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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 (Date of earliest event reported) November 22, 2000
HEALTHRITE, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-23016 13-3714405
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or organization) Ident. No.)
11445 Cronhill Drive, Owing Mills, Maryland 21117
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410)-581-8042
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
On November 22, 2000, HealthRite, Inc. completed and closed on a new financial
package on more favorable terms that will adequately fund its business plan for
2001. GE Capital has loaned Jason Pharmaceuticals, Inc. $300,000 secured by
equipment with a 4-year term at a fixed rate of 11.75% interest. A stockholder
has invested $250,000 cash in the Company on a private placement of Series A
secured debt convertible to common stock with a 12% interest rate payable in
cash or stock annually or at conversion at the option of the holder. This Series
A secured debt is secured by the intangible Medifast(R) trademarks. The investor
also received a 150,000 stock option priced at $0.25 per share with a sales and
marketing consulting agreement providing consulting services as it related to
the Company's Medifast(R) branded products.
The Company also has received an asset-based line of credit of $500,000 with
Star Financial Limited Partnership secured by receivables and inventory. The CEO
of Jason Pharmaceuticals, Inc. and his family provided a personal guarantee to
complete this financing arrangement. For their guarantee, the Board of Directors
approved, and the Company has agreed to issue, 1,000,000 shares of common stock
at par value to the Chairman of the Board and his family. The stock is issued in
recognition of his efforts in turning around the Company and for the risk of the
personal guarantee required to complete this financial package which is
advantageous to the Company. The personal guarantee of this new financial
package is necessary because the "going concern" issued by the independent
auditors of the fiscal year 1999 10-K prevented the Company from having
sufficient capital to fund its business plan.
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.
HEALTHRITE, INC.
(Registrant)
/S/ BRADLEY T. MACDONALD
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Bradley T. MacDonald
Chairman & CEO