-----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, Pfdo5bqOUGrPySU22W5kDMEfWYE2zw42n8mlLv9SDFhmePtlLx+mRNTADP0b1to+ kCsun0H3/NB8u8KRjilayg== 0001188112-06-001484.txt : 20060515 0001188112-06-001484.hdr.sgml : 20060515 20060515115430 ACCESSION NUMBER: 0001188112-06-001484 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20060515 DATE AS OF CHANGE: 20060515 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ETRIALS WORLDWIDE INC. CENTRAL INDEX KEY: 0001268904 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 200308891 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-79690 FILM NUMBER: 06838110 BUSINESS ADDRESS: STREET 1: 4000 AERIAL CENTER PARKWAY CITY: MORRISVILLE STATE: NC ZIP: 27560 BUSINESS PHONE: 919-653-3412 MAIL ADDRESS: STREET 1: 4000 AERIAL CENTER PARKWAY CITY: MORRISVILLE STATE: NC ZIP: 27560 FORMER COMPANY: FORMER CONFORMED NAME: CEA ACQUISITION CORP DATE OF NAME CHANGE: 20031103 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NAZEM FRED F CENTRAL INDEX KEY: 0001198686 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 645 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2123717900 SC 13D 1 t10161b_sc13d.htm SCHEDULE 13D Schedule 13D
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 13D
 
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
 
etrials Worldwide, Inc.
 (Name of Issuer)
 
 
Common Stock, par value $.0001 per share
 (Title of Class of Securities)

29786P 10 3
 (CUSIP Number)

 
with a copy to:
James F. Verdonik, Esq.
Daniels Daniels & Verdonik, P.A.
1822 N.C. Highway 54 East, Suite 200
Durham, North Carolina 27713
(919) 544-5444
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)


February 9, 2006
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule l3G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 
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PERSONS WHO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM
DISPLAYS A CURRENT VALID OMB CONTROL NUMBER.

 
1.
 
 
Names of Reporting  Person  Fred F. Nazem 
I.R.S. Identification Nos. of above persons (entities only):  
 
 
2.
 
Check the Appropriate Box if a Member of a Group (See Instructions):
(a) o
(b) o
 
3.
 
 
SEC Use Only
 
 
4.
 
 
Source of Funds (See Instructions):
 
PF
 
5.
 
 
Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e):
 
o
 
6.
 
 
Citizenship or Place of Organization:
 
United States of America
 
 
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
 
 
7. Sole Voting Power:  883,559 shares
 
8.  Shared Voting Power: 0
 
9. Sole Dispositive Power:  883,559 shares 
 
10.  Shared Dispositive Power:   0
 
 
11.
 
 
Aggregate Amount Beneficially Owned by Each Reporting Person:
883,559
 
12.
 
Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions): o
 
13.
 
 
Percent of Class Represented by Amount in Row (11):
 
7.0%
 
14.
 
 
Type of Reporting Person (See Instructions):
 
IN
 
 
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ITEM 1. SECURITY AND ISSUER

The class of equity securities to which this Statement on Schedule 13D relates is the common stock, par value $0.0001 per share (the "Common Stock"), of etrials Worldwide, Inc., a Delaware corporation (the "Issuer"). The principal executive office of the Issuer is 4000 Aerial Center Parkway, Morrisville, North Carolina 27560.

ITEM 2. IDENTITY AND BACKGROUND.

This Statement is being filed on behalf of Fred F. Nazem, whose business address is 345 Park Avenue South, New York City, NY 10016. Mr. Nazem possesses sole voting power with respect to the shares of the Issuer owned by him.

Mr. Nazem beneficially owns 561,852 shares of Common Stock of the Issuer and warrants to purchase an additional 321,707 shares of Common Stock of the Issuer.

During the past five years, Mr. Nazem has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

During the past five years, Mr. Nazem has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is not subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.


ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

The shares and warrants of the Issuer held by Mr. Nazem were issued as a result of a merger on February 9, 2006 (the “Merger”) in which the Issuer acquired all the stock of etrials Worldwide, Inc. (which was renamed etrials, Inc. after the Merger and is referred to as the “Subsidiary”) and in which the Issuer subsequently changed its name to etrials Worldwide, Inc.

Mr. Nazem acquired a portion of his securities in the Subsidiary in a merger with Araccel Corp. in January 2003; Mr. Nazem had invested approximately $550,000 of his personal funds in Arracel prior to its merger into the Subsidiary. During 2003, Mr. Nazem also invested approximately $158,000 of his personal funds in the Subsidiary. In addition, in 2005 Mr. Nazem exercised options to acquire shares of the Subsidiary, granted to him in connection with his service on the Subsidiary’s board of directors and for the provision of other services. Each of these options was granted with a fair market value exercise price and Mr. Nazem paid the Subsidiary approximately $140,000 from his personal funds in connection with the exercise of the options.


ITEM 4.  PURPOSE OF TRANSACTION

Mr. Nazem acquired the securities referred to above in Item 3 for investment purposes.

He may acquire additional securities from time to time in the open market or in private transactions.

At the date of this Statement, except as set forth in this Statement, the Mr. Nazem has no plans or proposals which would result in:

(a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer;

(b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries;

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(c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries;

(d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of the board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors;

(e) Any material change in the present capitalization or dividend policy of the Issuer;

(f) Any other material change in the Issuer's business or corporate structure;

(g) Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which ay impede the acquisition of control of the Issuer by any person;

(h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;

(i) A class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or

(j) Any action similar to any of those actions enumerated above.

The exceptions to the foregoing statements are (i) a Voting Agreement, (ii) the $7.00 Trigger Provisions, (iii) the Escrow Indemnification Provisions, and (iv) Lock-up Agreement, all as described below. Set forth below is a summary of these provisions. The agreements containing these provisions are listed in Item 7 of this Schedule and are incorporated herein by reference.

Voting Agreement

Mr. Nazem and other stockholders of the Issuer entered into a voting agreement dated as of August 22, 2005. The voting agreement provides that each party must vote for the respective designees of two groups of shareholders as directors of the Issuer until immediately following the election that will be held in 2007. The Issuer is obligated to provide for its Board of Directors to be comprised of seven members and to enable the election to the Board of Directors of the persons designated by the parties to the voting agreement.


Of the shares issued to Mr. Nazem in the Merger, 107,457 shares have been placed in escrow and will not be released unless and until prior to February 19, 2008 over a 20 consecutive trading day period (i) the weighted average price of the Issuer’s Common Stock is $7.00 or more, and (ii) the average daily trading volume is at least 25,000 shares (“$7.00 Trigger”). If the $7.00 Trigger is not met, these shares will be cancelled.


As the sole remedy for the obligation of the former stockholders of the Subsidiary to indemnify and hold harmless the Issuer for any damages, whether as a result of any third party claim or otherwise, and which arise as a result of or in connection with the breach of representations and warranties and agreements and covenants of the Subsidiary, for a period of eighteen months, 10% of the shares of Common Stock issued to Mr. Nazem upon consummation of the Merger are being held in escrow. These shares, or the “indemnification shares,” will be part of the shares held in escrow until the $7.00 Trigger (described above) is met; however, the indemnification shares will continue to be held in escrow for indemnification purposes even if the $7.00 Trigger is met within the first 18 months. Claims may be asserted once any damages exceed $200,000 and are indemnifiable only to the extent that damages
 
 
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exceed $200,000. Any indemnification payments shall be paid solely from the shares held back and shall be deemed to be an adjustment to the merger consideration. For purposes of satisfying an indemnification claim, shares of Issuer’s Common Stock will be valued at the average reported last sales price for the ten trading days ending on the last day prior to the day that the claim is paid.


In addition to the 180-day restriction on the sale of shares of Issuer’s Common Stock issued in the Merger, Mr. Nazem has entered into a lock-up agreement that provides that it will not sell or otherwise transfer any of the shares of Common Stock of the Issuer that it received in the Merger (but not any shares issued on exercise of the warrants of the Issuer it received in the Merger) until February 19, 2007, with 25% of the shares subject to the restriction to be released from the restriction six months after February 9, 2006, an additional 25% released from the restriction nine months after February 9, 2006 and 50% of the shares then subject to the restriction to be released from the restriction upon the redemption by the Issuer of the warrants issued to the public in its IPO. In addition, if any shares held by the Issuer’s insiders that were placed in escrow in connection with the IPO are released on an accelerated basis from such escrow (upon either liquidation of the Issuer or the consummation of a subsequent transaction resulting in the Issuer’s stockholders having the right to exchange their shares for cash or other securities), the shares subject to the lock-up agreement will be released from the restrictions on the same accelerated schedule.

The shares of the Issuer received in the Merger beneficially owned by InfoLogix are subject to the foregoing agreements as follows:

 
Lock-up
Shares
Escrow
Indemnification
Shares
 
 
Trigger Shares
561,852
56,185
107,457

The number of Escrow Indemnification Shares is a subset of the number of Trigger Shares

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

At May 8, 2006, Mr. Nazem beneficially owned an aggregate of 883,559 shares of Common Stock of the Issuer, which constitutes approximately 7.0% of the Issuer's outstanding shares of Common Stock (based upon 12,346,360 shares of Common Stock outstanding as of February 9, 2006 as set forth in the Issuer's Report on Form 8-K filed on February 9, 2006 and including considering warrants of Mr. Nazem to be outstanding but not considering warrants other persons to be outstanding). The beneficially-owned shares of Mr. Nazem consist of issued and outstanding shares of Common Stock of the Issuer and outstanding warrants as listed below.

 
 
 
Shares of Common Stock
Shares Issuable Upon
Exercise of Warrants
Exercisable at and
within 60 days after
May 8, 2006
561,852
321,707

Warrants

The Issuer warrants issued to Mr. Nazem in the Merger are identical to those issued by the Issuer in its IPO. They are exercisable at $5.00 per share until February 11, 2008 and are redeemable by the Issuer if the price of the Issuer’s common stock equals or exceeds $8.50 per share for a specified period of time. In addition to the rights given to the holders of the Issuer warrants by the terms of the warrants, the holders of Issuer’s warrants (but, with certain exceptions, not their transferees) will have the contractual right, in the event of a redemption of the warrants, to pay the exercise price by a “cashless exercise” pursuant to a formula set forth in the merger agreement.

 
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

Reference is made to the disclosure set forth in Items 3, 4 and 5 of this Statement, which disclosure is incorporated herein by reference.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

1. Merger Agreement, dated as of August 22, 2005, by and among the Issuer, etrials Acquisition, Inc., etrials Worldwide, Inc. and certain stockholders of etrials Worldwide, Inc. (incorporated by reference from Exhibit 10.1 of the Issuer's Current Report on Form 8-K dated August 22, 2005 and filed with the SEC on August 26, 2005).

2. Amendment to Agreement and Plan of Merger, dated as of October 31, 2005, among the Issuer, etrials Acquisition, Inc., etrials Worldwide, Inc. and certain stockholders of etrials Worldwide, Inc. (incorporated by reference from Exhibit 10.10 of the Issuer's Amendment No. 1 to Current Report on Form 8-K dated October 31, 2005 and filed with the SEC on November 3, 2005).

3. Amendment No. 2 to Agreement and Plan of Merger, dated as of October 31, 2005, among the Issuer, etrials Acquisition, Inc., etrial Worldwide, Inc. and certain stockholders of etrials Worldwide, Inc. (incorporated by reference from Exhibit 10.12 of the Issuer's Amendment No. 2 to Current Report on Form 8-K dated December 5, 2005 and filed with the SEC on December 8, 2005).

4. Voting Agreement, dated as of August 22, 2005, among the Issuer, certain stockholders of etrials Worldwide, Inc. and certain stockholders of the Issuer (incorporated by reference from Exhibit 10.2 of the Issuer's Current Report on Form 8-K dated August 22, 2005 and filed with the SEC on August 26, 2005).


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SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: May 15, 2006
                                        
Janet Raine, Individually

 /s/ Fred F. Nazem         
Fred F. Nazem
 

 

 

 

 

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