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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): November 14, 2005
Health Fitness Corporation
(Exact name of Registrant as Specified in its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
0-25064 41-1580506
(Commission File Number) (IRS Employer
Identification No.)
3600 American Boulevard W., Suite 560
Minneapolis, Minnesota 55431
(Address of Principal Executive Offices and Zip Code)
(952) 831-6830
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Effective November 14, 2005, Health Fitness Corporation (the "Company")
entered into a Securities Purchase Agreement with five accredited investors for
the sale of an aggregate of 1,000 shares of its Series B Convertible Preferred
Stock (the "Series B Stock"), at an aggregate purchase price of $10.2 million.
After selling commissions and expenses, the Company will receive net proceeds of
approximately $9.4 million. The Series B Stock will automatically convert into
approximately 5.1 million shares of Common Stock effective on the date the
Securities and Exchange Commission declares effective a registration statement
to be filed by the Company with respect to the 5.1 million shares of Common
Stock issued to the new investors. The registration statement is expected to
become effective no later than March 15, 2005. The Company also issued the
investors 5-year warrants (the "Warrants") to purchase approximately 1.5 million
shares of Common Stock for $2.40 per share, subject to customary weighted
--average anti-dilution adjustments. Shares issuable upon exercise of the
Warrants will also be included in the registration statement to be filed by the
Company.
The Company is required to file the registration statement with the
Securities and Exchange Commission within 60 days of the closing, to use its
best efforts to cause the Registration Statement to be declared effective under
the Securities Act of 1933 as promptly as possible after the filing thereof, but
in no event within 120 days of the closing, and to use its best efforts to keep
the registration statement continuously effective under the Securities Act until
all registrable securities covered by the registration statement have been sold
or are eligible to be sold without volume restrictions pursuant to Rule 144(k).
The Company anticipates using approximately $5.1 million of the net
proceeds from the issuance of the Series B Stock to redeem all of its
outstanding shares of Series A Convertible Preferred Stock, currently
convertible into approximately 2.2 million shares of Common Stock, together with
warrants that were issued in connection with the Series A Stock to purchase
approximately 1.3 million shares of Common Stock. The remainder of the gross
proceeds are expected to be used for working capital and to finance growth of
the Company's business.
Copies of the Securities Purchase Agreement, Registration Rights
Agreement and Form of Warrant attached hereto as Exhibits 10.1, 10.2 and 10.3,
respectively, and incorporated herein by reference.
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On November 16, 2005, the Company issued a press release announcing its
financial results for the three and nine month periods ended September 30, 2005.
The full text of the press release is set forth in Exhibit 99.1 attached hereto
and is incorporated in this Report as if fully set forth herein.
The information contained in this Item 2.02 and Exhibit 99.1 hereto
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, and shall not be incorporated by reference
into any registration statement pursuant to the Securities Act of 1933, as
amended, except as shall be expressly set forth by specific reference in such a
filing.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
Reference is made to Item 1.01 for information concerning the issuance
by the Company on November 14, 2005 of the Series B Stock and the Warrants,
which such securities were not registered under the Securities Act of 1933, as
amended. Such securities were offered and issued in reliance on the exemption
from registration provided by Section 4(2) and Rule 506 of Regulation D of such
Securities Act.
ITEM 3.03 MATERIAL CHANGE TO RIGHTS OF SECURITY HOLDERS.
The terms of the Series B Stock, set forth in the Certificate of
Designation, Preferences and rights of Series B Convertible Preferred Stock,
provided that the holders of the Series B Stock are entitled to receive, in
preference to holders of Common Stock, a 5% per annum dividend payable upon
conversion of the Series B Stock or upon a liquidation of the Company. Upon a
liquidation of the Company, of Designation, Preferences and rights of Series B
Convertible Preferred Stock, provided that the holders of the Series B Stock are
entitled to receive, in preference to holders of Common Stock, no less than
$10,200 per share (the original per share purchase price) of Series B Stock,
plus accrued, unpaid dividends.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
YEAR.
In connection with the sale of the Series B Stock as set forth in the
Securities Purchase Agreement, the Company's Board of Directors created the
Series B Stock on November 14, 2005 by filing a Certificate of Designation with
the Minnesota Secretary of State establishing the designations, number of
shares, preferences, voting powers and other rights and the restrictions and
limitations of the such Series . A copy of the Certificate of Designation is
attached hereto as Exhibit 4.1 and is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements: None.
(b) Pro forma financial information: None.
(c) Exhibits:
4.1 Certificate of Designation, Preferences and Rights
of Series B Convertible Preferred Stock
10.1 Securities Purchase Agreement, dated November 14, 2005
10.2 Registration Rights Agreement, dated November 14, 2005
10.3 Form of Warrant, dated November 14, 2005
99.1 Press Release, dated November 16, 2005
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 hereunto duly authorized.
HEALTH FITNESS CORPORATION
By /s/ Wesley Winnekins
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Date: November 16, 2005 Wesley Winnekins
Chief Financial Officer
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
HEALTH FITNESS CORPORATION
EXHIBIT INDEX TO FORM 8-K
Date of Report: Commission File No.:
November 14, 2005 0-25064
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HEALTH FITNESS CORPORATION
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Exhibit Number Description
4.1 Certificate of Designation, Preferences and Rights of Series B
Convertible Preferred Stock
10.1 Securities Purchase Agreement, dated November 14, 2005
10.2 Registration Rights Agreement, dated November 14, 2005
10.3 Form of Warrant, dated November 14, 2005
99.1 Press Release, dated November 16, 2005