press release from march 5th
Thursday March 5, 8:36 pm Eastern Time
Company Press Release
SOURCE: Integrated Medical Resources, Inc.
Integrated Medical Resources Announces $1.6 Million
Financing and Management Consulting Agreement with
Kardatzke Management, Inc. Including Provision for New
Chairman & CEO
LENEXA, Kan., March 5 /PRNewswire/ -- Integrated Medical Resources, Inc. (NASDAQ: IMRI
- news), manager of the leading national network of providers of treatment for impotence,
announced today that it has entered into a financing arrangement with the execution of a Note
Purchase Agreement and Management Consulting Agreement with Kardatzke Management, Inc.
(KMI). Also, upon providing additional equity financing under the terms of the agreement, Dr. E.
Stanley Kardatzke, founder and principal of KMI, has the option to become Chairman of the Board
of Directors and assume the title of Chief Executive Officer of the Company.
Terms of the Agreements
Pursuant to the terms of the Note Purchase Agreement, KMI has loaned the Company $1,600,000
at an interest rate of 8.5%. All payments of principal and interest under the Note are secured by a
second position in the Company's accounts receivable and certain fixed assets and are deferred until
September 1, 1998. The Note may be converted at the option of KMI into common stock of the
Company at the lower of $2.15 per share or the average market price for the 15 days prior to
conversion, at any time prior to maturity. If not converted or extended prior to September 1, 1998,
the Note shifts to an 18- month, fully amortizing term loan and is no longer convertible.
In addition, KMI has agreed to provide management consulting services to the Company to assist
the Company in the areas of receivables collection, third party reimbursement relationships and
strategic planning. The management consulting services end at the Company's option if the Note is
converted or shifts to a term loan. KMI will receive an option to purchase 300,000 shares of
common stock exercisable at $2.70 per share if certain performance criteria are met prior to April
15, 1999.
As a part of the financing transaction, KMI also has four options to purchase shares of common
stock at increasing share prices and with staggered exercise dates, which, when combined with the
conversion of the Note, aggregate 2,300,000 shares. The exercise of each option is dependent on
the exercise of the earlier options and the exercise of the first option is dependent on the conversion
of the Note.
Also, upon the conversion of the Note and the investment of an additional $1,000,000 through the
exercise of the initial option to purchase common stock, Dr. Kardatzke will have the option to join
the Company in the capacity of Chief Executive Officer and Chairman of the Board of Directors. In
the event that Dr. Kardatzke assumes these positions, he will have a three year employment
contract with the Company and receive options to purchase an aggregate of 600,000 shares of
common stock at a purchase price of $2.15 per share and vesting over four years.
The Company has a $1,400,000 loan outstanding from its two major outside investors that is due
May 1, 1998. These investors have agreed to convert this loan at the same per share price as the
conversion of the KMI loan in the event that KMI converts its loan and exercises its first option to
invest an additional $1,000,000 in shares of common stock.
IMR CEO Dr. Troy Burns Comments
Dr. Troy Burns, Chairman and Chief Executive Officer of IMR, stated: ''We are excited about Dr.
Kardatzke's involvement with IMR and look forward to him assuming a leadership role, based on
his outstanding track record as chairman and CEO of a large public company and his many years of
experience in running physician-related businesses. In the event that KMI chooses to provide an
additional $1 million in capital to IMR and Dr. Kardatzke assumes the roles of Chairman and Chief
Executive Officer, I intend to remain as a senior officer of the Company and focus more attention on
my role as Medical Director. This will allow me to actively communicate with other members of
senior management while helping enhance IMR's strong market position as the leading national
provider of treatment for impotence.''
Background on Dr. E. Stanley Kardatzke
E. Stanley Kardatzke, M.D., 59, is founder and principal of Kardatzke Management, Inc., a
financing lender and management consulting firm serving physician-related businesses exclusively,
based in Coral Gables, Florida. Previously, Dr. Kardatzke was founder, Chairman and Chief
Executive Officer of Physician Corporation of America, a comprehensive health care services
organization with 1.15 million health plan members and $1.5 billion in annual revenues. Prior to this,
he was Medical Director and Chairman of Health Care Plus of America, an HMO company in
Kansas and Oklahoma. Dr. Kardatzke holds a B.A. degree from Anderson College and a Doctor
of Medicine degree from Indiana University Medical School.
KMI's Dr. Kardatzke Comments
Dr. Kardatzke remarked: ''I am enthusiastic about IMR's market potential and prospects for
continued growth and look forward to directly participating in the management of that growth. The
Company's senior management is to be commended for taking a series of steps recently to position
the organization to achieve enhanced levels of operating efficiency with a streamlined infrastructure.
With further efforts, this should allow IMR to leverage additional revenue through expansion in
underserved regional markets and by offering innovative new treatments for impotence as these
become available to the Company's current or previous patients.''
IMR COO Scott Jenkins Comments
Scott Jenkins, President and Chief Operating Officer of IMR, said: ''We are confident that Dr.
Kardatzke's involvement should better enable us to enhance the Company's value to shareholders.
Impotence treatment represents a largely untapped $5 billion market and Dr. Kardatzke's proven
ability to effectively manage the growth of dynamic, physician-related businesses offers a valuable
resource to our Company. Furthermore, the KMI financing commitment should help IMR to further
solidify its presence in established markets as well as continue to address strong patient demand for
the latest impotence treatment services.''
About the Company
Integrated Medical Resources, Inc. provides complete management services to physicians who
offer comprehensive diagnostic, educational and treatment services designed to address the medical
and emotional needs of its patients and their partners through the largest network of medical clinics
in the U.S. dedicated to the diagnosis and treatment of impotence. The Company believes that this
market is largely underserved due to misconceptions about the causes of impotence, a general lack
of specialized knowledge by primary care physicians regarding treatment alternatives, and the
limited focus on impotence by medical specialists.
Cautionary Statement
This press release contains forward-looking statements of management expectations and initiatives
(within the meaning of the Private Securities Litigation Reform Act of 1995) which should be viewed
in the context of various factors that could affect actual results. Forward-looking statements are
subject to certain risks and uncertainties which could cause actual results to differ materially from
those anticipated in the forward-looking statements. You should review the Company's prospectus
dated November 6, 1996 and its annual report on Form 10-KSB filed with the Securities and
Exchange Commission for the year ended December 31, 1996 for important factors that might
cause such a difference. |
