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: December 23, 2005
AcuNetx, Inc.
(Exact name of the Company as specified in its charter)
Nevada 0-27857 88-0249812
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1000 S. McCaslin Blvd., Suite 300
Superior, CO 80027
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(Address of principal executive offices)
The Company's telephone number, including area code:
(303) 494-1681
Eye Dynamics, Inc.
2301 W. 205th Street, #102, Torrance, CA 90501
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(former name and former address)
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
As part of the merger transaction described in Item 2.01 below, the
Registrant entered into a three-year employment agreement with Ronald A.
Waldorf, President of its Eye Dynamics division. The Employment Agreement
provides for a salary of $150,000 per year, subject to cost of living
adjustments. The Agreement also calls for the issuance of options to purchase up
to 1.3 million shares of Common Stock, vesting over three years. The options are
exercisable at $.18 per share, equal to the closing price of the Common Stock
on the OTC Bulletin Board on the day prior to the merger transaction.
SECTION 2 -FINANCIAL INFORMATION
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On December 23, 2005 the Registrant completed the merger contemplated by
the Agreement and Plan of Merger (the "Merger Agreement"), between the
Registrant, OrthoNetx, Inc. ("OrthoNetx") and Eye Dynamics Acquisition Corp., a
direct wholly owned subsidiary of the Registrant ("Merger Sub").
In accordance with the Merger Agreement, Merger Sub was merged into
OrthoNetx, with OrthoNetx, Inc. continuing as the surviving corporation in such
merger as a wholly owned subsidiary of Registrant (the "Merger"). Subject to
certain adjustments described in the Merger Agreement, each outstanding share of
Common Stock of OrthoNetx was converted into approximately .81 shares of Common
Stock of Registrant.
As provided in the Merger Agreement, immediately following the Merger the
Registrant's name was changed to AcuNetx, Inc. and five additional persons were
appointed to the Board of Directors: Terry R. Knapp, Randolph C. Robinson,
Robert S. Corrigan, William Danielczyk and Stephen Moses. Mr. Moses was also
elected as Chairman of the Board. Ronald A. Waldorf and Charles E. Phillips
remain on the Board of Directors. Also, Terry Knapp, President of OrthoNetx, was
appointed Chief Executive Officer, Ronald A. Waldorf was appointed President of
the Eye Dynamics division, and Douglas MacCarthy was appointed Vice
President-Operations, Chief Financial Officer and Secretary.
A condition to the closing of the transaction was the completion of a
private securities offering by OrthoNetx with gross proceeds of $1.5 million,
which condition was subject to waiver by Registrant. As of the closing,
OrthoNetx had received cash proceeds of $600,000 in the private placement, as
well as subscriptions to purchase an additional $800,000. Registrant waived the
requirement of $1.5 million in cash proceeds, and determined to proceed with the
transaction based on the actual cash and subscriptions received.
SECTION 3 -SECURITIES AND TRADING MARKETS
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
On December 23, 2005, in accordance with the Agreement and Plan of Merger
described in Section 2.01 above, the Registrant issued 30,153,810 shares of its
Common Stock, and assumed warrants to purchase an additional 1,805,562 shares of
Common Stock. The shares were issued in exchange for all of the outstanding
shares of Common Stock of OrthoNetx, Inc. The warrants are exercisable at an
exercise price of $ .33 per share, and expire in two years from the date of
issuance.
The securities were issued pursuant to the exemption provided by Section
3(a)(10) of the Securities Act of 1933, as amended (the "Securities Act"), which
exempts from the registration requirements "...any security which is issued in
exchange for one or more bona fide outstanding securities, claims or property
interests, or partly in such exchange and partly for cash, where the terms and
conditions of such issuance and exchange are approved, after a hearing upon the
fairness of such terms and conditions at which all persons to whom it is
proposed to issue securities in such exchange shall have the right to appear, by
... any State ... or other governmental authority expressly authorized by law to
grant such approval." The securities were issued following a "fairness hearing"
conducted by the California Commissioner of Corporations.
In addition, the Registrant has received subscriptions to purchase
4,444,445 shares and warrants to purchase 2,222,223 shares. The warrants, when
issued, will be exercisable at $.33 per share, and will expire two years from
the date of issuance. These shares and warrants, when issued, will be issued
pursuant to the exemption from registration provided by Section 4 (2) of the
Securities Act of 1933, as amended, and Regulation D thereunder.
SECTION 5 -CORPORATE GOVERNANCE AND MANAGEMENT
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS CHANGES IN CONTROL OF REGISTRANT
On December 23, 2005, in accordance with the Agreement and Plan of Merger
described in Section 2.01 above, Stephen Moses, Terry R. Knapp, Randolph C.
Robinson, Robert S. Corrigan, and William Danielczyk were appointed to the Board
of Directors, and Mr. Moses was also elected as Chairman of the Board. In
addition, Mr. Knapp was elected as Chief Executive Officer and Douglas MacCarthy
was elected as Vice President-Operations, Chief Financial Officer and Secretary.
Ronald A. Waldorf resigned as Chief Executive Officer and was elected as
President of the Eye Dynamics Division, and Charles E. Phillips resigned as
Chief Financial Officer and Secretary. Messrs. Waldorf and Phillips remain on
the Board of Directors
The following is a brief description of the business experience of each of
the new directors and executive officers:
Stephen Moses was a director of OrthoNetx, Inc. between June 2005 and its
acquisition by Registrant. He has over thirty years of finance, mergers &
acquisitions, as well as business and real estate development experience. Mr.
Moses is Vice Chairman of MP Biomedicals, Inc., a company dedicated to promoting
research in the life science and biotech industries, and has been Chairman of
the Board of Stephen Moses Interests since 1981. He was founder and chairman of
National Investment Development Corp. and of Brentwood Bank. Mr. Moses has been
involved in the privatization and capitalization of businesses in the emerging
economies of the former Soviet Bloc, as a member of the Board of ICN
Pharmaceuticals (NYSE) and Chairman of its Audit Committee. He is a member of
the Board of The Central Asian-American Enterprise Fund, appointed by the
President of the United States, and was Chair of its Investment Committee. Mr.
Moses received a BS in Economics from Franklin & Marshall College and is a Cum
Laude graduate of Harvard Law School.
Randolph Robinson, M.D., D.D.S. was the founder and Chairman of the Board
of Directors of OrthoNetx. Dr. Robinson, a craniofacial surgeon with both
medical and dental degrees, has been in private practice since 1992 in Denver,
Colorado. He is a recognized authority on distraction osteogenesis and has
authored peer reviewed journal articles in the field. He patented and has
clinically developed the four GENEROS(TM) products developed by OrthoNetx.
Terry R. Knapp, M.D. was Chief Executive Officer and a director of
OrthoNetx between December 1, 2003 and its acquisition by Registrant. Dr. Knapp
is a reconstructive facial and hand surgeon, and has served in executive
positions with several medical device companies. He was a founder and an
executive officer and director of Collagen Corporation, a successful independent
public (NASDAQ) medical device company. He also co-founded and served as
Chairman and CEO of Lipomatrix, a medical device company based in Switzerland,
with operations both in the U.S. and Europe. Dr. Knapp is also an international
pioneer in the use of IT-based informed consent for privacy and management of
personalized healthcare information. Dr. Knapp has spoken and published
extensively on matters of quality systems and risk management in health care.
Robert S. Corrigan has been in the financial services and corporate finance
industry for over 20 years. For more than the past ten years, Mr. Corrigan has
served as Chairman and Chief Executive Officer of Centennial Capital Group,
Inc., an investment banking enterprise located in Boulder, Colorado which
assists developmental stage and other companies in corporate finance, mergers
and acquisitions and business development. Prior to founding CCGI, Mr. Corrigan
was employed by the major financial services companies of Merrill Lynch, Pierce
Fenner & Smith, Inc. and Paine Webber, Inc.
William P. Danielczyk is Chairman of Galen Capital Group, a merchant
banking firm serving mid-market companies, and as Chairman of the Board of
FractionAir, Inc., a fractional jet ownership company. Mr. Danielczyk was also
Chairman and CEO of Millennium Health Communications, Inc. (MHC), a healthcare
technology company until its acquisition. Mr. Danielczyk also was the founder
and CEO of Ambulatory Healthcare Corporation of America (AHCA), a comprehensive
network of integrated outpatient healthcare services. An advisor on healthcare
issues to government and industry leaders, Mr. Danielczyk was a member of the
National Health Museum Board of Trustees from 1999 to 2002, has served on
numerous other non-for-profit boards, and held advisory positions with a number
of charitable organizations.
Douglas MacCarthy served as Vice President, Operations for OrthoNetx
between 2002 and its acquisition by Registrant. Between 1968 until 1999 he was
employed by IBM and served in various positions including manager of finance,
planning and administration, and team leader for critical situation management.
Mr. MacCarthy earned a B.A. degree in Economics in 1967 and an MBA in 1968, both
from the University of Michigan.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
(b) Pro forma Financial Information.
Financial statements and pro forma financial information, to the extent
required by Item 9.01(a) and (b), are not included with this Current Report on
Form 8-K and will be filed by amendment to this Current Report on Form 8-K not
later than March 13, 2006.
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, thereunto duly authorized.
AcuNetx, Inc., a Nevada
corporation
By: /s/ Terry Knapp, Chief Executive Officer
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Terry Knapp, Chief Executive Officer
Date: December 30, 2005