UNITED STATES
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) April 17, 1998
________________
INTEGRATED MEDICAL RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
Kansas 0-21427 48-1096410
____________________________ ___________________ ___________________
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
11320 West 79th Street, Lenexa, Kansas 66214
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 962-7201
N/A
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(Former name or former address, if changed since last report.)
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ITEM 5: Other Events
As part of a financing arrangement entered into with the Company on March 5,
1998, KMI loaned the Company $1,600,000 at an interest rate of 8.5% pursuant to
a Note Purchase Agreement, as amended (the "Note Purchase Agreement"), and
Convertible Note, as amended (the "Note"), and received four options to purchase
shares of common stock at increasing share prices and with staggered exercise
dates. On March 31, 1998, KMI invested $500,000 in stock of the Company by
exercising a portion of its initial option to purchase shares of the common
stock of the Company.
On April 17, 1998, Kardatzke Management, Inc. ("KMI") converted the Note into
744,186 shares of common stock of the Company and invested an additional
$775,000 in stock of Integrated Medical Resources, Inc. (the "Company") by
exercising the remaining portion of its initial option to purchase shares of the
common stock of the Company and by exercising a portion of its second option to
purchase shares of the common stock of the Company. The Company issued 360,464
shares of common stock to KMI in connection with the exercise of these options.
KMI and the Company also executed an agreement whereby KMI and Dr. E. Stanley
Kardatzke, a principal of KMI, agreed to postpone the exercise of any additional
options on the common stock of the Company until the Company receives
shareholder approval for the issuance of those shares.
In addition, following the conversion of the Note and the exercise of the
entire initial option, Dr. Kardatzke has joined the Company, effective April 20,
1998, in the capacity of Chief Executive Officer and Chairman of the Board of
Directors pursuant to the terms of the Note Purchase Agreement. Dr. Kardatzke
has a three year employment contract with the Company and, in connection with
his employment, may receive options to purchase an aggregate of 600,000 shares
of common stock at a purchase price of $2.15 per share which vest over four
years.
The Company has a $1,400,000 loan outstanding from its two major outside
investors that is due May 31, 1998 and which will automatically convert into
securities of the Company at the same per share price as the conversion of the
KMI loan. However, on April 17, 1998, the investors and the Company agreed that
the automatic conversion of the loan will not take place until the stockholders
of the Company have approved the issuance of additional shares in connection
with such loan.
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ITEM 7: Exhibits
Exhibit Description
4(h) Agreement to Postpone Time of Exercise by and among the Company,
E. Stanley Kardatzke and KMI, dated as of April 17, 1998.
4(i) Waiver and Amendment by and among the Company and Institutional
Venture Partners VI Limited Partnership, IVP Founders Fund I,
Institutional Venture Management VI, and Frazier Healthcare II
L.P.(collectively, the "Investors"), dated as of April 17, 1998.
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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.
INTEGRATED MEDICAL RESOURCES, INC.
(Registrant)
April 27, 1998 /s/ Beverly O. Elving
__________________________________________________
Beverly O. Elving
Chief Financial Officer and Vice President,
Finance and Administration
(Authorized Officer and Principal Financial and
Accounting Officer)
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EXHIBIT INDEX
Exhibit
Number Description
4(h) Agreement to Postpone Time of Exercise by and among the Company,
E. Stanley Kardatzke and KMI, dated as of April 17, 1998.
4(i) Waiver and Amendment by and among the Company and Institutional
Venture Partners VI Limited Partnership, IVP Founders Fund I,
Institutional Venture Management VI, and Frazier Healthcare II
L.P. (collectively, the "Investors"), dated as of April 17, 1998.
EXHIBIT 4(h)
AGREEMENT TO POSTPONE TIME OF EXERCISE
THIS AGREEMENT (the "Agreement") is made and entered into as of the 17th day
of April, 1998, by and among Kardatzke Management, Inc., a Florida corporation
("KMI"), E. Stanley Kardatzke ("Kardatzke") and Integrated Medical Resources,
Inc., a Kansas corporation (the "Company").
WHEREAS, simultaneously with the execution of this Agreement, KMI plans to
convert a note dated March 5, 1998 in the amount of $1,600,000 issued by the
Company, and amended as of March 31, 1998 (the "Note"), into shares of Common
Stock of the Company; and
WHEREAS, the Note further grants KMI four options to purchase a total of
2,300,000 shares of Common Stock of the Company; and
WHEREAS, on March 31, 1998, KMI exercised one half of its initial option to
purchase shares of Common Stock of the Company pursuant to Section 6.6(a) of the
Note (the "Initial Note Option") by investing $500,000 in the Company in
exchange for 232,558 shares of Common Stock (the "First Initial Option Shares");
and
WHEREAS, simultaneously with the execution of this Agreement, KMI intends to
exercise the other half of such Initial Note Option by investing an additional
$500,000 in the Company in exchange for an additional 232,558 shares of Common
Stock (the "Second Initial Option Shares"); and
WHEREAS, simultaneously with the execution of this Agreement, KMI intends to
exercise a portion of its second option to purchase shares of Common Stock of
the Company pursuant to Section 6.6(b) of the Note (the "Second Note Option") by
investing an additional $275,000 in the Company in exchange for an additional
127,906 shares of Common Stock (the "Subsequent Option Shares"); and
WHEREAS, KMI has entered into a management consulting agreement by and between
the Company and KMI dated as of March 5, 1998 (the "Consulting Agreement"),
which Consulting Agreement grants KMI options to purchase 300,000 shares of the
Company's Common Stock (the "Consulting Option") pursuant to the terms of the
Consulting Agreement; and
WHEREAS, upon the conversion of the Note and the exercise of the entire
Initial Note Option by KMI, the Company may enter into an employment agreement
(the "Employment Agreement") with Kardatzke, pursuant to which the Company may
grant options to Kardatzke to purchase a total of up to 600,000 shares of the
Company's Common Stock, subject to the terms of the Employment Agreement; and
WHEREAS, other than the issuance of the First Initial Option Shares, the
Second Initial Option Shares, the Subsequent Option Shares and those shares to
be issued upon conversion of the Note, the parties hereto desire to postpone the
issuance of shares of the Company to KMI and Kardatzke until after stockholder
approval is received therefor.
NOW, THEREFORE, in consideration of the premises hereof, the mutual promises
made herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Subject to compliance by KMI and Kardatzke with Section 2 hereof, the
Company hereby waives the requirement of Section 6.3 of the Note that the
Note may not be converted until the Company has received stockholder
approval.
2 Other than exercising the First Initial Option Shares, the Second Initial
Option Shares, the Subsequent Option Shares and receiving the shares
issuable upon conversion of the Note, KMI and Kardatzke agree that they
shall not exercise any options, or portions thereof, to purchase shares of
the Company or cause the Company to issue any additional shares to them
until the stockholders of the Company consent thereto by approving proposal
2 and proposal 3 of the Company's proxy statement for the annual meeting of
stockholders expected to be held May 29, 1998.
3. KMI acknowledges that the First Initial Option Shares, the Second Initial
Option Shares, the Subsequent Option Shares and the shares issuable upon
conversion of the Note have not been listed with the Nasdaq Stock Market.
The Company will use its reasonable best efforts to list the First Initial
Option Shares, the Second Initial Option Shares, the Subsequent Option
Shares and the shares issuable upon conversion of the Note as soon as
practicable and to provide the Holder with a certificate representing such
shares from the Company's transfer agent, bearing the appropriate
restrictive legends.
4. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall be deemed to
constitute one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
KARDATZKE MANAGEMENT, INC.
By: /s/ E. Stanley Kardatzke
____________________________________________
Name: E. Stanley Kardatzke
Title Chairman and Chief Executive Officer
/s/ E. Stanley Kardatzke
___________________________________________
E. Stanley Kardatzke
Acknowledged and Agreed:
INTEGRATED MEDICAL RESOURCES, INC.
By: /s/ Troy A. Burns
__________________________________________
Name: Troy A. Burns
Title: Chief Executive Officer
EXHIBIT 4(i)
WAIVER AND AMENDMENT
This Waiver and Amendment is entered into by and among Institutional Venture
Partners VI Limited Partnership, IVP Founders Fund I, Institutional Venture
Management VI, and Frazier Healthcare II L.P. (collectively, the "Investors")
and Integrated Medical Resources, Inc. (the "Company") as of the 17th day of
April, 1998.
WHEREAS, each of the Investors currently holds a Convertible Subordinated
Promissory Note dated December 11, 1997 (collectively, the "Notes") issued by
the Company in the aggregate amount of $1,400,000 pursuant to a Note and Warrant
Agreement by and among the Investors and the Company dated as of December 11,
1997 and amended as of March 5, 1998 (the "Note Agreement"); and
WHEREAS, the outstanding principal balance of each of the Notes shall be
automatically converted upon the closing of the Company's next equity financing
(the "Next Financing") involving the receipt by the Company of, in the
aggregate, more than $2,600,000 (excluding amounts received on conversion of the
Notes), into the securities issued in the Next Financing (the "Securities"); and
WHEREAS, each of the Investors currently holds a Stock Purchase Warrant dated
December 11, 1997 (collectively, the "Warrants") which may be exercised for the
purchase of shares of Common Stock of the Company following the Next Financing;
and
WHEREAS, Kardatzke Management, Inc. ("KMI") plans make an equity investment in
the Company sufficient to constitute the Next Financing; and
WHEREAS, the Company and the Investors desire to postpone the issuance of
shares of the Company above those issued to KMI pursuant to the Next Financing
until after stockholder approval is received therefor.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Investors
hereby agree as follows:
1. The portions of Sections-3(a) and 3(b) of the Notes requiring that the
Notes automatically convert into securities of the Company upon the Next
Financing is hereby waived by the Investors, and such waiver is hereby
consented to by the Company, provided, however, that the Investors and the
Company agree that the Notes shall automatically convert into securities of
the Company pursuant to the terms of Sections 3(a) and 3(b) of the Notes
immediately following approval by the stockholders of Company of the
issuance of additional shares in connection with the Notes.
2. The Investors hereby waive the right to exercise the Warrants pursuant to
Section-2 of the Warrants, and such waiver is hereby consented to by the
Company, provided, however, that the Investors may exercise the Warrants
upon the approval by the Company's stockholders of the issuance of
additional shares in connection with the Warrants.
3. All other provisions of the Notes and Warrants remain in full force and
effect.
4. This Waiver and Amendment may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall be
deemed to constitute one instrument.
IN WITNESS WHEREOF, the Investors have exercised this waiver and amendment as
of the date first above written.
THE INVESTORS:
Institutional Venture Partners VI Limited Partnership
By Institutional Venture Management VI, its General
Partner
By: /s/ Samuel D. Colella
___________________________________________________
Samuel D. Colella
General Partner
IVP Founders Fund I
By Institutional Venture Management VI, its General
Partner
By: /s/ Samuel D. Colella
___________________________________________________
Samuel D. Colella
General Partner
Institutional Venture Management VI
By: /s/ Samuel D. Colella
___________________________________________________
Samuel D. Colella
General Partner
Frazier Healthcare II L.P.
By FHM II LLC, its
General Partner
By: /s/ Alan D. Frazier
___________________________________________________
Alan D. Frazier
General Partner
THE COMPANY:
Integrated Medical Resources, Inc.
By: /s/ Troy A. Burns
___________________________________________________
Troy A. Burns
Chief Executive Officer