UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
REPORT PURSUANT TO SECTION 13 OR 15(d)OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) August 31, 1994
NATIONAL PATENT DEVELOPMENT CORPORATION
(Exact name of Registrant as Specified in its Charter)
Delaware 1-7234 13-1926739
(State or other jurisdiction (Commission File (IRS Employer
of incorporation or Number) Identification
organization) Number)
9 West 57th Street, New York, NY 10019
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (212) 826-8500
Item 2 Acquisition or Disposition of Assets
On August 31, 1994, General Physics Corporation ("GPC")
acquired substantially all of the operations and assets of GPS
Technologies, Inc. ("GPST") and assumed certain liabilities of
GPST, related to its business of providing management and
technical training services, and specialized engineering
consulting services, to various commercial industries and to the
United States government. However, for accounting and financial
reporting purposes, the transaction will be treated as a reverse
acquisition of GPC by GPST since, among other factors, National
Patent Development Corporation (the "Company"), the beneficial
owner of approximately 92% of GPST's outstanding common stock,
became the beneficial owner of approximately 53% of the
outstanding shares of GPC's common stock as a result of the
transaction. The acquired assets also included all of the
outstanding common stock of four wholly-owned subsidiaries of
GPST: GPS Technologies, Inc. Federal Systems Group ("GPSTFSG"),
which provides technical services to the U.S. Department of the
Navy and other federal government agencies; GP Environmental
Services, Inc. ("GPES"), which provides environmental laboratory
analytical services; and General Physics Asia Pte. Ltd., located
in Singapore, and General Physics (Malaysia) Sdn. Bhd., located
in Malaysia, which provide operations support, engineering and
technical services to power and process industries in Southeast
Asia.
The consideration paid by GPC totalled approximately
$36,000,000 and consisted of (a) $10,000,000 in cash, (b)
3,500,000 shares of GPC common stock, (valued at $3 7/8 per
share; the closing price on August 31, 1994 was $3 per share),
(c) GPC's 6% Senior Subordinated Debentures due 2004 in the
aggregate principal amount of $15,000,000 ($1,500,000 of which
was paid into escrow), (valued at $10,700,000 after a $4,300,000
discount), (d) warrants to purchase an aggregate of 1,000,000
shares of GPC common stock at $6.00 per share, and (e) warrants
to purchase an aggregate of 475,664 shares of GPC common stock at
$7.00 per share (the $6 and $7 per share warrants collectively
being valued at $1,737,000). In addition, GPC entered into a
lease with GPST of certain fixed assets of GPST for a period of
10 years for an aggregate rent of $2,000,000, payable in equal
quarterly installments of $50,000. The amount of consideration
paid for the assets of GPST was determined as a result of arms
length negotiations between the financial and legal advisors
representing a Special Committee of the Board of Directors of GPC
and representatives of the Board of Directors of GPST. (The
Company owns approximately 92% of the outstanding common stock of
GPST.) Legg Mason Wood Walker Incorporated, the financial
advisor to the Special Committee, rendered its opinion as to the
fairness of the consideration in the transaction, from a
financial point of view, to the stockholders of GPC. The
Special Committee, GPC's Board of Directors and GPST's Board of
Directors unanimously approved the Asset Purchase Agreement,
dated as of April 7, 1994, among GPC, GPST and the Company, and
unanimously recommended the transaction to GPC's stockholders,
who approved the transaction at GPC's Annual Meeting of
Stockholders on August 29, 1994.
The cash portion of the purchase price for the GPST
operations and assets was derived from funds borrowed by GPC
under a $20,000,000 revolving credit facility secured by liens on
the assets of GPC, GPSTFSG, GPES and Inventory Management
Corporation, all wholly-owned subsidiaries of GPC. The revolving
credit facility was established with NationsBank, National
Association ("NationsBank") on August 31, 1994, and permits GPC
to borrow funds at a rate of interest equal to NationsBank's
prime rate (7 3/4% on August 31, 1994) or LIBOR plus 2.5% as
determined by GPC.
Prior to the transaction, the Company directly and
indirectly owned approximately 28% of the outstanding common
stock of GPC, and approximately 92% of the outstanding common
stock of GPST. As a result of the transaction, the Company
directly or indirectly owns approximately 53% of the outstanding
common stock of GPC. Jerome I. Feldman, Martin M. Pollak, Scott
N. Greenberg and Ogden R. Reid are directors of GPC, the Company
and GPST. (The Special Committee consisted of three directors of
GPC who were not officers or employees of GPC and were not
officers, employees or directors of GPST or the Company.)
The acquired operations and assets were used by GPST
primarily in its business of management and technical training
services, and specialized engineering consulting services, to
various commercial industries and to the United States
government. GPC intends to use such assets in carrying-on such
business.
Item 7 Financial Statements and Exhibits
(a) Financial Statements of businesses acquired - At
the present time it is impracticable to file financial statements
required by this item. However, such statements will be filed
not later than 60 days.
(b) Proforma Financial Information - At the present
time it is impracticable to file proforma financial information
required by this item. However, such statements will be filed
not later than 60 days.
(c) Exhibits
2.1 Asset Purchase Agreement, dated as of April
7, 1994, among GPS Technologies, Inc., National Patent
Development Corporation and General Physics Corporation (filed as
Exhibit 2.1 to the Registration Statement on Form S-4
[Registration No. 33-77876]) is hereby incorporated by reference
herein.
SIGNATURE
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.
NATIONAL PATENT DEVELOPMENT CORPORATION
(Registrant)
BY: Lawrence M. Gordon
Vice President and General Counsel
DATED: September 14, 1994