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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) January 14, 1997
NU-TECH BIO-MED, INC.
(Exact Name of Registrant as specified in charter)
Delaware 0-11772 25-1411971
(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
500 Fifth Avenue Suite 2424, New York, New York 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 391-2424
55 Access Road Warwick, Rhode Island 02886
(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISTION OR DISPOSITION OF ASSETS.
PROPOSED SALE OF MEDICAL SCIENCE INSTITUTE TO PHYSICIANS CLINICAL
LABORATORY.
As previously disclosed, on November 18, 1996, Nu-Tech Bio- Med, Inc.
(the "Company") acquired all of the capital stock of Medical Science Institue
("MSI"). The Company had acquired MSI upon approval by the United States
Bankruptcy Court of the Central District of California (the "Court") (Case No.
LA 95-37790 TD) of the First Amended Plan of Reorganization (the "MSI Plan") of
Medical Science Institute. MSI is engaged in the medical laboratory business
primarily in the State of California and had been operating under Chapter 11 of
the U.S. Bankruptcy Code since October 26, 1995. MSI provides clinical
laboratory testing services, including testing of human tissue and fluid
specimens to physicians, managed-care organizations, hospitals and other health
care providers. MSI is a California corporation with its principal executive
offices located in Burbank, California.
The Company has agreed to sell its ownership interests in MSI to
Physicians Clinical Laboratory, a Delaware corporation ("PCL") which, in turn,
subject to approval of the United States Bankruptcy Court having jurisdiction
over PCL, will become a 51% subsidiary of Nu-Tech. PCL is a debtor-in-possession
operating under Chapter 11 of the United States Bankruptcy Code.
In addition, in November 1996 Nu-Tech reached an agreement with the
holders of the senior debt, subordinated debt and the management of PCL whereby
Nu-Tech will acquire a 51% interest in PCL. The terms of the agreement provided
that PCL would file a plan of reorganization under Chapter 11 of the United
States Bankruptcy Code to effectuate the agreement (the "PCL Plan"). On November
8, 1996, PCL and the Company filed the PCL Plan with the U.S. Bankruptcy Court
located in the Central District of California (Case No. SV96-23185-GM). PCL is a
full service clinical laboratory capable of providing a comprehensive battery of
testing services. PCL is a publicly held corporation which, until recently,
filed reports with the Commission under the Securities Exchange Act of 1934, as
amended. PCL is delinquent in its filings with the Commission and has not filed
any reports since the quarter ended May 31, 1996. PCL has been operating as a
debtor-in- possession under Chapter 11 of the Bankruptcy Code since November 8,
1996. PCL's common stock is traded in the over-the-counter market of the
National Securities Dealers Automated Quotation System under the symbol "PCLI".
The Company had previously purchased approximately $13,300,000 of
Senior Debt for $10,000,000 on November 7, 1996 in advance of the filing of the
PCL Plan with the bankruptcy court. In accordance with the PCL Plan, certain
holders of senior debt
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contributed $10,000,000 in DIP financing to PCL, which under the terms of the
reorganization, will be forgiven. The PCL Plan also requires that the Company
purchase an additional 17% of the capital stock of PCL for $5,000,000 upon
confirmation of the PCL Plan. Pursuant to the PCL Plan, and assuming approval of
the PCL Plan by the bankruptcy court, the approximately $13,300,000 of debt
purchased by Nu-Tech would be converted into 34% of the common stock of PCL,
which together with the 17% purchased for $5,000,000, will result in NuTech
owning 51% of the outstanding common stock of PCL.
The Company and PCL have submitted a motion to the United States
Bankruptcy Plan pursuant to which the Company will sell all of its interests in
MSI to PCL for its costs and certain expenses of the acquisition aggregating
aproximately $7,200,000 plus any additional sums paid by Nu-Tech to MSI since
its acquisition. Nu-Tech had agreed to the terms of this sale for strategic
business purposes. PCL will also assume all other obligations incurred by
Nu-Tech in connection with the MSI acquisition, including Nu-Tech's guarantee of
certain remiang obligations under the MSI Plan. The motion has been set for
hearing on January 29, 1997. Assuming the court approves the motion, of which
there can be no asurance, a closing will be held shortly thereafter. As stated
above, if the PCL Plan is approved by the bankruptcy court, Nu-Tech will own 51%
of the ownership interes of PCL, which in turn will own MSI as a wholly-owned
subsidiary.
Pursuant to the PCL Plan, J. Marvin Feigenbaum, President and Chief
Executive Officer of the Company, has been retained as crisis manager of PCL and
serves as the equivalent of the Chief Operating Officer of PCL. It is
contemplated that Mr. Feigenbaum will serve in such capacity pending the
bankruptcy court's determination of the PCL Plan.
The PCL Plan is subject to the approval of the bankruptcy court and
there can be no assurance such approval will be obtained, that the PCL Plan will
be approved as filed with the court or that the acquisition of PCL will be
consummated. There can be no assurance that the Company will be able to
successfully operate the business even if the PCL acquisition is consummated.
Should the PCL Plan not be consummated, Nu-Tech will be a creditor of PCL. Under
the terms of the PCL Plan, however, no competing offer for PCL may be accepted
by the bankruptcy court unless (i) such competing offer is at least $2.5 million
higher than the bid by Nu-Tech and (ii) on the effective date of the competing
plan Nu-Tech receives $1.88 million in cash as compensation for its time and
expense in pursuing the PCL Plan.
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ITEM 5. OTHER EVENTS.
On January 23, 1997 the Company obtained a loan in the principal amount
of $2,000,000 from a private lender, the proceeds of which were used to repay an
earlier lender who had provided funds for a portion of the MSI acquisition. The
new loan bears interest at 7.5% per annum and is due and payable 60 days from
the date of the loan. The loan is secured by the Company's $13,300,000 debt
participation interest in PCL and by the capital stock of MSI. The lender also
received five year common stock purchase warrants to purchase 100,000 shares of
common stock at $11.50 per share.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL,INFORMATION
AND EXHIBITS.
a. Financial Statements of Businesses Acquired.
NONE
b. Pro Forma Financial information.
NONE
c. Exhibits.
2.5 Motion of Physician's Clinical Laboratory for
Entry of Order authorizing Physician's Clinical
Laboratory to acquire all of the Issued and
Outstanding Stock of Medical Science Institute.
10.29 Form of Promissory Note of Nu-Tech Bio-Med, Inc. in
the principal amount of $2,000,000 dated January 23,
1997 in favor of The Michael Jesselson Trust.
10.30 Security Agreement dated January 23, 1997 between
Nu-Tech Bio-Med, Inc. and The Michael Jesselson
Trust
10.31 Form of Common Stock Purchase Warrant dated
January 23, 1997 to purchase 100,000 shares of
Common Stock at an exercise price of $11.50 per
share.
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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.
NU-TECH BIO-MED, INC.
By: /s/ J. Marvin Feigenbaum
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J. Marvin Feigenbaum
Chairman of the Board,
President, Chief Executive
and Chief Financial Officer
Dated: January 27, 1996
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EXHIBIT INDEX
Exhibit No. Description
2.5 Motion of Physician's Clinical Laboratory for
Entry of Order authorizing Physician's Clinical
Laboratory to acquire all of the Issued and
Outstanding Stock of Medical Science Institute.
10.29 Form of Promissory Note of Nu-Tech Bio-Med, Inc. in the
principal amount of $2,000,000 dated January 23,
1997 in favor of The Michael Jesselson Trust.
10.30 Security Agreement dated January 23, 1997 between
Nu-Tech Bio-Med, Inc. and The Michael Jesselson
Trust
10.31 Form of Common Stock Purchase Warrant dated
January 23, 1997 to purchase 100,000 shares of
Common Stock at an exercise price of $11.50 per
share.