SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 16, 1998
(Date of earliest event reported)
NU SKIN ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-12421 87-0565309
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
75 West Center Street, Provo, Utah 84601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 345-6100
(Former name or former address, if changed since last report.)
The Index to Exhibits appears on page 5.
Item 2. Acquisition or Disposition of Assets.
On October 16, 1998, Nu Skin Enterprises, Inc., a Delaware corporation
("Nu Skin"), completed the acquisition of privately-held Generation Health
Holdings, Inc., a Delaware corporation ("Generation Health Holdings"), the
parent company of Pharmanex, Inc., a Delaware corporation ("Pharmanex"), a
leading research and development company of natural health supplements.
The purchase price was approximately 4.04 million shares of Nu Skin
Class A common stock (the "Class A Common Stock"), including approximately
260,000 shares issuable upon exercise of employee options assumed by Nu Skin.
The Company also repaid or assumed approximately $34 million in liabilities.
Pursuant to the terms of the acquisition, Nu Skin will be entitled to
recover a portion of the shares of Class A Common Stock issued pursuant to the
acquisition (approximately 435,000 shares) in the event that certain milestones
with respect to Cholestin(TM) are not achieved. Reference is made to Section
5.16 of the Restated Agreement and Plan of Merger and Reorganization attached
hereto as Exhibit 2.1 for more detailed information on the milestones, which
Section 5.16 is incorporated by reference herein. Cholestin is a dietary
supplement product designed to aid in the maintenance of healthy cholesterol
levels. On May 20, 1998, the Food and Drug Administration (the "FDA") issued a
"Final Order" announcing its decision that it considered Cholestin to be a
"drug" and a "new drug" rather than a dietary supplement, and that Cholestin
could not be marketed in the United States as a dietary supplement. On June 1,
1998, Pharmanex filed an amended complaint requesting the United States District
Court for the District of Utah (the "Court") find that the FDA decision was
contrary to law. On February 6, 1999, the Court ruled that Cholestin was not a
drug and could be legally sold as a dietary supplement. There can be no
assurance that the FDA will not appeal the ruling of the Court, or, in the event
of such an appeal, that Pharmanex would prevail. An adverse decision on appeal
could restrict the ability of Pharmanex to distribute Cholestin in the United
States.
Pharmanex's products are made from naturally occurring plant-based
substances that have been proven effective through extensive scientific
research. At the time of the acquisition, Pharmanex sold 33 standardized
botanicals and five proprietary natural dietary supplements through retail
outlets in the United States.
Based in Simi Valley, Calif., Pharmanex maintains a raw material
extraction facility in Huzhou, China; a research and development center in
Shanghai, China; a clinical and pharmacology center at Beijing Medical
University; and contract cultivation areas in China and Chile. Nu Skin currently
plans to use these facilities in the manner described. In addition, Pharmanex
has collaboration agreements with China's Institute of Materia Medica, Beijing
Medical University, Shanghai Medical University, Columbia University, the
University of California Los Angeles and Kansas University. The Pharmanex
research team includes more
than 40 M.D.- and Ph.D.-level scientists, many with extensive pharmaceutical
industry experience.
Nu Skin currently intends to use Pharmanex to form the basis of a new
business opportunity to be named Pharmanex. William McGlashan Jr. will continue
as president of Pharmanex. As part of its divisional restructuring, Nu Skin also
expects to introduce a new distributor compensation plan to coincide with the
launch of the Pharmanex division.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
2.1 Restated Agreement and Plan of Merger and Reorganization,
dated as of October 16, 1998 among Nu Skin Enterprises,
Inc., Sage Acquisition Corporation and Generation Health
Holdings, Inc.
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 thereunto duly authorized on the date indicated.
NU SKIN ENTERPRISES, INC.
By: /s/ M. Truman Hunt
Name: M. Truman Hunt
Title: Vice President and General Counsel
Dated: April 12, 1999
INDEX TO EXHIBITS
Exhibit Description
2.1 Restated Agreement and Plan of Merger and Reorganization, dated
as of October 16, 1998 among Nu Skin Enterprises, Inc., Sage
Acquisition Corporation and Generation Health Holdings, Inc.