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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) - OCTOBER 9, 2002
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, 2002, Opus Diagnostics, Inc. ("Opus"), a Delaware
corporation and wholly-owned subsidiary of Caprius, Inc., a Delaware
corporation ("Registrant"), sold the assets of its therapeutic drug
monitoring business (the "TDM Business") to Seradyn, Inc., a Delaware
corporation ("Seradyn"), pursuant to a Purchase and Sale Agreement (the
"Purchase Agreement") among Opus, Registrant and Seradyn. The purchase
price was $6,000,000, subject to adjustment on a dollar-for-dollar basis
to the extent the net asset value of the purchased assets as shown on a
post-closing pro forma asset statement is greater than $420,000 or less
than $380,000. $600,000 of the purchase price was deposited into an escrow
account to be held for indemnity claims, of which $300,000 would be
released after one year and the balance after two years, assuming no
indemnification claims are asserted by Seradyn. In addition, Opus is
required to provided certain specified transition services to Seradyn in
connection with the purchased assets. The Purchase Agreement is filed as
Exhibit 10.1 hereto and is incorporated herein by reference.
Opus' TDM Business was engaged in the development, distribution and sale
of diagnostic assays, controls and calibrators. Opus had sold its products
in kit form. Seradyn had been a contract manufacturer of the Opus TDM
Business kits. Pursuant to a Consulting Agreement, Opus will consult with
Seradyn on the ongoing projects for a $50,000 annual fee for a two year
period. The purchased assets included three diagnostic assays still in
development. Pursuant to a Royalty Agreement, Opus will receive royalty
payments upon the commercialization of any of these assays based upon
varying percentages of net sales.
Registrant, Opus and its three executive officers entered into Noncompete
Agreements with Seradyn restricting them for five years from competing in
the TDM Business.
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.
The following unaudited pro forma condensed consolidated financial
statements are filed with this report:
Pro forma Condensed Consolidated Balance Sheet
at June 30, 2002 F-1
Pro forma Condensed Consolidated Statements of Operations
Year Ended September 30, 2001 F-2
Nine Months Ended June 30, 2002 F-3
2
The pro forma condensed consolidated balance sheet of the Registrant as of
June 30, 2002, reflects the financial position of the 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, 2002. The pro forma condensed consolidated statements of
operations for the fiscal year ended September 30, 2001, and the nine
months ended June 30, 2002, assume that the disposition occurred on
October 1, 2000, and are based on the operations of the Registrant for the
year ended September 30, 2001 and the nine months ended June 30, 2002.
The unaudited pro forma condensed consolidated financial statements have
been prepared by the 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 the Registrant's historical financial
statements and related notes.
(c) Exhibits.
10.1 Purchase and Sale Agreement, among Opus, Registrant and Seradyn,
dated as of October 9, 2002.
10.2 Royalty Agreement between Opus and Seradyn dated as of October 9,
2002.
10.3 Noncompete Agreement between Opus and Seradyn dated as of
October 9, 2002.
10.4 Consulting Agreement between Seradyn and Opus, dated as of
October 9, 2002.
99.1 Press Release, dated October 9, 2002.
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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 thereunto duly authorized.
CAPRIUS, INC.
By: /s/ George Aaron
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Name: George Aaron
Title: President
Dated: October 24, 2002
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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10.1 Purchase and Sale Agreement among Opus, Registrant and Seradyn,
dated as of October 9, 2002.
10.2 Royalty Agreement between Opus and Seradyn dated as of October 9,
2002.
10.3 Noncompete Agreement between Opus and Seradyn dated as of
October 9, 2002.
10.4 Services Agreement between Opus and Seradyn dated as of
October 9, 2002.
99.1 Press Release, dated October 9, 2002.
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PRO FORMA FINANCIAL INFORMATION
CAPRIUS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 2002
(UNAUDITED)
Pro Forma Adjustments
Historical Opus (a) Other Pro Forma
ASSETS ----------- ----------- ----------- -------------
CURRENT ASSETS:
Cash and cash equivalents $ 149,314 $ - $ 5,400,000 (b) $ 5,549,314
Accounts receivable, net of reserve for bad debts 474,463 316,984 600,000 (b) 757,479
Inventories 313,373 313,373 - -
Other current assets 2,542 - - 2,542
Note receivable 245,000 - - 245,000
----------- ----------- ----------- -------------
Total current assets 1,184,692 630,357 6,000,000 6,554,335
----------- ----------- ----------- -------------
PROPERTY AND EQUIPMENT:
Medical equipment 341,140 - - 341,140
Office furniture and equipment 220,290 26,821 - 193,469
Leasehold improvements 950 - - 950
----------- ----------- ----------- -------------
562,380 26,821 - 535,559
Less: accumulated depreciation 481,487 15,818 - 465,669
----------- ----------- ----------- -------------
Net property and equipment 80,893 11,003 - 69,890
----------- ----------- ----------- -------------
OTHER ASSETS:
Deferred acquisition costs 106,395 - - 106,395
Goodwill, net of accumulated amortization 866,841 790,500 - 76,341
Other intangibles, net of accumulated amortization 1,241,317 1,241,317 - -
Other 22,794 - - 22,794
----------- ----------- ----------- -------------
Total other assets 2,237,347 2,031,817 - 205,530
----------- ----------- ----------- -------------
TOTAL ASSETS $ 3,502,932 $ 2,673,177 $ 6,000,000 $ 6,829,755
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 550,000 $ - $ - $ 550,000
Accounts payable 269,876 33,238 - 236,638
Accrued expenses 274,388 43,000 375,000 (c) 606,388
Accrued compensation 85,560 - - 85,560
Current maturities of long-term debt and capital
lease obligations 12,107 - - 12,107
----------- ----------- ----------- -------------
Total current liabilities 1,191,931 76,238 375,000 1,490,693
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
net of current maturities 25,702 - - 25,702
----------- ----------- ----------- -------------
TOTAL LIABILITIES 1,217,633 76,238 375,000 1,516,395
----------- ----------- ----------- -------------
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, 2002
Liquidation preference $2,700,000 2,700,000 - - 2,700,000
Common stock, $.01 par value
Authorized - 50,000,000 shares
Issued - 17,121,362 shares at June 30, 2002 171,214 - - 171,214
Additional paid-in capital 67,154,517 - - 67,154,517
Accumulated deficit (67,738,182) 2,596,939 5,625,000 (b)(c) (64,710,121)
Treasury stock (22,500 common shares, at cost) (2,250) - - (2,250)
----------- ----------- ----------- -------------
Total stockholders' equity 2,285,299 2,596,939 5,625,000 5,313,360
----------- ----------- ----------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,502,932 $ 2,673,177 $ 6,000,000 $ 6,829,755
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(a) To eliminate the assets and liabilities included in the balance sheet of the Company's
Opus Diagnostics business as of June 30, 2002.
(b) To reflect the exchange of the cash for the net assets of Opus Diagnostics, of which 10%
is held in escrow.
(c) To reflect transaction costs and liabilities incurred by the Company from the sale of
Opus Diagnostics.
F-1
PRO FORMA FINANCIAL INFORMATION
CAPRIUS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2001
(UNAUDITED)
Pro Forma Adjustments
Historical Opus (a) Other Pro Forma
----------- ----------- ----------- ------------
REVENUES:
Net patient service revenues $ 1,502,602 $ - $ - $ 1,502,602
Net product sales 2,043,488 2,043,488 - -
----------- ----------- ----------- ------------
Total revenues 3,546,090 2,043,488 - 1,502,602
----------- ----------- ----------- ------------
OPERATING EXPENSES:
Cost of service operations 1,077,230 - - 1,077,230
Cost of product sales 714,734 714,734 - -
Selling, general and administrative 1,821,624 145,730 (b) - 1,675,894
Goodwill impairment 500,000 - - 500,000
Research and development 186,894 186,894 - -
Provision for bad debt and collection costs 23,523 - - 23,523
----------- ----------- ----------- ------------
Total operating expenses 4,324,005 1,047,358 - 3,276,647
----------- ----------- ----------- ------------
Operating income (loss) (777,915) 996,130 - (1,774,045)
Interest income 4,436 - - 4,436
Interest expense (45,108) - - (45,108)
----------- ----------- ----------- ------------
Net income (loss) $ (818,587) $ 996,130 $ - $ (1,814,717)
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Net loss per basic and diluted common share $ (0.05) $ - $ - $ (0.11)
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Weighted average number of common shares outstanding,
basic and diluted 17,054,092 - - 17,054,092
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(a) To eliminate the operations of Opus Diagnostics for the entire period.
(b) This amount includes expenses related only to Opus Diagnostics. It
does not include an allocation of corporate overhead expenses and
non assumed expenses of Opus Diagnostics.
F-2
PRO FORMA FINANCIAL INFORMATION
CAPRIUS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 2002
(UNAUDITED)
Pro Forma Adjustments
Historical Opus (a) Other Pro Forma
----------- ----------- ----------- -----------
REVENUES:
Net patient service revenues $ 1,231,066 $ - $ - $ 1,231,066
Net product sales 1,590,880 1,590,880 - -
----------- ----------- ----------- -----------
Total revenues 2,821,946 1,590,880 - 1,231,066
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Cost of service operations 855,515 - - 855,515
Cost of product sales 423,555 423,555 - -
Selling, general and administrative 1,533,118 122,649 (b) - 1,410,469
Research and development 118,826 118,826 - -
Provision for bad debt and collection costs 50,396 - - 50,396
----------- ----------- ----------- -----------
Total operating expenses 2,981,410 665,030 - 2,316,380
----------- ----------- ----------- -----------
Operating income (loss) (159,464) 925,850 - (1,085,314)
Interest income 1,947 - - 1,947
Interest expense (39,546) - - (39,546)
----------- ----------- ----------- -----------
Net income (loss) $ (197,063) $ 925,850 $ - $(1,122,913)
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Net loss per basic and diluted common share $ (0.01) $ - $ - $ (0.07)
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Weighted average number of common shares outstanding,
basic and diluted 17,098,862 - - 17,098,862
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(a) To eliminate the operations of Opus Diagnostics for the entire period.
(b) This amount includes expenses related only to Opus Diagnostics. It
does not include an allocation of corporate overhead expenses and
non assumed expenses of Opus Diagnostics.
F-3