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): February 12, 2004
(January 30, 2004)
NUWAY MEDICAL, INC.,
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-43423 65-0159115
--------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
23461 South Pointe Drive, Suite 200, Laguna Hills, Ca 92653
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 454-9011
--------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OF ASSETS.
(a) On January 31, 2004, NuWay Medical, Inc. (the "Company") entered into
a tax free reorganization with Premium Medical Group, Inc., a Florida
corporation ("Premium") pursuant to a Stock Purchase Agreement (the
"Agreement") that called for the Company to acquire 100% of the shares
of Premium from Eduardo A. Ruiz and Luis A. Ruiz, Premium's sole
shareholders, in exchange for 30,000,000 shares of the Company's
common stock, subject to adjustment as more fully described in the
Agreement (the "Transaction). Based on the closing bid price for the
Company's common stock on January 31, 2004, the shares issued to the
Premium shareholders in connection with the Transaction have been
valued at approximately $1,500,000. The Agreement is attached to this
Form 8-K as Exhibit 2.1, and the description of the Transaction
contained herein is qualified in its entirety by reference to the
Agreement.
(b) The consideration for the Transaction was determined through
arms'-length negotiation between the Company and Premium and its
shareholders, giving due consideration to the market value of the
Company's common stock and the estimated value of Premium. . The
30,000,000 shares issued in the Transaction are being held in escrow
and are subject to downward adjustment pursuant to an agreed upon
formula, as more fully described in the Agreement. Eduardo A. Ruiz and
Luis A. Ruiz retain the full voting rights of these shares while they
are held in escrow. In addition, the consideration for the Transaction
includes an earn out bonus in which the Premium shareholders may
receive warrants to purchase the Company's common stock if, as of
December 31, 2004, Premium has made a net profit during the calendar
year 2004, pursuant to the following formula: (i) 20% of Net Income
(GAAP) for Net Income of up to $1,000,000; (ii) 15% of Net Income
(GAAP) for Net Income of $1,000,000 up to $2,000,000; (iii) 10% of Net
Income (GAAP) for Net Income over $2,000,000.
(c) Immediately following the Transaction, the Company's capitalization
consisted of 66,386,486 shares of common stock outstanding, of which
the Company's shareholders prior to the Transaction held 36,386,486
shares, and the former Premium shareholders held 30,000,000 shares.
The 30,000,000 shares represent approximately 45% of the
post-Transaction outstanding common shares of the Company.
(d) As a condition to Premium entering into the Agreement, New Millennium
Capital Partners, LLC (a company controlled by Dennis Calvert, the
Company's CEO and President), agreed to convert its secured promissory
note in the principal amount of $1,120,000 (together with $114,800 in
accrued but unpaid interest thereon) into 30,869,992 shares of the
Company's Common Stock. Following this conversion, the Company's
capitalization will consist of 97,256,478 shares of common stock
outstanding, and Mr. Calvert will be the beneficial owner of
approximately 35,651,992 shares of common stock or approximately 37%
of our outstanding stock, which includes the 4,782,000 shares he
currently owns. We expect the conversion to occur within the next 60
days.
(e) Additionally, pursuant to the Agreement, the Company agreed to appoint
Mr. Luis A. Ruiz to the Company's Board of Directors, subject to Mr.
Ruiz's formal acceptance of the position and a standard application
and background check process that the Company expects to be completed
within the next 30 days. Once Mr. Ruiz has been appointed to the
board, our Board of Directors will consist of Mr. Dennis Calvert, Mr.
Gary Cox, Mr. Steven Harrison, Mr. Joseph Provenzano and Mr. Luis A.
Ruiz. There are no other material relationships between Premium or the
shareholders thereof, and the Company or any of its affiliates or any
of its officers or directors.
(f) Premium was organized in June 2003 to engage in the medical equipment
export and import business with South and Central America. Premium (i)
sells medical, hospital, surgical and deontological equipment,
including fully guaranteed used and re-conditioned equipment; (ii)
provides professional advice on special projects for hospitals such
as: investigation and recommendations for alternative equipment; (iii)
replaces discontinued equipment; and (iv) supplies spare parts for the
medical industry. Premium also serves as a purchasing agent, handling
and consolidating international cargo to South and Central America,
which includes receipt, warehousing, shipping and custom management of
cargo and general merchandising services.(g)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial statements of businesses acquired.
To be filed by amendment not later than 60 days after the last date on
which this Form 8-K was required to be filed.
(b) Pro forma financial information.
To be filed by amendment not later than 60 days after the last date on
which this Form 8-K was required to be filed.
(c) Exhibits.
2.1 Stock Purchase Agreement. Schedule 2.1.6 (financial statements) has been
omitted. The Registrant will furnish supplementally a copy of this
schedule to the commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NuWay Medical, Inc.
By:/s/ Dennis Calvert
------------------------
Dennis Calvert, President
Dated February 12, 2004