UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Commission
Date of report: January 26, 1996
ELECTRIC & GAS TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
TEXAS 0-14754 75-0259192
(State or other juris- (Commission file)
I.R.S. Employer Identif-
dicition of incorporation
ication No.)
or organization)
13636 Neutron Road, Dallas, Texas 75244-4410
(Address of principal executive offices, including zip code)
Registrant telephone number (including area code) (214) 934-8797
_________________________________________________________________
_____________
Current report on Form 8-K
Page 1
FORM 8-K
ELECTRIC & GAS TECHNOLOGY, INC.
Item 2. Acquisition or Disposition of Assets.
Electric & Gas Technology, Inc. ("ELGT") signed a "Letter of
Intent" to acquire 80% of a privately owned company, Cooper
Manufacturing Corporation ("Cooper") in exchange for preferred
stock of ELGT valued at approximately $2,000,000 from two
individuals who had recently acquired Cooper from Allied Products
Corporation ("Allied"). On September 23, 1995, such Letter of
Intent was amended to permit the parties in reaching a definitive
purchase and sales agreement by December 31, 1995. The
additional time was needed to complete an adequate investigation
of Cooper's current financial and business status. ELGT and its
affiliate agreed to arrange for interim financing and to help
establish a line of credit for Cooper with a bank during this due
diligence period. Allied, the former unaffiliated owner of
Cooper was owed approximately $1,000,000 by Cooper and was
personally guaranteed by the two individual owners. The Allied
note was secured by all the assets of Cooper and a pledge of 100%
of the believed to be outstanding stock of Cooper.
During the due diligence period, ELGT became aware of
numerous problems, inaccurate information, undisclosed creditors
and others who allege were sold a portion Cooper's common stock.
Based on these mounting adverse disclosures, ELGT in order to
protect itself and its affiliates investment and advances to
Cooper, entered into a "Note Purchase Agreement" with Allied. On
December 15, 1995, ELGT closed on the Note Purchase Agreement
with Allied, thereby obtaining Allied's right, title and interest
in and to the Promissory Note and all security existing therefor
and obligation of Cooper under this note and the Facility
Agreement formerly executed by Cooper and its shareholders in
exchange for $100,0000 in cash and a newly issued, 90,000 shares
of, Series A, $10.00 par value, Preferred stock of ELGT. The
promissory note was due on December 31, 1995 and demand for
payment was made on Cooper and its guarantors.
The individuals who's stock was pledged and who personally
guaranteed the Allied Note, petitioned the court on behalf of
Cooper to file for protection under the U.S. Bankruptcy laws in a
Houston, Texas court. A hearing was held on January 17, 1996 and
reconvened on January 19, 1996 in which the court deferred any
decision pending settlement negotiations between the parties.
ELGT believes the filing was improper as those individuals who
petitioned the court as debtors in possession did not have
standing for such petition. Although the outcome of any
bankruptcy proceeding cannot be determined, ELGT believes it has
the only secured creditor position and first rights to the assets
2
of Cooper. Further, ELGT and its affiliate believes they will
recover their investment and advances to Cooper and secure
ownership of Cooper for the future.
3
Item 7. Financial Statements and Exhibits.
4.7 Resolution Designating and Specifying
Preference and Rights of Series A, 7%
Convertible Preferred Stock.
10.35 Letter of Intent and amendment
thereto, between Electric & Gas
Technology, Inc. and Messrs.
Kenneth Brown and Joe Poe.
10.36 Note Purchase Agreement, between
Electric & Gas Technology, Inc. and
Allied Products Corporation.
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.
ELECTRIC & GAS TECHNOLOGY,
INC.
By: /s/ Edmund W. Bailey
Edmund W. Bailey
Vice President and CFO
Date: January 26, 1996
4
INDEX TO EXHIBIT
Sequentially
Number
Exhibit No. Description Page
4.7 Resolution Designating and Specifying Preference and
1-9
Rights of Series A, 7% Convertible Preferred Stock.
10.35 Letter of Intent and amendment thereto, between
10-14
Electric & Gas Technology, Inc. and Messrs. Kenneth
Brown and Joe Poe.
10.36 Note Purchase Agreement, between Electric & Gas
15-21
Technology, Inc. and Allied Products Corporation.
5