The acquired business is engaged in providing comprehensive
occupational health and rehabilitation programs and services.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired. The financial
statements of the Isernhagen Companies for the periods specified
in Item 310(c) of Regulation S-B shall be filed by amendment of
this Form 8-K not later than April 23, 1997 (60 days after the
date that this Form 8-K is due).
(b) Pro Forma Financial Information. The pro forma financial
information required by Item 310(d) of Regulation S-B shall be
filed by amendment of this Form 8-K not later than April 23, 1997
(60 days after the date that this Form 8- K is due).
(c) Exhibits.
2.1 Agreement of Purchase and Sale dated February 7, 1997 by and
between Isernhagen & Associates, Inc. and Health Fitness
Rehab, Inc.. Upon request of the Commission, the Registrant
agrees to furnish a copy of any of the following exhibits
and schedules to the Agreement and Purchase and Sale:
Exhibit A - Bill of Sale
Exhibit B - Furniture and Equipment
Exhibit C - Assignment and Assumption Agreement
Exhibit D - Consent to Use Name
Exhibit E - Convertible Subordinated Promissory Note
Exhibit F - Earn-Out Payments
Exhibit G - Permits, Certificates, Etc.
Exhibit H - Financial Statements
Exhibit I - Real Estate Lease
Exhibit J - Contracts, Agreements, Licenses, Etc.
Exhibit K - Employment Agreements
Exhibit L - List of Employees
Exhibit M - Employee Benefit Plans
Exhibit N - Patents, Trademarks, Etc.
Exhibit O - Litigation; Disputes
Exhibit P - Location of Business and Assets
Exhibit Q - Registration Agreement
Schedule I - Allocation of Purchase Price
Schedule II - Calculation of Contingent Stock
2.2 Agreement of Purchase and Sale dated February 7, 1997 by and
between Isernhagen Ltd. and Health Fitness Rehab, Inc.. Upon
request of the Commission, the Registrant agrees to furnish
a copy of any of the following exhibits and schedules to the
Agreement and Purchase and Sale:
Exhibit A - Bill of Sale
Exhibit B - Consent to Use Name
Exhibit C - Convertible Subordinated Promissory Note
Exhibit D - Earn-Out Payments
Exhibit E - Permits, Certificates, Etc.
Exhibit F - Financial Statements
Exhibit G - Contracts, Agreements, Licenses, Etc.
Exhibit H - Compensation Agreements
Exhibit I - List of Employees
Exhibit J - Employee Benefit Plans
Exhibit K - Patents, Trademarks, Etc.
Exhibit L - Litigation
Exhibit M - Location of Business and Assets
Exhibit N - Registration Agreement
Schedule I - Allocation of Purchase Price
Schedule II - Calculation of Contingent Stock
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 hereunto duly authorized.
HEALTH FITNESS PHYSICAL THERAPY, INC.
(Registrant)
Date: February 21, 1997 By: /s/ Don P. Cochran
Don P. Cochran, Chief Financial
Officer