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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) - SEPTEMBER 30, 2003
CAPRIUS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-11914 22-2457487
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
ONE PARKER PLAZA, FORT LEE, NEW JERSEY 07024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE - (201) 592-8838
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 9, 2003, Caprius, Inc., a Delaware corporation
("Registrant"), completed the closing of the sale of Strax Institute,
Inc. (the "Strax Business"), its comprehensive breast imaging
business, to Eastern Medical Technologies, Inc., a Delaware
corporation ("EMT"), pursuant to a Stock Purchase Agreement dated
September 30, 2003 (the "Purchase Agreement") among Registrant, EMT
and the other parties thereto. The sale was effective as of
September 30, 2003. The purchase price was $400,000, subject to
adjustment based upon the amount of the accounts payable and accounts
receivable as of the date of closing. 50% of the purchase price, which
had been held in escrow, was paid on closing and the balance is
payable in installments commencing January 1, 2004 and ending
December 31, 2004, evidenced by a note secured by the accounts
receivables of Strax Institute, Inc. In addition, Registrant is
required to provided certain specified transitional services for up to
180 days pursuant to a Management Services Agreement. For further
information regarding the transaction, see the Stock Purchase
Agreement, the Non-negotiable Promissory Note and the Management
Services Agreement which are filed as exhibits to this report and are
incorporated herein by reference.
The Strax Business was a multi-modality breast care center
performing approximately 20,000 procedures annually comprising of
x-ray mammography, ultrasound, stereotactic biopsy and bone
densitometry.
In addition, included as part of the Stock Purchase Agreement,
Registrant and two of its executive officers are restricted for a
period of five years from competing in the mammography and bone
densitometry business in the States of Florida and New Jersey.
As part of the Strax transaction, the Registrant and George Aaron
settled and terminated the pending BDC Corp. litigation, as disclosed
in Registrant's Form 10-QSB for the quarterly period ended June 30,
2003 (refer to Part II, Item 1 for full explanation). The purchaser of
Strax is an entity controlled by the same person who is a principal in
BDC. The amounts payable in settlement of this litigation are to be
offset against the purchase price under the Purchase Agreement. For
further information see the Settlement Letter which is filed as an
exhibit to the report and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
The following financial statements and exhibits are filed herewith:
a. Financial Statements of business acquired (not applicable).
b. Pro forma financial information for the Registrant.
The following unaudited pro forma condensed consolidated financial
statements are filed with this report:
Pro forma Condensed Consolidated Balance Sheet
at June 30, 2003 F-1
Pro forma Condensed Consolidated Statements of Operations.
2
Year Ended September 30, 2002 F-2
Nine Months Ended June 30, 2003 F-3
The pro forma condensed consolidated balance sheet of Registrant as of
June 30, 2003 reflects the financial position of Registrant after giving
effect to the disposition of the assets and assumption of the liabilities
discussed in Item 2 and assumes the disposition took place on June 30,
2003. The pro forma condensed consolidated statements of operations for the
fiscal year ended September 30, 2002, and the nine months ended June 30,
2003, assume that the disposition occurred on September 30, 2001, and are
based on the operations of Registrant for the year ended September 30, 2002
and the nine months ended June 30, 2003.
The unaudited pro forma condensed consolidated financial statements
have been prepared by Registrant based upon assumptions deemed proper by
it. The unaudited pro forma condensed consolidated financial statements are
not necessarily indicative of the future financial position or results of
operations or actual results that would have occurred had the transaction
been in effect as of the dates presented.
The unaudited pro forma condensed consolidated financial statements
should be read in conjunction with Registrant's historical financial
statements and related notes.
c. Exhibits
10.1 Stock Purchase Agreement, among Registrant, Strax Institute Inc. and
Eastern Medical Technologies, Inc. ("EMT"), dated as of September 30,
2003.
10.2 Non-negotiable Promissory Note of EMT to Registrant, dated
September 30, 2003.
10.3 Security Agreement among EMT, Strax Institute, Inc., and
Registrant, dated as of September 30, 2003.
10.4 Management Services Agreement between Registrant and Strax Institute
Inc., dated as of September 30, 2003.
10.5 Settlement Letter among BDC Corp. d/b/a BDC Consulting Corp.,
Registrant and George Aaron, dated as of September 30, 2003.
99.1 Press Release, dated October 9, 2003.
3
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.
CAPRIUS, INC.
By: /s/ George Aaron
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Name: George Aaron
Title: President
Dated: October 15, 2003
4
At June 30, 2003
PRO FORMA FINANCIAL INFORMATION
CAPRIUS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 2003
(UNAUDITED)
Pro Forma Adjustments
Historical Strax (a) Other Pro Forma
---------------- ---------------- ----------------- -----------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (including $303,660
of restricted funds held in escrow at
June 30, 2003) $ 1,660,502 $ 32,894 $ 137,486 (b) $ 1,765,094
Accounts receivable, net of reserve for
bad debts of $19,000 at June 30, 2003 397,624 228,335 70,000 (c) 239,289
Inventories 532,300 - - 532,300
Note receivable short term - - 113,986 (d) 113,986
Other current assets 122,745 19,612 - 103,133
---------------- ---------------- ----------------- -----------------
Total current assets 2,713,171 280,841 321,472 2,753,802
---------------- ---------------- ----------------- -----------------
PROPERTY AND EQUIPMENT:
Medical equipment 314,318 314,318 - -
Office furniture and equipment 517,641 196,594 - 321,047
Leasehold improvements 18,373 950 - 17,423
---------------- ---------------- ----------------- -----------------
850,332 511,862 - 338,470
Less: accumulated depreciation 634,598 480,761 153,837
---------------- ---------------- ----------------- -----------------
Net property and equipment 215,734 31,101 - 184,633
---------------- ---------------- ----------------- -----------------
OTHER ASSETS:
Note receivable long term - - 41,500 (d) 41,500
Deferred financing costs 18,340 - - 18,340
Goodwill, net of accumulated amortization 737,010 - - 737,010
Other intangibles, net of accumulated
amortization 960,000 - - 960,000
Other 322,794 - - 322,794
---------------- ---------------- ----------------- -----------------
Total other assets 2,038,144 - 41,500 2,079,644
-
---------------- ---------------- ----------------- -----------------
TOTAL ASSETS $ 4,967,049 $ 311,942 $ 362,972 $ 5,018,079
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,258,335 $ 62,522 $ - $ 1,195,813
Accrued expenses 696,988 - 50,000 (e) 746,988
Accrued compensation 201,947 57,608 - 144,339
Current maturities of long-term debt
and capital lease obligations 15,156 15,156 - -
---------------- ---------------- ----------------- -----------------
Total current liabilities 2,172,426 135,286 50,000 2,087,140
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
net of current maturities 19,269 19,269 - -
---------------- ---------------- ----------------- -----------------
TOTAL LIABILITIES 2,191,695 154,555 50,000 2,087,140
---------------- ---------------- ----------------- -----------------
MINORITY INTEREST IN MCM 116,435 - - 116,435
---------------- ---------------- ----------------- -----------------
COMMITMENTS AND CONTINGENCIES - - - -
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value
Authorized - 1,000,000 shares
Issued and outstanding - Series A, none;
Series B, convertible, 27,000 shares
at June 30, 2003
Liquidation preference $2,700,000 2,700,000 - - 2,700,000
Common stock, $.01 par value
Authorized - 50,000,000 shares
Issued - 20,419,062 shares at June 30, 2003 204,191 - - 204,191
Additional paid-in capital 67,579,258 - - 67,579,258
Accumulated deficit (67,822,280) 157,387 312,972 (b) (c) (67,666,695)
Treasury stock (22,500 common shares,
at cost) (2,250) - - (d) (e) (2,250)
---------------- ---------------- ----------------- -----------------
Total stockholders' equity 2,658,919 157,387 312,972 2,814,504
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,967,049 $ 311,942 $ 362,972 $ 5,018,079
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(a) To eliminate the assets and liabilities included in the balance sheet
of the Company's Strax Institute business as of June 30, 2003.
(b) To reflect the initial 50% exchange of cash for the net assets of the
Strax Institute.
(c) To reflect net receivables to be collected from the sale of the Strax
Institute.
(d) To reflect the remaining 50% exchange of cash for the net assets of
the Strax Institute
(e) To reflect transaction costs and liabilities incurred by the Company
from the sale of the Strax Institute.
F-1
PRO FORMA FINANCIAL INFORMATION
CAPRIUS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2002
(Unaudited)
Pro Forma Adjustments
Historical Strax (a) Other Pro Forma
---------------- -------------- -------------- ----------------
REVENUES:
Net patient service revenues $ 1,549,794 $ 1,549,794 $ - $ -
---------------- -------------- -------------- ----------------
Total revenues 1,549,794 1,549,794 - -
---------------- -------------- -------------- ----------------
OPERATING EXPENSES:
Cost of operations 1,169,491 1,169,491 - -
Selling, general and administrative 498,030 498,030 1,576,985 (b) 1,576,985
Goodwill impairment 67,356 67,356 - -
Provision for bad debt and collection costs 66,638 66,638 - -
---------------- -------------- -------------- ----------------
Total operating expenses 1,801,515 1,801,515 1,576,985 1,576,985
---------------- -------------- -------------- ----------------
Operating loss (251,721) (251,721) (1,576,985) (1,576,985)
Interest expense (10,619) (10,619) - -
---------------- -------------- -------------- ----------------
Loss from continuing operations $ (262,340) $ (262,340) $ (1,576,985) $ (1,576,985)
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Net loss per basic and diluted common share:
Continuing operations $ (0.02) $ - $ - $ (0.09)
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Weighted average number of common shares
outstanding, basic and diluted 17,171,140 - - 17,171,140
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(a) To eliminate the operations of the Strax Institute for the entire
period.
(b) Reclassification of selling, general and administrative expenses
previously reflected in discontinued operations.
F-2
PRO FORMA FINANCIAL INFORMATION
CAPRIUS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 2003
(Unaudited)
Pro Forma Adjustments
Historical Strax (a) Other Pro Forma
------------------ ---------------- ---------------- ------------------
REVENUES:
Net patient service revenues $ 1,162,896 $ 1,162,896 $ - $ -
Product sales and rental revenues 440,018 - - 440,018
Consulting income 37,500 - - 37,500
------------------ ---------------- ---------------- ------------------
Total revenues 1,640,414 1,162,896 - 477,518
------------------ ---------------- ---------------- ------------------
OPERATING EXPENSES:
Cost of patient service revenues 643,200 643,200 - -
Cost of product sales and rental revenue 381,645 - - 381,645
Research and development 135,051 - - 135,051
Selling, general and administrative 3,856,429 559,941 - 3,296,488
Provision for bad debt and collection costs 36,262 36,262 - -
------------------ ---------------- ---------------- ------------------
------------------ ---------------- ---------------- ------------------
Total operating expenses 5,052,587 1,239,403 - 3,813,184
------------------ ---------------- ---------------- ------------------
Operating loss (3,412,173) (76,507) - (3,335,666)
Interest expense (7,353) (5,439) - (1,914)
------------------ ---------------- ---------------- ------------------
Loss from continuing operations $(3,419,526) $ (81,946) $ - $ (3,337,580)
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Net loss per basic and diluted common share
Continuing operations $ (0.17) $ - $ - $ (0.16)
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Weighted average number of common shares outstanding,
basic and diluted 20,396,562 - - 20,396,562
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(a) To eliminate the operations of the Strax Institute for the entire
period.
F-3