-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VdH8Tx+SUNxBhQ2U0wlqpiLSSLt6OooAP+T/1kr6K57jHv9OgzLzKYjLN6QDpe5w ApAA4n4DshMHZLcrDgS5Rg== 0000950116-99-001059.txt : 19990518 0000950116-99-001059.hdr.sgml : 19990518 ACCESSION NUMBER: 0000950116-99-001059 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREMIER RESEARCH WORLDWIDE LTD CENTRAL INDEX KEY: 0001026650 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 223264604 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-29100 FILM NUMBER: 99627601 BUSINESS ADDRESS: STREET 1: 124 SOUTH 15TH ST CITY: PHILADELPHIA STATE: PA ZIP: 19172 BUSINESS PHONE: 2159720420 MAIL ADDRESS: STREET 1: 124 SOUTH 15TH STREET CITY: PHILADELPHIA STATE: PA ZIP: 19102 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 205498 FORM 10-Q (Mark One) [ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended March 31, 1999 or [ ] Transitional report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transitional period from _______________to_____________ Commission file number 0-29100 ------- PREMIER RESEARCH WORLDWIDE, LTD. -------------------------------- (Exact name of registrant as specified in its charter)
Delaware 22-3264604 - --------------------------------------------- ------------------------------------- (State or other jurisdiction of incorporation (I.R.S. Employeer Identification No.) or organization) 30 South 17th Street Philadelphia, PA 19103 - --------------------------------------------- ------------------------------------- (Address of principal executive offices) (Zip Code)
215-972-0420 (Registrant's telephone number, including area code) N/A - -------------------------------------------------------------------------------- (Former name, former address and formal fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports, and (2) has been subject to such filing requirements for the past 90 days. X Yes No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. The number of shares of Common Stock, $.01 par value, outstanding as of May 12, 1999, was 7,114,720. PREMIER RESEARCH WORLDWIDE, LTD. AND SUBSIDIARIES INDEX
Page Part I. Financial Information Item 1. Consolidated Financial Statements Condensed consolidated balance sheets--March 31, 1999 (unaudited) and December 31, 1998 3 Condensed consolidated statements of operations (unaudited)--Three Months Ended March 31, 1999 and 1998 4 Condensed consolidated statements of cash flows (unaudited)--Three Months Ended March 31, 1999 and 1998 5 Notes to condensed consolidated financial statements (unaudited) 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 Item 3. Qualitative and Quantitative Disclosures about Market Risk 11 Part II. Other Information Item 2. Changes in Securities and Use of Proceeds 12 Item 6. Exhibits and Reports on Form 8-K 13 a.) Exhibits 10.24 Consulting Agreement between AmericasDoctor.com, Inc. and Premier Research Worldwide 27.0 Financial Data Schedule b.) Reports on Form 8-K None Signatures 14 Exhibits
2 PREMIER RESEARCH WORLDWIDE, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts)
March 31, 1999 December 31, 1998 -------------- ----------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 8,769 $ 10,822 Short-term investments 6,068 5,668 Accounts receivable, net 12,283 10,423 Prepaid expenses and other 1,342 2,176 Deferred income taxes 159 159 -------- -------- Total current assets 28,621 29,248 Property and equipment, net 4,588 4,110 Goodwill, net 2,081 2,160 Other assets 1,023 1,023 Deferred income taxes 3,352 3,631 -------- -------- $ 39,665 $ 40,172 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,448 $ 2,519 Accrued expenses 1,421 1,156 Deferred revenues 4,395 5,556 -------- -------- Total current liabilities 8,264 9,231 -------- -------- Commitments and contingencies Stockholders' equity: Preferred stock-$10 par value, 500,000 shares authorized, none issued and outstanding -- -- Common stock-$.01 par value, 15,000,000 shares authorized, 7,236,520 and 7,217,520 shares issued and outstanding 72 72 Additional paid-in capital 37,103 37,061 Treasury stock, 177,800 shares at cost (779) (779) Accumulated deficit (4,995) (5,413) -------- -------- Total stockholders' equity 31,401 30,941 -------- -------- $ 39,665 $ 40,172 ======== ========
The accompanying notes are an integral part of these statements 3 PREMIER RESEARCH WORLDWIDE, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share information)
Three Months Ended March 31 --------------------------- 1999 1998 ---- ---- (unaudited) Revenues $ 12,287 $ 8,013 Less-Reimbursed costs (2,778) (1,240) -------- -------- Net revenues 9,509 6,773 -------- -------- Costs and expenses: Direct costs 4,707 2,758 Selling, general and administrative 3,740 3,825 Depreciation and amortization 513 343 -------- -------- Total costs and expenses 8,960 6,926 -------- -------- Income (loss) from operations 549 (153) Other income, net 148 262 Income before income taxes 697 109 Income tax provision 279 44 -------- -------- Net income $ 418 $ 65 Basic and diluted net income per share $ 0.06 $ 0.01 ======== ========
The accompanying notes are an integral part of these statements 4 PREMIER RESEARCH WORLDWIDE, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Three Months Ended March 31 --------------------------- 1999 1998 ---- ---- (unaudited) Operating activities: Net income $ 418 $ 65 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 513 343 Provision for losses on accounts receivable 30 -- Deferred income taxes 279 44 Changes in assets and liabilities: Accounts receivable (1,890) (644) Prepaid expenses and other 834 (272) Accounts payable (71) (548) Accrued expenses 265 (97) Deferred revenues (1,161) 1,693 -------- -------- Net cash provided by (used in) operating activities (783) 584 -------- -------- Investing activities: Purchases of property and equipment (912) (609) Purchases of short-term investments (400) -- Proceeds from sales of short-term investments -- 4,387 -------- -------- Net cash provided by (used in) investing activities (1,312) 3,778 -------- -------- Financing activities: Net proceeds from exercise of stock options 42 534 Net increase (decrease) in cash and cash equivalents (2,053) 4,896 Cash and cash equivalents, beginning of period 10,822 4,679 -------- -------- Cash and cash equivalents, end of period $ 8,769 $ 9,575 ======== ========
The accompanying notes are an integral part of these statements 5 PREMIER RESEARCH WORLDWIDE, LTD. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three month period ended March 31, 1999, are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. Further information on potential factors that could affect the Company's financial results can be found in the Company's S-1 Registration Statement and its Reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. Note 2. Net Income per Share The Company follows SFAS No. 128 "Earnings per Share". This statement requires the presentation of basic and diluted earnings per share. Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year, adjusted for the dilutive effect of common stock equivalents, which consist primarily of stock options, using the treasury stock method. The table below sets forth the reconciliation of the numerators and denominators of the basic and diluted net income per share computations.
Three Months Ended March 31, Per Net Share 1999 Income Shares Amount - ------------------------------------------------ ------ ------ ------ Basic net income................................ $ 418,000 7,049,000 $ 0.06 Effect of dilutive shares....................... 108,000 -- --------------- ----------- ----------- Diluted net income.............................. $ 418,000 7,157,000 $ 0.06 =============== ========= =========== 1998 - ------------------------------------------------ Basic net income................................ $ 65,000 7,082,000 $ 0.01 Effect of dilutive shares....................... 146,000 -- --------------- ----------- ----------- Diluted net income.............................. $ 65,000 7,228,000 $ 0.01 =============== =========== ===========
Options to purchase 215,635 and 300,983 shares of common stock were outstanding at March 31, 1999 and 1998, respectively, but were not included in the respective computations of diluted net income per share because the option exercise prices were greater than the average market price of the Company's common stock during the respective periods. 6 Note 3. Comprehensive Income The Company follows SFAS No. 130, "Reporting Comprehensive Income." The Company's comprehensive income includes net income and unrealized gains and losses from foreign currency translation and short-term investments. These unrealized gains and losses were immaterial as of March 31, 1999 and 1998. Note 4 Operating Segments In June 1997, SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," was issued, effective for fiscal years ending after December 15, 1998. The Company adopted this statement for the year ended December 31, 1998. The Company's reportable segments are strategic business units that offer different products and services to a common client base. The segments are managed separately because each business requires different technology. The Company's products and services are provided through two business segments, both in the United States and internationally: Clinical Operations, which includes centralized diagnostic testing services, clinical trial management services and clinical data management services; and Technology Operations, which includes clinical trial and data management software, support and consulting services. The Company's discontinued Phase I Clinical Research Unit and income and expense not allocated to reportable segments are reported as Other. The Company evaluates performance based on the net revenues and operating earnings performance of the respective business segments.
Segment information is as follows: Three months ended March 31,1999 ------------------------------------------------------------------- Clinical Operations Technology Other Total ---------- ---------- ----- ----- Net revenues from external customers $7,491,000 $2,018,000 -- $9,509,000 Income from operations 266,000 283,000 -- 549,000 Identifiable assets 16,131,000 4,025,000 19,509,000 39,665,000 Three months ended March 31, 1998 ------------------------------------------------------------------- Clinical Operations Technology Other Total ---------- ---------- ----- ----- Net revenues from external customers $4,186,000 $2,513,000 $74,000 $6,773,000 Income (loss) from operations (676,000) 559,000 (36,000) (153,000) Identifiable assets 8,001,000 3,434,000 26,986,000 38,421,000
7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview The Company is a clinical research organization providing a broad range of integrated product development services on a global basis to its clients in the pharmaceutical, biotechnology and medical device industries. The Company's products and services are provided, both in the United States and internationally, through two business segments: Clinical Operations, which includes centralized diagnostic testing services, clinical trial management services and clinical data management services; and Technology Operations, which includes the development, marketing and support of clinical trial and data management software, support and consulting services. The Company had operated a Phase I Clinical Research Unit, which was closed in the first quarter of 1998. The Company's centralized diagnostic testing services are on a fee-for-service basis and contracts generally have terms of one month to two years. A portion of the Company's fee frequently is paid upon contract execution as a non-refundable up-front payment, with the remaining amounts billed monthly. Clinical trial and data management services are generally fixed priced contracts, with certain variable components, and range in duration from a few months to two years. A portion of the Company's fee frequently is paid upon contract execution as a non-refundable up-front payment, with the balance billed in accordance with the contract terms. The Company's contracts generally may be terminated with or without cause on 30 to 90 days notice. Clients terminate or delay contracts for a variety of reasons, including, among others, the failure of the product(s) being tested to satisfy safety or efficacy requirements; unexpected or undesired clinical results of the product; the client's decision to forego a particular study; insufficient patient enrollment or investigator recruitment, and production problems resulting in shortages of required supplies. Revenues from clinical trial software and services are derived primarily from software license fees, software maintenance and support and consulting services. Revenues from centralized diagnostic testing services are recognized as the services are performed. Revenues from clinical trial and data management services are generally recognized on a percentage of completion basis as work is performed. The Company regularly subcontracts with third-party investigators in connection with clinical trials and with other third-party providers for specialized services. These and other reimbursable costs are paid by the Company and reimbursed by clients and, in accordance with industry practice, are included in revenues. Since reimbursed costs may vary significantly from contract to contract and are not meaningful for analyzing trends in revenues, they are included in gross revenues but excluded from net revenues. Revenues from technology software licenses are recognized upon shipment of the software and related documentation when collectibility is deemed probable and the license fee is deemed fixed and determinable. Revenues from software maintenance and continuing support contracts are recognized on a straight-line basis over the period in which the software maintenance and continuing support is provided, generally twelve months. Revenues from consulting and training services are recognized when the services are performed. Results of Operations Three months ended March 31, 1999 compared to three months ended March 31, 1998. Net revenues for the three months ended March 31, 1999, increased $2,736,000 or 40.4 % to $9,509,000 compared to $6,773,000 for the three months ended March 31, 1998. The Company experienced a strong increase in net revenues in its Clinical Operations, which increased $ 3,305,000 or 79.0% to $7,491,000 for the period ended March 31, 1999 compared to $4,186,000 for the same period in 1998. The increase in net revenues was due to the Company's strong performance in centralized diagnostic testing services which increased $1,638,000 or 88.3% to $3,494,000 in the 1999 period from $1,856,000 in the 1998 period. In addition, the Company's clinical trial and data management services net revenues increased $1,667,000 or 71.5% to $3,997,000 for the three months ended March 31, 1999 from $2,330,000 for the three months ended March 31, 1998. Overall, the increase in net revenues for Clinical Operations resulted from revenues recognized from the Company's contract backlog and new clinical contracts signed during the first three months of 1999. 8 Net revenues for Technology Operations declined $495,000 or 19.7% to $2,018,000 for the three months ended March 31, 1999 from $2,513,000 for the three months ended March 31, 1998. The decline in net revenues was due entirely to revenues from significant software license and consulting contracts during the first quarter of 1998 while comparable contracts did not occur during the first quarter of 1999. Included in the net revenues for Technology Operations of the three months ended March 31, 1999 was $575,000 in consulting revenues relating to the Company's consulting contract with AmericasDoctor.com, Inc. (see Liquidity and Capital Resources). During the first quarter of 1998, the Company recorded net revenues of $74,000 from its Phase I unit, which was closed during that quarter. Direct costs for the three months ended March 31, 1999 increased $1,949,000 or 70.7% to $4,707,000 from $2,758,000 for the three months ended March 31, 1998. Direct costs, as a percentage of net revenues, increased to 49.5% for the three months ended March 31, 1999 compared to 40.7% for the same period in 1998. The increase in direct costs is due to increased staffing and subcontracting costs to support client contract requirements and to accommodate projected future net revenues. The increase in direct costs as a percentage of net revenues is due to the increase in staff and subcontracting costs and to the mix of revenues as Clinical Operations net revenues have a higher direct cost ratio than Technology Operations net revenues. Selling, general and administrative expenses declined slightly to $3,740,000 for the three months ended March 31, 1999 from $3,825,000 for the three months ended March 31, 1998. The decline in selling, general and administrative expenses is due to personnel related and other expenses incurred in the first three months of 1998 which were not incurred in the first three months of 1999. As a percentage of net revenues, selling, general and administrative expenses were 39.3% for the first three months of 1999 compared to 56.5% for the first three months of 1998. The decline in the percentage was due entirely to the stabilization of expenses year to year and increasing net revenues. Depreciation and amortization expense increased to $513,000 in the first quarter of 1999 from $343,000 in the comparable 1998 quarter. The increase was due to increased depreciation expense resulting from additional capital spending to support the growth in net revenues. Other income, which consists primarily of interest earned on the Company's cash, cash equivalents and short-term investments, decreased to $148,000 from $262,000 for the three months ended March 31, 1999 and 1998, respectively. The decrease is due to lower cash and short-term investment balances in 1999 as a result of the Company's investment in AmericasDoctor.com, Inc., in July 1998, and general uses of cash to support working capital and capital expenditure needs during 1998 and in the first quarter of 1999. The Company's effective tax rate was 40.0% for the three months ended March 31, 1999 and 1998, respectively. Liquidity and Capital Resources For the three months ended March 31, 1999, the Company used cash in operations of $783,000 compared to cash provided by operations of $584,000 for the three months ended March 31, 1998. The year-to-year change was primarily the result of increased accounts receivable and decreased deferred revenues, reflecting the Company's increasing revenues, partially offset by increased net income and cash provided by changes in other working capital accounts. At March 31, 1999, the Company had $8,769,000 of cash and cash equivalents on hand and $6,068,000 invested in short-term investments. The Company generally places its investments in A1P1 rated commercial bonds and paper, municipal securities and certificates of deposit with maturities of less than one year. During the three months ended March 31, 1999, the Company purchased $912,000 of equipment compared to $609,000 during the three months ended March 31, 1998. The increase in equipment purchases reflects the additional capital equipment needed to support the growth of the Company. 9 During the three months ended March 31, 1999, the Company received $42,000 in cash from the exercise of 19,000 employee stock options. On March 22, 1999, the Company announced that it had entered into a two-year, $4.6 million consulting contract with AmericasDoctor.com, Inc. Under the terms of the contract, the Company will provide consulting services to enhance this internet company's capability to effectively support patient identification, recruitment and referral to clinical investigational sites for both Premier Research and other companies in the pharmaceutical, biotechnology and medical device industries. The Company's consulting fees will be paid in eight equal quarterly installments through December, 2000. The Company has a line of credit with a bank, through June 30, 1999, that provides for borrowings up to $3,000,000 at an interest rate of prime minus 35 basis points. The line of credit agreement includes certain covenants, the most restrictive of which limit future indebtedness and require compliance with a liabilities-to-tangible net worth ratio. To date, the Company has not borrowed any amounts under its line of credit. The Company expects that existing cash and cash equivalents, short-term investments, cash flows from operations and borrowings under its line of credit will be sufficient to meet its foreseeable cash needs for at least the next year. However, there may be acquisition and other growth opportunities that require additional external financing and the Company may from time to time seek to obtain additional funds from the public or private issuances of equity or debt securities. There can be no assurance that such financings will be available or available on terms acceptable to the Company. Year 2000 The Company is aware of the issues and problems associated with the Year 2000 date change. The Company has been addressing company-wide data processing and infrastructure issues since 1995. Premier Research has undertaken a Year 2000 Compliance Plan that will be completed by September 1, 1999. In addition, the Company also plans to have all clinical systems Year 2000 compliant by June 30, 1999. The purpose of this plan is to assure that Premier Research, as a corporate entity, has assessed and taken appropriate actions necessary to become compliant with any issues regarding Year 2000 requirements. The problems surrounding Year 2000 compliance are of extreme concern to the Company, since Premier Research is a clinical research organization providing diagnostic testing and clinical research services to the pharmaceutical industry, as well as a developer of clinical database management software. The Company produces and delivers information that is date sensitive, especially in deriving date and time calculations; Premier Research currently can provide to its clients, date formats that contain century markers or 4-digit year fields for any of its clinical and diagnostic information. The Company's strategy to address Year 2000 compliance is to replace potentially non-compliant software and hardware with new compliant systems or updated Year 2000 compliant versions. The inventory and assessment phases of the Year 2000 plan have primarily been completed for its hardware and software systems. The Company has begun its remediation phase of the plan through the replacement and updating of systems. As of today over 90% of the Company's information technology infrastructure has been assessed and found to be free from any Year 2000 issues. Those that have shown not to be in compliance are currently being evaluated and renovated for compliance. If a system can not be made compliant to the requirements, the system will be replaced with one that is compliant. The Company is also assessing its facilities worldwide that it leases or owns, and plans to complete its deployment of applicable contingency plans by September 1, 1999. The Company is also assessing and surveying its suppliers of third party products and services. Based upon information received from such parties, the Company believes that most of its suppliers are developing, assessing and remediating any issues associated with their Year 2000 plans. The Company cannot at this time fully assess the status of its suppliers until they have completed their own efforts. It will review the readiness of the suppliers on an on-going basis throughout the remainder of the year and will implement specific actions to rectify potential problems in its supply chain. 10 As with any other company in its industry or any business in general, the Company is exposed to risks associated with failures in the private and public sector to become Year 2000 compliant. These risks include the possibility that public infrastructure systems, such as electricity, water, natural gas or telecommunications may fail in this country and other countries in the world that the Company does business. In addition, there are those risks that the internal systems of the Company's suppliers, service providers and customers will fail. The Company also relies considerably on travel and could be adversely affected, if air and train travel is disrupted by issues related to the Year 2000. The Company also relies heavily on the healthcare industry. This industry and its related clinical investigational sites may not have focused their efforts on the Year 2000 issue to the same degree. Thus the Company has an increased risk that its investigational sites, necessary for the conduct of clinical trials, will be unable to provide timely answers and data that it needs to perform services on time to its contractual clients. Also, the failure of the Company's customers to address the Year 2000 issue could negatively impact on their ability to use the Company's services. While contingency plans will be developed to address these risks, the Company cannot assure that those plans will sufficiently protect the Company from the effects of those risks. Any disruptions from the realization of any of these risks could adversely affect the Company's ability to perform its services. The Company estimates that the costs associated with its Year 2000 program will be approximately $ 0.5 million, including costs already incurred. Total Year 2000 costs of approximately $0.3 million have been incurred by the Company through March 31, 1999. The estimates of cost, timing and impact of addressing the Year 2000 issue are based on numerous assumptions of future events, including the continued availability of certain resources, the ability of the Company to meet its deadlines and the cooperation of third parties. However, there can be no guarantee that the assumptions will be correct and that these estimates will be achieved. Actual results could differ significantly from those expected by the Company. Inflation The Company believes the effects of inflation generally do not have a material adverse effect on its results of operations or financial condition. Cautionary Statement for Forward-Looking Information. Statements included in Management's Discussion and Analysis of Financial Condition and Results of Operations set forth above may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technology development, market demand and the Company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues of the sponsoring client. Further information on potential factors that could affect the Company's financial results can be found in the Company's S-1 Registration Statement and its Reports on Form 10-K and 10-Q filed with the Securities and Exchange Commission. Item 3. Qualitative and Quantitative Disclosures About Market Risk The Company's primary financial market risks include fluctuations in interest rates and currency exchange rates. There have been no significant changes since December 31, 1998. 11 Part II. Other Information Item 2. Changes in Securities and Use of Proceeds (1) Effective Date of Securities Act Registration Statement: February 3, 1997 registration No.: 333-17001 (2) Offering Date: February 4, 1997 (3) Not Applicable (4) (i) The offering terminated after all shares registered were sold (ii) Managing Underwriters: Montgomery Securities Furman Selz Genesis Merchant Group (iii) Class of Securities Registered: Common Stock
(iv) Account of Company Account of Selling Shareholder ------------------ ------------------------------ Amount Registered 2,206,250 common stock 956,250 common stock Aggregate price of Amount Registered $37,506,250 $16,256,250 Amount Sold 2,206,250 956,250 Aggregate Offering Price of Amount Sold $37,506,250 16,256,250 (v) Expenses of offering for account of the Company: Underwriting Discount and Commission $2,625,437 Other expenses $698,813 Total Expenses $3,324,250 (A) There were no direct or indirect payments to directors, officers, general partners of the issuer or their associates; to persons owning ten (10) percent or more of common stock of the Company; or affiliates of the Company. (B) All of the above payments were direct or indirect payments to others not described in clause (A). (vi) Net Offering Proceeds to the Company: $34,182,000 (vii) Use of Proceeds as of March 31, 1999: Net cash paid for business acquisition: 8,655,000 Net cash paid for minority equity investment 1,000,000 Purchase of Equipment: 5,772,000 Working Capital: 3,919,000 Temporary Investments (consisting of short-term, Investment-grade securities): 6,068,000 All of the above payments were to others not described in item (v) (A) above. (viii) The use of proceeds is consistent with the Prospectus
12 Item 6. Exhibits and Reports on Form 8-K a.) Exhibits 10.24 Consulting agreement between AmericasDoctor.com, Inc. and Premier Research Worldwide 27.0 Financial Data Schedule b.) Reports on Form 8-K None 13 Signatures Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PREMIER RESEARCH WORLDWIDE, LTD. (Registrant) Date: May 17, 1999 By: /s/ Joel Morganroth ----------------------------------- Joel Morganroth, MD Chief Executive Officer Date: May 17, 1999 By: /s/ Fred M. Powell ----------------------------------- Fred M. Powell Chief Financial Officer (Principal Financial and Accounting Officer) 14 The following exhibits are filed herewith, unless otherwise marked: 10.24 Consulting Agreement between AmericasDoctor.com, Inc. and Premier Research (filed herewith) 27.0 Financial Data Schedule (filed herewith) EX-10.24 2 EXHIBIT 10.24 MARKETING SERVICE AGREEMENT THIS MARKETING SERVICE AGREEMENT (the "Marketing Agreement"), is made this ____ day of March, 1999 (the "Effective Date"), by and between PREMIER RESEARCH WORLDWIDE, LTD., a Delaware corporation with its principal place of business located at 30 South 17th Street, Philadelphia, PA 19103 (referred to herein as "PRWW") and AMERICA'S DOCTOR, INC., a Delaware corporation with its principal place of business located at 11403 Cronridge Drive, Suite 200, Owings Mills, MD 21117 (referred to herein as "AD"). WHEREAS, PRWW and AD entered into a Stock Purchase Agreement, dated July 2, 1998, and a Support and Service Agreement on July 2, 1998, as amended from time to time (the "Support and Service Agreement"); WHEREAS, AD desires to market AD's services regarding obtaining subjects for clinical trials for third parties, including contract research organizations ("CRO's") and pharmaceutical companies; WHEREAS, PRWW has specialized expertise in obtaining and marketing subjects in clinical trials; and WHEREAS, AD acknowledges that PRWW's specialized expertise is not readily available in the marketplace and will add great value to AD; WHEREAS, PRWW desires to assist AD in the marketing of AD's services to such third parties by, among other things, providing AD with education and training on how to obtain and market subjects for clinical trials; NOW THEREFORE, intending to be legally bound, the parties hereto agree as follows: 1. Recitals. The abovementioned recitals are incorporated as if fully set forth herein. 2. Term. The term of this Marketing Agreement shall be deemed to have commenced on January l, 1999 (the "Effective Date") and expire on December 31, 2000. 3. PRWW Marketing Services. Whereas, AD desires to determine the commercial feasibility of recruiting candidates for clinical trials and marketing said candidates to pharmaceutical, biotechnology and medical device companies and clinical/contract research organizations (CRO). In consideration of AD's use of potential clinical trial candidate data supplied to PRWW and for PRWW's services, as defined below, supplied in support of AD's test of commercial feasibility, AD agrees to pay PRWW in accordance with the amounts set forth in paragraph 4. 1 Within ninety days of expiration of this agreement, AD can elect to purchase PRWW's exclusive right to patient data, as set forth in the Support and Service Agreement, section 4, for an additional sum of $200,000 as specified in paragraph 4. 3.1 Scope of Service. PRWW and specifically, the CEO of PRWW (or other officer(s) of PRWW mutually agreed upon by AD and PRWW), shall consult with and provide marketing services to the Board of Directors and the officers of AD, at reasonable times, concerning matters pertaining to the marketing of AD's services to CRO's and other third parties interested in recruitment, quantification and qualification of volunteers for clinical/medical studies (the "PRWW Marketing Services"). PRWW's Marketing Services to AD shall include, but not be limited to the following duties and functions: (i) educate and train AD officers, employees and representatives about volunteer and patient recruitment and marketing techniques for volunteer and patient recruitment; (ii) impart personal expertise and knowledge as to the workings of CRO and pharmaceutical organizations with regard to the recruitment, quantification and qualification of volunteers for clinical/medical studies; (iii) reasonably make available the resources of PRWW to AD's marketing efforts to other CRO's and pharmaceutical companies; (iv) accompany representatives of AD on marketing and sales presentations; (v) use its best efforts to introduce AD to CRO's and pharmaceutical companies; (vi) assist in determining appropriate pricing levels for AD's products and services; and (vii) any other marketing/sales related activities reasonably requested by AD or its Directors. PRWW's Marketing Services shall not be required to exceed two hundred (200) hours for each three (3) month calendar period under this Marketing Agreement. In addition, AD shall use its best efforts to provide PRWW with timely notification of when the PRWW Marketing Services will be required. PRWW and its representatives shall not represent AD, AD's Board of Directors, AD's officers or any other member of AD in any transaction or communication nor shall PRWW and its representatives make claim to do so, unless authorized by AD, its officers or its Directors. During the term of this agreement, Sections 4.1, 4.2, and 4.3 of the Support and Service Agreement shall be deleted in their entirety and replaced with the following: "4.1 AD may provide similar solicitation, quantification, recruitment or other services as those provided to PRWW pursuant to this Agreement to any other person or entity at AD's sole discretion. 2 4.2 AD may contract with other CRO's (or any other person or entity with an interest in volunteer recruitment, solicitation or qualification) in any manner whatsoever, at AD's sole discretion, provided that AD does not materially interfere with the Services granted to PRWW. PRWW agrees that there is no material interference provided that PRWW has the right to solicit, quantify, qualify and recruit volunteers for its studies pursuant to Section 3.2 of the Support and Service Agreement as amended. Specifically, AD may provide the Services to PRWW while simultaneously providing the same or similar recruitment, quantification or qualification services to a third party, regardless of whether such same or similar services conflict in whole or in part with the provision of the Services to PRWW. For example, if AD has contracted with a CRO to provide recruits for a study that conflicts with either: (a) a study ongoing by PRWW; or (b) a study to be commenced by PRWW, in either case, AD shall provide both PRWW and the other CRO with the right to solicit, quantify and recruit patients simultaneously. 4.3 All materials, documents, volunteer data, and other information provided to PRWW by AD during the course of this Agreement shall be deemed to be, between AD and PRWW, confidential information ("Information") which shall be owned by AD. Upon termination of this Agreement, PRWW may retain all Information provided to PRWW by AD pursuant to Section 3.1 hereunder provided that PRWW may only use such Information for the express purpose of recruitment of volunteers for studies in which PRWW participates and for which PRWW properly notified AD pursuant to Section 3.2 of the Agreement. During the Term of this Agreement PRWW may only use the Information for the express purpose of recruitment of volunteers for studies in which PRWW participates and for which PRWW properly notified AD pursuant to Section 3.2 of the Agreement. PRWW shall be liable for any unauthorized use or disclosure of the Information by PRWW's employees which could have reasonably been prevented by PRWW." 3 4. Fee. AD shall pay PRWW a total fee of Four Million Six Hundred Thousand Dollars ($4,600,000) in installments of Five Hundred Seventy Five Thousand Dollars ($575,000) per three (3) month calendar period (the "Fee") with an additional $200,000 due upon AD's decision to purchase PRWW's exclusive right to patient data. The payment schedule shall be as follows and there shall be a five (5) day grace period for all payments: a. $575,000 due on March 15, 1999 (for the three month period commencing January 1, 1999); b. $575,000 due on June 15, 1999 (for the three month period commencing April 1, 1999); c. $575,000 due on September 15, 1999 (for the three month period commencing July 1, 1999); d. $575,000 due on December 15, 1999 (for the three month period commencing October 1, 1999); e. $575,000 due on March 15, 2000 (for the three month period commencing January 1, 2000); f. $575,000 due on June 15, 2000 (for the three month period commencing April 1, 2000); g. $575,000 due on September 15, 2000 (for the three month period commencing July 1, 2000); h. $575,000 due on December 15, 2000 (for the three month period commencing October 1, 2000). i. $200,000 due on or before the expiration of this agreement, contingent upon AD decision to purchase PRWW's exclusive right to patient data. 5. Relationship of the parties. The parties are independent contractors. Nothing in this Marketing Agreement or in the activities contemplated by the parties pursuant to this Marketing Agreement shall be deemed to create an agency, partnership, employment or joint venture relationship between the parties. Each party shall be deemed to be acting solely on its own behalf and, except as expressly stated, has no authority to pledge the credit of, or incur obligations or perform any acts or make any statements on behalf of, the other party. Neither party shall represent to any person or permit any person to act upon the belief that it has any such authority from the other party. Neither party's officers or employees, agents or contractors shall be deemed officers, employees, agents or contractors of the other party for any purpose. 4 6. Information. In connection with this Marketing Agreement, AD and its Directors, officers and representatives will furnish PRWW and its representatives with data, material and information concerning AD (the "Information") which PRWW reasonably requests or is necessary for the performance by PRWW hereunder. PRWW agrees that any Information received by PRWW or its representatives during any furtherance of PRWW's obligations hereunder will be treated by PRWW in full confidence and will not be revealed to any other person, firm, organizations or entity except to PRWW's agents, employees, and representatives in connection with the PRWW Marketing Services to be performed on behalf of AD: (i) who will be informed of the confidential nature of the Information; and (ii) who will treat such Information in full confidence and shall not reveal any Information to any other person, firm, organization or entity. PRWW shall be responsible for any breach of this provision by any of its agents, employees or representatives. 7. Termination. AD may terminate this agreement by giving one hundred eighty (180) days written notice to PRWW. Upon AD's termination of this agreement, the exclusive patient data revert back to PRWW pursuant to the Support and Service Agreement between PRWW and AD, dated July 2, 1998, 8. Termination for Cause/Liquidated Damages. In the event that AD fails to make any or all payments due under Section 4 above within forty-five (45) days of when such payment(s) is due, then PRWW may terminate this Marketing Agreement for cause by notifying AD of such termination in writing. In the event this Marketing Agreement is terminated by PRWW for cause as provided in this Section 8, AD shall pay liquidated damages to PRWW in an amount equal to the actual amount due at the time of termination by PRWW plus and amount equal to the fees which would have been earned over the next two calendar quarters. 9. Trademarks. Nothing herein confers or shall confer upon PRWW any right, title or interest in any goodwill, trademark, trade name, service mark, brand name, knowledge or credibility of AD. PRWW acknowledges that all such interests are the exclusive property of AD. PRWW shall not utilize any goodwill, trademark, service mark, trade name, brand name, knowledge or credibility of AD without prior written consent of AD and shall not assert any claim of ownership or right to same. 5 10. Indemnification. Each party hereto shall indemnify and hold the other party and its directors, officers, employees, agents, subsidiaries, parents, affiliates, consultants and subcontractors (all "Associates") harmless from any claim, liability, loss, damages or expense, together with all reasonable costs and expenses relating thereto, including reasonable attorneys' fees, resulting from the negligent, reckless or willful acts or omissions of such party or its Associates in connection with the providing of the PRWW Marketing Services hereunder. Each party hereto shall indemnify and hold the other party and its directors, officers, employees, agents, subsidiaries, parents, affiliates, consultants and subcontractors (all "Associates") harmless from any claim, liability, loss, damages or expense, together with all reasonable costs and expenses relating thereto, including reasonable attorneys' fees, arising out of or resulting from any breach of any representation, warranty, covenant or obligation of such party contained in this Marketing Agreement herein. 11. Survival. The parties respective rights and obligations under Sections 4 ("Fee"), 6 ("Information'), 8 ("Trademarks') and 9 ("Indemnification") shall survive any expiration or termination of this Marketing Agreement. 12. Representations by PRWW. PRWW represents, warrants, covenants and agrees that the PRWW Marketing Services shall be furnished and in all respects provided in conformance and compliance with applicable laws. PRWW represents and warrants that it has the authority to enter into this Marketing Agreement and the right to provide the PRWW Marketing Services to AD hereunder without breach of any obligation to any other third party, and that its performance under this Marketing Agreement will not breach any contract, agreement, rule, law or regulation of whatever nature. 13. Representations by AD. AD represents and warrants that it has the authority to enter into this Marketing Agreement without breach of any obligation to any other third party, and that its performance under this Marketing Agreement will not breach any contract, agreement, rule, law or regulation of whatever nature. 14. Entire Agreement/Amendments. This Marketing Agreement constitutes the entire agreement between the parties and supersedes and takes precedence over all prior agreement or understandings, whether oral or written, between the parties. This Marketing Agreement shall not be construed to govern any other transactions between AD and PRWW. No changes, amendments or modifications of any of the terms or conditions of this Agreement shall be valid unless made by an instrument in writing signed by both parties. 15. Assignment. Neither party shall assign any of its rights nor delegate any of its obligations under this Agreement without the prior written consent of the other party; however, PRWW may assign its rights under this Agreement to any successor to PRWW by merger or consolidation or any person or entity which acquires substantially all of the assets and business of PRWW, which assignee shall assume PRWW's duties and obligations hereunder. 6 16. Arbitration. Any controversy or claim arising out of or relating to this Marketing Agreement, or the breach thereof, shall be settled by arbitration in accordance of the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) shall be entered in any court having jurisdiction thereof. For that purpose, the parties hereto consent to the jurisdiction and venue of an appropriate court located in the State of Maryland. The parties acknowledge that in no event shall the aggregate contribution of the other party, its agents, members, employees, and affiliates of each, collectively exceed the amount of the Fee provided in Section 4 of this Marketing Agreement. 17. Miscellaneous. 17.1 This Marketing Agreement shall be governed by and construed in accordance with the laws of the State of Maryland without regard to conflict of law principles. 17.2 Section heading are included for convenience only and are not to be used to construe or interpret this Agreement. 17.3 Whenever this Marketing Agreement requires either party's approval, consent or satisfaction, the response shall not be unreasonably or arbitrarily withheld or delayed. 17.4 The failure of either party to object to, or to take affirmative action with respect to, any conduct of the other party that violates any term or condition of this Marketing Agreement shall be limited to that particular instance, and shall not be construed as a waiver of that party's right for such breach or as a waiver of such remedies for future breaches by the other party. 17.5 If any provision of this Marketing Agreement becomes unlawful or unenforceable in any jurisdiction, such provision shall be ineffective only to the extent of such invalidity or enforceability without invalidating the remaining provisions of this Marketing Agreement, and any such invalidity or unenforceability in any jurisdiction shall not invalidate such provision or render it unenforceable in any other jurisdiction. 17.6 This Marketing Agreement may be executed by the parties in one or more counterparts; each of which when so executed shall be an original, but all such counterparts shall constitute one and the same instrument. 17.7 All pronouns and words shall be read in appropriate number and gender; the masculine, feminine and neuter shall be interpreted interchangeably; and the singular shall include the plural and vice versa, as the circumstances may require. 7 17.8 The parties hereto represent that they have carefully read the foregoing Marketing Agreement, understood its terms, had the opportunity to consult with an attorney of their choice, and voluntarily signed the same as their own free act with the intent to be legally bound thereby. The parties acknowledge that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereto. The terms of this Marketing Agreement are contractual and not a mere recital. 17.9 Notices and other communications shall be transmitted in writing by certified U.S. Mail, postage prepaid, return receipt requested or by overnight courier, addressed to the parties at the address first set forth above. Such notices and communications shall be deemed effective four (4) days after the date of mailing or upon receipt as evidenced by the U.S. Postal Service return receipt cards, whichever is earlier, or upon receipt if sent by overnight courier. (CONTINUED NEXT PAGE) 8 IN WITNESS WHEREOF, the parties hereto have caused this Marketing Agreement to be duly executed as of the date first above-written, such parties acting by their representatives being thereunto duly authorized. PREMIER RESEARCH WORLDWIDE, LTD. - -------------------------------- By: Joel Morganroth, CEO AMERICA'S DOCTOR, INC. /s/ Scott M. Rifkin - --------------------------------- By: Scott M. Rifkin, CEO EX-27 3 FINANCIAL DATA SCHEDULE
5 0001026650 PREMIER RESEARCH WORLDWIDE 1000 US$ 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 1.00 8,769 6,068 12,555 (272) 0 28,621 12,620 8,032 39,665 8,264 0 0 0 72 31,329 39,665 0 9,509 0 4,707 4,253 0 0 697 279 0 0 0 0 418 0.06 0.06
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