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): August 5, 1998
ISONICS CORPORATION
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
001-12531 77-0338561
(Commission File No.) (IRS Employer Identification No.)
4010 Moorpark Avenue, Suite 119
San Jose, California 95117
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (408) 260-0155
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This Current Report on Form 8-K contains forward looking statements that involve
risks and uncertainties relating to the acquisition by Isonics Corporation, a
California corporation ("Isonics"), of Chemotrade GmbH, a privately held company
("Chemotrade"), including the risks: inherent in acquiring a company in
Chemotrade's industry (e.g. assumption of known and unknown liabilities); that
the synergies expected to result from the acquisition described below might not
occur as anticipated; and that management's attention might be diverted from
day-to-day business activities. Actual results and developments may differ
materially from those described in this Current Report. For more information
about Isonics and risks relating to investing in Isonics, refer to Isonics' most
recent reports on Form 10-QSB and Registration Statement on Form SB-2, as
amended, Registration No. 333-13289.
Item 2. Acquisition or Disposition of Assets.
On July 21, 1998, Isonics' wholly owned German subsidiary, Des-Dur
Vermogensverwaltungs GmbH, acquired Chemotrade through the acquisition of all of
the outstanding capital stock of Chemotrade from Mr. Helmut Swyen and Mr.
Herbert Hegener (the "Sellers"). The acquisition was accomplished pursuant to a
Sale and Purchase Agreement dated as of May 29, 1998 and amended as of July 15,
1998 (the "Purchase Agreement"). In exchange for all of the outstanding capital
stock of Chemotrade on July 21, 1998, Isonics paid $758,700 in cash, issued
357,730 shares of its Common Stock and issued two notes to the Sellers, one for
$924,000 bearing interest at 2% per month due September 15, 1998, secured by
certain accounts receivable and a second note for $833,000 bearing interest at
10% per annum, due June 1, 1999. The shares of Isonics Common Stock issued in
the acquisition were issued pursuant to Regulation S under the Securities Act of
1933, as amended. Payment of the second note is contingent upon Chemotrade
meeting minimum pretax earnings as defined in the Purchase Agreement during the
sixteen months ending April 30, 1999 and twelve months ending April 30, 2000.
The Sellers will receive additional consideration of $278,000 in cash if minimum
pretax earnings as defined in the Purchase Agreement are met during the twelve
months ending April 30, 2001. The purchase price was arrived at through
arms-length negotiations. The total number of shares of Isonics Common Stock
issued in connection with the acquisition are being held in escrow to secure the
obligations of Chemotrade to indemnify Isonics for any breaches of the
representations and warranties of Chemotrade and to repay any shortfall of
earnings as defined for the periods ending April 30, 1999 and 2000. The
acquisition will be accounted for as a purchase.
In connection with the purchase of Chemotrade, Isonics also acquired seventy
five percent of the outstanding capital stock of Chemotrade GmbH, Leipzig.
Chemotrade is a supplier of stable and radioactive isotopes. Isonics currently
intends to maintain Chemotrade as a wholly-owned subsidiary and for Chemotrade
to continue to conduct its business as historically conducted.
A copy of the press release announcing the signing of the Purchase Agreement is
attached hereto as Exhibit 99.1 and incorporated by reference herein. A copy of
the press release announcing the consummation of the acquisition is attached
hereto as Exhibit 99.2 and incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
The Registrant believes that it would be impractical to provide
the required financial statements at the time this Report on Form
8-K is filed. The Registrant intends to file such financial
information as an amendment to this Form 8-K within 60 days of the
date hereof.
(b) Pro Forma Financial Information
The Registrant believes that it would be impractical to provide
the required pro forma financial information at the time this
Report on Form 8-K is filed. The Registrant intends to file such
financial information as an amendment to this Form 8-K within 60
days of the date hereof.
(c) Exhibits.
Exhibit No. Description
----------- -----------
2.1 Sale and Purchase Agreement, dated as of May 29, 1998, between
Isonics Corporation, a California corporation, and Herbert
Hegener and Helmut Swyen. Disclosure Schedule has been omitted as
permitted pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC"), but will be furnished
supplementally to the SEC upon request).
2.2 Purchase Agreement, dated as of July 15, 1998, between Isonics
Corporation, a California corporation, and Herbert Hegener and
Helmut Swyen.
99.1 Press release announcing the execution of the Purchase Agreement.
99.2 Press release announcing the consummation of the acquisition.
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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.
ISONICS CORPORATION
Dated: August 5, 1998 By: /s/ James Alexander
-------------- --- -------------------
James Alexander
President and Chief
Executive Officer
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1 Sale and Purchase Agreement, dated as of May 29, 1998, between
Isonics Corporation, a California corporation, and Herbert
Hegener and Helmut Swyen. Disclosure Schedule has been omitted as
permitted pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC"), but will be furnished
supplementally to the SEC upon request).
2.2 Purchase Agreement, dated as of July 15, 1998, between Isonics
Corporation, a California corporation, and Herbert Hegener and
Helmut Swyen.
99.1 Press release announcing the execution of the Purchase Agreement.
99.2 Press release announcing the consummation of the acquisition.