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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 reported): August 21, 2002
LIFEN, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-31152 76-0585701
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
444 Madison Avenue, Suite 2904, New York, NY 10022
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(Address of Principal Executive Offices) (Zip Code)
(212) 750-7878
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, If Changed since Last Report)
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Item 5. Other Events.
On August 15, 2002, Lifen, Inc., (the "Registrant" or the "Company") and
stockholders owning a majority of the issued and outstanding shares of the
Company closed the sale of 2,000,000 shares of the Company's Common Stock
pursuant to a Common Stock Purchase Agreement (the "Agreement") executed
effective May 15, 2002 by the Company, James D. Durham and Malahide Investments
(individually, an "Investor" and collectively, the "Investors") for aggregate
proceeds of $100,000. This number of shares equals 20% (including these shares)
of the fully diluted number of issued and outstanding shares of the Registrant's
Common Stock.
As a condition to the closing of the transaction referenced above, the
Company raised $402,000 in cash for working capital purposes, which it
accomplished by consummating a private placement of 574,286 shares of its Common
Stock at a price of $0.70 per share, for aggregate proceeds of $402,000.
James D. Durham has become the Chairman and CEO of the Company. Mr. Durham
has over 30 years of experience in the creation and management of information
technology companies.
Subject to the terms and conditions of the Agreement, during the one year
period beginning on the closing date of the Company's first acquisition, each
Investor shall also have the right to purchase at a purchase price of $0.0001
per share, additional shares of Common Stock based upon the number of additional
shares of Common Stock and other securities convertible into Common Stock issued
in connection with any Acquisition (as defined in the Agreement).
Prior to the closing, the Registrant adopted a Restated Certificate of
Incorporation and adopted Restated Bylaws. The principal changes effected by
this Restated Certificate of Incorporation were:
1. The number of Common Shares authorized shares was increased from
25,000,000 shares to 50,000,000 shares.
2. The Board was re-classified into three classes of directors, with the
first such class holding office until the first annual meeting of
stockholders; the second class holding office until the second annual
meeting of stockholders; and the third class holding office until the
third annual meeting of stockholders. Each class of directors will be
elected for a three-year term.
New Business Direction
The Company has decided to change its business direction and intends to
devote its efforts to providing professional services and expertise in health
disciplines that are highly skilled and in short supply. The Company intends to
initially focus on temporary staffing services for allied healthcare workers and
professional billing services for physicians and hospitals. It will do so
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primarily by providing a structure to consolidate existing small companies that
offer such services but are limited in their ability to grow, attract capital
and acquire technology. The Company intends to provide a platform for select
companies to consolidate and create sufficient critical mass to provide access
to capital and professional management, build a common technology backbone, open
new markets, and reinvest in professional staff to create a larger revenue
opportunity. It intends to do so initially through acquisitions and then
integration using technology for expense and operating synergy.
Effective at the closing, Registrant's officers and directors resigned and
new officers and directors were duly appointed. These persons, together with a
brief biographical summary for each, are as follows:
James D. Durham, Director and Chief Executive Officer
In 1999, Mr. Durham co-founded Market Insite Group, Inc., which offers an
exclusive web-based scoring and correlation algorithm to match business with
their customers. Mr. Durham also founded ChartOne, Inc. to offer web-based
storage and retrieval capabilities for medical records, which has over 1,000
hospital customers. In 1993, Mr. Durham founded QuadraMed Corporation, a public
company, which offers a suite of software products and services focused on the
financial and clinical needs of hospitals. In 1986, in a turn-around situation,
Mr. Durham became CEO of Knowledge Data Systems, which was then in bankruptcy,
and restructured the company, which returned to profitability and later was sold
to Ameritech.
From 1971 to 1979, Mr. Durham served in a variety of positions at Medicus
Corporation, and became president and chief financial officer of a subsidiary of
the company. During this period, Mr. Durham founded the first company in the
healthcare industry to use personal computers, which later became a public
company as Medicus Systems Corporation.
Mr. Durham has a bachelor's degree in industrial engineering from the
University of Florida, graduating with high honors, and has a masters degree in
business administration from UCLA. He is a certified public accountant,
licensed in Illinois.
F. Scott Gross, Director
Mr. Gross has served as the Chairman of Primus Management, Inc., a company
he founded, which provides services to acute care hospitals and physician
clinics. Prior to that he served as the Chief Executive Officer of Carondolet
Rehabilitation Centers of America and was responsible for leading its turnaround
and ultimate sale. Between 1984 and 1987 Mr. Gross served as President and Chief
Executive Officer of the Hospital Division of National Medical Enterprises
("NME"). In this position he was responsible for 65 acute care hospitals,
11 rehabilitation hospitals, 34 ambulatory and primary care clinics, and three
HMO/PPO plans in three states with over $1.5 billion in annual revenue. During
his 12-year tenure at NME, Mr. Gross led the acquisition of numerous hospitals,
home health agencies, durable medical equipment companies, oxygen service
companies, and physical therapy and respiratory therapy temporary staffing
agencies. Mr. Gross serves on the Board of Directors of QuadraMed Corporation,
Willitts Design, a collectible and gift manufacturer and distributor, and
Fountain View, a nursing home chain.
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Mr. Gross has a Masters Degree in Public Administration from the University
of Southern California, and a Bachelor of Science Degree from California State
University.
Robert J. Kenneth, Director
Mr. Kenneth has been active in the healthcare industry for 34 years. He is
the founder of Kenneth Associates, a leading provider of staffing and
professional services to hospitals and physicians in California, focused on on-
site billing staff and management as well as off-site billing services with a
goal of reducing accounts receivable. Mr. Kenneth has also served on the Board
of Trustees of St. Francis Memorial Hospital where he was a member of the
investment committee, chairman of the budget and finance committee and chairman
of the retirement and personnel committee. Mr. Kenneth also serves on the board
of overseers for the University of California School of Nursing. Mr. Kenneth is
also a director of Nurses Network Inc., a San Francisco based nurse staffing
agency. Mr. Kenneth is also a member of the Healthcare Financial Management
Association, the American Guild of Patient Accounts Managers, and is the author
of numerous articles and publications. He is a regular speaker for healthcare
professional organizations and has served as an expert witness before the U.S.
House of Representatives Ways and Means Committee.
Mr. Kenneth earned his Bachelors Degree in Business Administration from
Roosevelt University in Chicago and a Masters Degree in Business Administration
from Golden Gate University.
Robert P. Oliver, Director
Mr. Oliver, is presently the Chief Executive Officer of CorDev Financial,
Inc., a privately held company specializing in growth-oriented CEO consulting
and mergers and acquisitions. While in this position he has served as the
principal negotiator for over 25 acquisitions or divestitures. Mr. Oliver's
management experience has encompassed a wide variety of manufacturing, retail,
service, and distribution companies. Mr. Oliver previously served as head of
the Culligan International development group where he led an innovative and
active plan of acquiring Culligan dealers. Subsequently, he served as
co-managing partner for Anne Klein & Co. where he launched the very successful
Anne Klein retail operation. Mr. Oliver has also served in a variety of
management positions in computer service and software, automotive manufacturing
and distribution, publishing, international pipeline construction, and real
estate development. Mr. Oliver has served as a member of the board of
directors of a number of manufacturing, software and service companies and
presently is a board member of AMCAL, Inc., Calpine Containers, Inc., North
American Imports, Inc., and, ex officio, Willitts Designs International, Inc.
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Mr. Oliver is a graduate of the U.S. Naval Academy and served five years as
a surface and submarine naval officer. He has been a long-time member of the
Young Presidents Organization and its graduate group World Presidents
Organization and has been a guest lecturer to several graduate schools of
business.
Joseph M. DeLuca, Director
Mr. DeLuca has provided consulting services in addition to line, interim or
turnaround management positions in the healthcare industry for over 22 years.
His experience includes healthcare information technology suppliers, healthcare
delivery systems, academic medical centers, payor and physician organizations.
His clients include the nation's largest investor owned financially integrated
delivery system, the nation's largest non-profit financially integrated
delivery system, and the nation's largest delegated risk physician organization.
His professional continuum also includes futurist, research and publication
activities. In 1996, Mr. DeLuca co-founded Healthcare Investment Visions LLC,
a research, business development and management consultancy located in the San
Francisco Bay Area. The firm is committed to providing objective, visionary
services within the context of current healthcare information and medical
technology trends, adoption and market conditions. Between 1985 and 1995, Mr.
DeLuca was the founder and President of JDA, a consulting firm providing
information systems strategy, vendor selection, development, implementation and
management services to healthcare provider organizations. In 1995, JDA was
acquired by Science Applications International Corporation (SAIC). Between 1984
and 1985, Mr. DeLuca served as a senior manager with Computer Synergy Inc., a
public company who developed hospital information systems. His duties included
corporate strategy development, sales and marketing support, financial systems
product management, and operational finance. Between 1980 and 1984, Mr. DeLuca
was a manager with the Management Information Consulting Division of Arthur
Andersen (now Accenture), responsible for healthcare information systems
consulting services to provider and payor organizations. Mr. DeLuca is a
fellow of the American College of Healthcare Executives, and was recently
awarded the ACHE Regent's Senior Leadership Award for service to the community.
Mr. DeLuca is a frequent speaker at high-profile regional and national
conferences, a lecturer for university programs, and is the author of numerous
manuscripts and books.
Mr. DeLuca holds a Master of Arts-Health Services Administration from the
University of Wisconsin, Madison, and graduated from Lawrence University,
Appleton, Wisconsin with a Bachelors degree in Biology, with high honors.
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Pamela G. Atherton, President of the Medical Professional Temporary Placement
Division
Ms. Atherton has over 25 years experience in the healthcare industry. Her
career includes time as a corporate executive with a large national HMO as well
as ten years as Chairman and CEO of two healthcare services organizations.
Ms. Atherton began her career at Humana, Inc., where she served from 1982 to
1992. She held numerous field and corporate positions and was the corporate
director of Nursing/Allied Heath Recruitment and Retention from 1988 to 1992.
In that role, she led the nursing and allied health recruitment for over
hospitals nationwide. Her creative solutions to recruitment and retention were
featured in Modern Healthcare and numerous other trade publications. From 1992
to 1997, Ms Atherton served as Chief Executive Officer of Resource Factor, a
privately held female business enterprise that she founded, which specialized in
per diem and mobile nurse/allied health staffing. After securing venture
capital, the company expanded into two additional satellite offices. Ms Atherton
led the sale of those businesses in 1997. From 1996 to 2000, Ms. Atherton served
as Chairman and Chief Executive Officer of Aperture Credentialing, Inc., a
company she founded which provides data management of physician information for
provider credentialing. The company also provided nurses, nationwide, to
perform physician office site visits and HEDIS data collection. Since 2000,
Ms. Atherton has continued to serve as Vice Chairman of Aperture's Board of
Directors. Since 2001, Ms. Atherton has led the commercial division of Appriss,
Inc., a pioneering voice application service provider. Her division specializes
in providing innovative voice solutions for the healthcare industry. These
applications assist the industry in enabling access to mission critical
information over the telephone using human speech. Ms. Atherton formed Crois,
Inc., in 2000 as a consulting company specializing in healthcare services and
staffing. She has served as a consultant to the company.
Ms. Atherton graduated, magna cum laude, from Kentucky Southern College and
holds a Masters Degree from the University of Louisville. Ms. Atherton is a
Woodrow Wilson Fellow and has been honored as a female business owner as well as
an innovative entrepreneur and community leader.
Lawrence M. Davis, Chief Financial Officer
Mr. Davis has more than 25 years experience as a financial executive. From
January 1999 to present, Mr. Davis has served as an independent financial
consultant, providing consulting services to numerous software and technology
companies in preparing for financing events including initial public offerings
and venture financings. Such consulting services included creating financial
reporting systems, designing and implementing long-range financial forecasts,
and providing advice regarding cash management and all aspects of corporate
administration. From March 1997 to August 1998, Mr. Davis was the corporate
controller and interim CFO of FirstAmerica Automotive, Inc., a publicly held
consolidator of automotive dealerships. This company was formed as the result
of a reverse merger into a "shell" while simultaneously raising $250 million in
debt financing from GE Capital for the purpose of financing seven acquisitions.
In 1998, this company was sold to Sonic Automotive. Previously, Mr. Davis
served as the CFO of The Nalley Companies, another consolidator of automotive
dealerships, where he arranged for its sale to Asbury Automotive. Other
professional experience has included serving as a senior credit officer and
commercial lender with Citicorp, controllership of the US subsidiary of
LeasePlan Holland N.V, Europe's largest automotive leasing company, and as a
member of the audit staff of Arthur Andersen. He also served as a Regular Army
officer in tank battalions in the former Federal Republic of Germany and in the
stateside.
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Mr. Davis earned his MBA and BS (accounting) from Auburn University, and a
BS (mechanical engineering and Russian language) from the US Military Academy at
West Point, NY. He is licensed as a certified public accountant by the State of
Georgia.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
3.1 Restated Certificate of Incorporation.
3.2 Restated Bylaws.
10.1 Common Stock Purchase Agreement dated effective as of
May 15, 2002, without underlying exhibits.
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report on Form 8-K to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 21, 2002 Lifen, Inc.
(Registrant)
By: /s/ James D. Durham, CEO
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James D. Durham, CEO
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