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 21, 2005
SPO MEDICAL INC.
(Exact name of registrant as specified in its charter)
Delaware 0-11772 25-1411971
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
21860 Burbank Blvd., North Building, Suite 380, Woodland Hills, CA 91367
(Address of principal executive offices, including Zip Code)
818-888-4380
(Registrant's telephone number, including area code)
UNITED DIAGNOSTIC, INC.
124 West 60th Street, #33L, New York New York 10023
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
The information set forth under Item 2.01 of this current report on Form 8-K is
hereby incorporated by reference into this Item 1.01.
Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously described in the registrant's Current Report on Form 8-K filed on
March 2, 2005, effective February 28, 2005, SPO Medical Inc., a Delaware
corporation (the "Company"), formerly known as United Diagnostic, Inc., entered
into a Capital Stock Exchange Agreement (the "Exchange Agreement") among the
Company, SPO Medical Equipment Ltd., a company incorporated under the laws of
the State of Israel ("SPO Ltd."), and the shareholders of SPO Ltd., providing
for the acquisition by the Company of all of the issued and outstanding shares
of SPO Ltd. (the "Acquisition Transaction") in exchange for a specified number
of shares of the Company's common stock, par value $0.01 per share (the "Common
Stock"). On April 21, 2005, the Exchange Agreement was amended and restated (as
so amended and restated the "Restated Exchange Agreement").
The closing of the transactions contemplated in the Restated Exchange Agreement
and the acquisition by the Company of all of the issued and outstanding ordinary
shares of SPO Ltd. was completed on April 21, 2005. Pursuant to Restated
Exchange Agreement, the Company issued to the shareholders of SPO Ltd. an
aggregate of 5,769,106 shares of Common Stock, representing approximately 90% of
the Common Stock issued and outstanding on the date of this report (after giving
effect to the transactions contemplated by Restated Exchange Agreement). As a
result of the Acquisition Transaction, SPO Ltd. became a wholly owned subsidiary
of the Company as of April 21, 2005.
The foregoing description of the Acquisition Transaction and the Restated
Exchange Agreement does not purport to be complete and is qualified in its
entirety by reference to the Restated Exchange Agreement, which is attached
hereto as Exhibit 2.1, and incorporated herein by reference.
Upon consummation of the Acquisition Transaction, the Company effectuated a
forward subdivision of the Company's Common Stock issued and outstanding after
giving effect to the transactions contemplated by Restated Exchange Agreement on
a 2.65285:1 basis. The forward stock division is discussed in detail in Item
5.03. Following the forward stock subdivision, the Company has 17,053,621 shares
of Common Stock issued and outstanding and the former shareholders of SPO Ltd.
hold approximately 15,303,620 shares, representing 90% of the Company's issued
and outstanding stock. The amount of issued and outstanding shares of Common
Stock does not include 446,380 post-subdivision shares of Common Stock issuable
upon the exercise of penny warrants issued to Mr. Israel Sarussi, SPO Ltd.'s
Chief Technology Officer, further discussed in Item 5.01 below.
As the former shareholders of SPO Ltd. hold 90% of the Company's issued and
outstanding shares, and because the business of SPO Ltd. represents the only
business operations of the Company, the acquisition of SPO Ltd. is deemed to be
a reverse acquisition for accounting purposes. SPO Ltd., the acquired entity, is
regarded as the predecessor entity of the Company as of April 21, 2005.
The shares of Common Stock issued to the shareholders of SPO Ltd. pursuant to
the Restated Exchange Agreement will not be registered with the Securities
Exchange Commission or the securities commission of any United States state, and
were issued in reliance upon an exemption from registration under the Securities
Act of 1933, as amended.
Pursuant to the Restated Exchange Agreement, upon the consummation of the
Acquisition Transaction, a new board of directors for the Company was
constituted. These events are described in Item 5.02, which item is incorporated
herein by reference.
Upon the consummation of the Acquisition Transaction, the name of the Company
was changed to "SPO Medical Inc." and the certificate of incorporation and the
bylaws of the Company were each amended and restated in the forms as attached
hereto Exhibit 3.1 and Exhibit 3.2, respectively, which are incorporated herein
by reference.
About SPO Ltd.
SPO Ltd., was organized under the laws of the State of Israel in August 1995.
SPO Ltd. develops biosensor and microprocessor technologies using reflectance
pulse oximetry techniques for use in portable monitoring devices to capture
life-saving and life-enhancing information within four key markets: medical
care; home and remote-care; sports and wellness; and general security. SPO Ltd.
has developed and patented proprietary technology that enables the use of pulse
oximetry in a reflectance mode of operation i.e. a sensor that can be affixed to
a single side of a body part. This technique is known as Reflectance Pulse
Oximetry (RPO). Using RPO, a sensor can be positioned on various places of the
body, hence minimizing problems of motion and poor profusion. In addition, its
unique design results in substantially lower power requirements, which enable a
wireless configuration with expanded commercial possibilities.
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Certain relationships between the parties to the Acquisition Transaction
One of the directors of the Company and the acting Chief Executive Officer of
the Company, Michael Braunold, is an executive officer of SPO Ltd. and will
continue in such capacity following the Acquisition Transaction. The Company
anticipates that it will enter into an employment agreement with Mr. Braunold
pursuant to which he will be retained as the Company's Chief Executive Officer.
Mr. Braunold is currently the acting Chief Executive Officer of the Company.
Upon the consummation of the Acquisition Transaction, the Company entered into a
one year Consulting Agreement with Marvin Feigenbaum, a former director and
principal shareholder of the Company, under which Mr. Feigenbaum is to provide
certain consulting services to the Company. In consideration thereof, the
Company paid to Mr. Feigenbaum $100,000 at the closing of the Acquisition
Transaction. In addition, under the Consulting Agreement, the Company undertook
to (i) not consummate a reverse stock split without the prior written consent of
Mr. Feigenbaum, (ii) grant to Mr. Feigenbaum of piggyback registration rights
with respect to all of the Common Stock of the Company owned by Mr. Feigenbaum.
The foregoing description of the consulting agreement between the Company and
Mr. Feigenbaum does not purport to be complete and is qualified in its entirety
by reference to the Consulting Agreement with Mr. Feigenbaum, which is attached
hereto as Exhibit 10.1, and incorporated herein by reference.
The source of funds for the $100,000 cash payment to Mr. Feigenbaum are
comprised of the proceeds of the initial closing on the Private Placement
referred to in Item 3.02 below.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant;
The information set forth under Item 3.02 of this current report on Form 8-K is
hereby incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities
The information set forth under Item 2.01 of this current report on Form 8-K is
hereby incorporated by reference into this Item 3.02.
In order to facilitate the Acquisition Transaction referenced in Item 2.01 of
this report, which items are incorporated herein by reference, and to raise
working capital, on April 21, 2005, the Company commenced a private placement
(the "Private Placement") to certain private and institutional investors of up
to $1,150,000 by the sale of units of its securities, with each unit comprised
of (i) its 18 month 6% Promissory Note (the "Notes") and (ii) two year warrants
(the "Warrants") to purchase up to such number of shares of Common Stock of the
Company as are determined by principal amount of the Note being purchased by
such investor divided by $ 0.85, at a per share exercise price of $0.85. If
Notes with in the aggregate principal amount of $1,150,000 are issued, the
maximum number of shares of Common Stock issuable upon exercise of the Warrants
will be approximately 1,352,942 shares of Common Stock. Under the Private
Placement, subscription amounts are deposited into an escrow account.
On April 21, 2005, the Company conducted an initial closing on the Private
Placement for gross proceeds of $225,000. Thereafter, the Company can conduct
additional closings.
The foregoing description of the Private Placement does not purport to be
complete and is qualified in its entirety by reference to the copies of the
Subscription Agreement and form of Note and Warrant attached hereto as Exhibit
10.2, 10.3 and 10.4 respectively.
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Item 5.01 Changes in Control of Registrant.
The information set forth under Item 2.01 of this current report on Form 8-K is
hereby incorporated by reference into this Item 5.01.
Upon the close of the Acquisition Transaction on April 21, 2005 and following
the stock subdivision effected immediately thereafter, the former shareholders
of SPO Ltd. own 15,303,620 shares of the Company's Common Stock, representing
approximately 90% of the issued and outstanding shares of the Company. The
Company believes that the consummation of the Acquisition Transaction represents
a change of control of the Company.
To the best knowledge of the Company, in connection with the Acquisition
Transaction, Mr. Israel Sarussi, the Chief Technology Officer of SPO Ltd.,
received 1,402,124 shares of the Company's Common Stock in exchange for the
shares of SPO Ltd. that he held. In addition, Mr. Sarussi exchanged 90,978
currently exercisable warrants of SPO Ltd. for 168,275 currently exercisable
penny warrants of the Company at closing of the Acquisition Transaction. Post
forward stock subdivision (discussed in further detail in Item 5.03 below), Mr.
Sarussi holds shares of the Company's Common Stock, comprised of (i) 3,719,393
shares of Common Stock and (ii) 446,380 shares of Common Stock issuable upon
exercise of currently exercisable penny warrants, representing approximately
23.8% of the Company's issued and outstanding shares of Common Stock. Mr.
Sarussi is the only person known to the Company to hold beneficial ownership of
5% or more of the Company' issued and outstanding shares.
Following the closing of the Acquisition Transaction, all of the members of the
Board of Directors (the "Board") of the Company resigned and new directors were
appointed. The resignation of the existing directors and the appointment of new
directors is discussed in Item 5.02 below.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
The information set forth under Item 2.01 and Item 5.01 of this current report
on Form 8-K is hereby incorporated by reference into this Item 5.01.
Following the Acquisition Transaction, the initial board of directors of the
Company consists of three directors. All previous directors have resigned.
Set forth below is the name of each officer and director of the Company, the
principal positions and offices he or she holds with the Company, and a brief
description of that person's business experience during the past five (5) years:
Michael Braunold, Chief Executive Officer and Director
Since March 1998, Mr. Braunold has been Chief Executive Officer of SPO. Prior to
March 1998, Mr. Braunold was Senior Director of Business Development at Scitex
Corporation Ltd., a multinational corporation specializing in visual information
communication. In such capacity, Mr. Braunold played a strategic role in
managing a team of professionals assigned to M&A activities. During his 12-year
tenure at Scitex, he held various positions within the worldwide organization,
including a period in the United States as Vice President of an American
subsidiary of Scitex specializing in medical imaging. From March 2000 through
September 2000, Mr. Braunold was also the Chief Executive Officer and Chairman
of Ambient Corporation, a Delaware company, that specializes in the
implementation of a proposed comprehensive high-speed communication
infrastructure that is designed to utilize existing electrical power
distribution lines as a high-speed communication medium. Mr. Braunold served as
director of Amedia Networks, Inc. (formerly TTR Technologies, Inc.) from
February 2000 through August 2002. Mr. Braunold originates from the United
Kingdom. He obtained a Bachelor of Science degree with honors in Engineering and
Management Sciences from Imperial College Business School, London.
Pauline Dorfman, Director, Age 40
Since January 2001 Mrs. Dorfman, a qualified chartered accountant, has been a
consultant with Berenblut Consulting, an Ontario firm that assists commercial
business, law firms and governments across North America and Europe in several
areas covering economics, finance, accounting, valuation and strategy. Mrs.
Dorfman specializes in conducting analysis and financial investigations in
connection with international development disputes and economic damage
quantification for breach of contract and personal medical malpractice cases.
Prior to this assignment, Mrs. Dorfman worked for 10 years with the Toronto
Dominion Bank in the finance and commercial lending areas analyzing the
financial risk of various bank investments and strategies, assisting in the
development of new bank products and meeting the external and internal financial
reporting requirements of the bank.
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Sidney Braun, Director, Age 44
Since June 2004 Mr. Braun has served as the President and COO for Med-Emerg
International Inc. (MEII), a company incorporated in the Province of Ontario.
MEII is a publicly listed healthcare services company specializing in the
coordination and delivery of emergency and primary health care related services
in Canada such as physician and nurse staffing and recruitment, clinical
management services, a national drug infusion service and a comprehensive
physician practice management program. Mr. Braun has extensive experience in
commerce both in North America and Europe, including manufacturing, distribution
and trading. Prior to his current position at MEII, Mr. Braun worked for 7 years
as an independent consultant to several large state-owned corporations from the
former Eastern European block on developing business strategies and adapting to
new working conditions in western markets. In addition, Mr. Braun developed
expertise in emerging financial markets in Europe and introduced several
companies to the UK and German capital markets.
Family Relationships
There are no family relationships among any of the Company's directors and
officers or those proposed to be directors and officers.
Item 5.03 Amendments to Articles of Incorporation or Bylaws: Change in Fiscal
Year
Upon the consummation of the Acquisition Transaction, the Company changed its
name from "United Diagnostic, Inc." to "SPO Medical Inc." in order to provide a
new identity for the Company's new business. In connection with the name change,
the Company expects that its trading symbol on the pink sheets will also be
changed.
Additionally, upon the consummation of the Acquisition Transaction, the
Certificate of Incorporation and Bylaws of the Company were amended and restated
in the forms attached hereto as Exhibit 3.1 and Exhibit 3.2, respectively, which
are incorporated herein by this reference.
Upon the consummation of the Acquisition Transaction, the Company effectuated a
forward subdivision of the Company's Common Stock on a 2.65285:1 basis. The
forward stock subdivision was made to all stockholders of the Company
immediately after the Acquisition Transaction. The additional shares issued
pursuant to the forward stock sub-division are fully paid and non-assessable.
All new shares will have the same par value, voting rights and other rights as
old shares. The forward stock subdivision was effectuated by increasing the
number of issued and outstanding shares at the ratio of 2.65285:1. Accordingly,
as a result of the forward stock subdivision, the Company has 17,053,621 shares
outstanding and has approximately 32,499,999 authorized unissued shares of
Common Stock available for issuance. The Company also has 2,000,000 authorized
shares of preferred stock, none of which have been designated or are
outstanding. These shares may be issued in the future in connection with
acquisitions, subsequent financings or as determined by the Company's board of
directors.
Item 9.01. Financial Statements and Exhibits
(a) Financial statements of business acquired.
These financial statements will be provided as soon as they are available, but
within 60 days from the date of this Current Report.
(b) Pro forma financial information.
These financial statements will be provided as soon as they are available, but
within 60 days from the date of this Current Report.
(c) Exhibits:
2.1 Restated Capital Stock Exchange Agreement dated as of April 21, 2005 among
the Company, SPO Ltd. and the SPO Ltd. shareholders specified therein.
3.1 Amended and Restated Certificate of Incorporation of the Company.
3.2 Bylaws of the Company
10.1 Consulting Agreement dated as of April 21, 2005 between the Company and Mr.
Feigenbaum.
10.2 Form of subscription Agreement with certain investors.
10.3 Form of Promissory Note issued to certain investors.
10.4 Form of Warrant Instrument issued to certain investors.
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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.
Dated: April 27, 2005 SPO MEDICAL INC.
By: /s/ Michael Braunold
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Michael Braunold
Chief Executive Officer