CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Event Requiring Report: December 9, 1998
NUGGET EXPLORATION, INC.
Nevada 0-10201 83-0250943
(State of (Commission (IRS Employer
Incorporation) File Number) Identification #)
815 South Durbin Street, Casper, Wyoming 82601
(Address of Principal Executive Offices)
# (307) 234-2895
(Registrant's telephone number, including area code)
ITEM 1. Changes in Control of Registrant
See Item 2 below.
ITEM 2. Acquisition or Disposition of Assets
On December 9, 1998, the Company executed a Purchase and Sale Agreement
(the "Purchase Agreement") with Imaging Management Associates, Inc. ("Imaging
Management"), a Colorado corporation engaged in the business of operating
diagnostic imaging centers. Pursuant to the Purchase Agreement, the Company
is acquiring two diagnostic imaging centers, one located in Wilmington,
Delaware, and the other located in Cherry Hill, New Jersey (the "Imaging
Centers"). The transaction was structured as an asset purchase whereby the
Company is acquiring all the assets comprising the Imaging Centers and
assuming certain liabilities as described in the Purchase Agreement.
According to management of the Imaging Centers, the Imaging Centers were
founded in 1990, and are both approximately 1,500 square feet in size. Alan
Wasserman, M.D. will serve as Medical director of the Delaware Center. Dr.
Wasserman is a graduate of the University of Bologna School of Medicine in
Italy and has practiced radiology for over twenty years. Dr. Jack Dooley,
M.D., who is a graduate of the University of Guadalajara School of Medicine in
Mexico, will serve as Medical director of the Cherry Hill Center. The Centers
employ a combined total of 12.
In exchange for the assets comprising the Centers, the Company will
issue Imaging Management 1,250,000 shares of the Company's common stock, $.01
par value. In connection with its acquisition of the Centers, the Company has
entered into an Employment Agreement with Dr. Leonard Vernon, the President
and controlling shareholder of Imaging Management. Pursuant to the Employment
Agreement, Dr. Vernon will serve as President of the Company for a term
beginning in December 1998 and ending December 31, 2002. Dr. Vernon will
receive compensation of $200,000 per year until December 31,1999 and $300,000
per year from January 1, 2000 until December 31, 2002. Dr. Vernon will also
receive an annual cash bonus equal to 1.5% of the amount of the Company's post
tax profits over $1,000,000 subject to certain conditions and a car allowance
of $500 per month.
The Company also granted Dr. Vernon an option to purchase 3,000,000
shares of the Company's common stock, $.01 par value, at a price of $.155 per
share. Dr. Vernon has exercised the option and paid the purchase price of
$465,000 through issuance of his promissory note for the entire purchase price
(the "Note"). The Note will bear interest at a rate of 6% per annum, with
interest being payable on a quarterly basis, beginning March 31, 1999. The
principal amount of the Note will be due in one payment on December 31, 2002.
The Note is a non-recourse Note secured by the 3,000,000 shares of the
Company's Common Stock being acquired by Dr. Vernon. Provided that Dr. Vernon
is not in default of his obligations under the Note, Dr. Vernon will have full
voting rights to the 3,000,000 acquired. The 3,000,000 Shares to be received
by Dr. Vernon represent approximately 61% the Company's issued and outstanding
Common Stock and accordingly, Dr. Vernon now controls the Company. In
addition to the 3,000,000 shares of the Company's common stock issued to Dr.
Vernon pursuant to his Employment Agreement, as a shareholder or Imaging
Management Dr. Vernon will receive his proportionate share of the Company's
common stock issued to Imaging Management pursuant to the Purchase Agreement.
The commencement of Dr. Vernon's employment begins upon completion of
the acquisition of the Imaging Centers by the Company. The 3,000,000 shares to
be issued under the Employment Agreement and the 1,250,000 shares to be issued
under the Purchase and Sale Agreement have been authorized and issued by the
Company's board of directors and are being held by the Company's board subject
to certain conditions. Under the terms of the Purchase and Sale Agreement,
the release of the shares is subject to review of the audited financial
statements of the Imaging Centers by the Company and a shareholder, Park
Street Investments, Inc. While the Company has every reason to believe there
will be no irregularities with such audited financial statements, there are no
assurances that they will be to the satisfaction of the Company's board of
directors or Park Street. To the extent that the audited financial statements
of the Imaging Centers are not to the satisfaction of the Company's board of
directors, the Employment Agreement and the Purchase and Sale Agreement,
including the amount and payment of the consideration, could be modified or
potentially rescinded.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
Financial Statement of Businesses Acquired. Within 60 days of the date
of this Report, the Company will file an amendment to this Report containing
the balance sheets for the Imaging Centers as of December 31, 1997 and 1998,
together with the Imaging Centers' statements of income and cash flow for the
periods then ended.
Pro Forma Financial Information. Within 60 days of the date of this
Report, the Company will file an amendment to this Report containing the pro
forma financial information required under Article 11 of Regulation S-X.
c. Exhibits. The foregoing exhibits are attached to this report on
Form 8-K.
Exhibit No. Description
10(a) Purchase and Sale Agreement dated December 9,
1998 between the Company and Imaging Management
Associates, Inc.
10(b) Employment Agreement dated December 9, 1998
between Company and Dr. Leonard Vernon.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NUGGET EXPLORATION, INC.
/s/ Tyson Schiff
December 22, 1998 By: --------------------------
Tyson Schiff, President