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): January 30, 1997
ROMTECH, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-27102 23-2694937
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State or other juris- Commission IRS Employee
diction of incorporation File Number Identification No.
2000 Cabot Blvd. West, Suite 110, Langhorne, PA 19047-1833
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Address of principal executive offices zip code
(215) 750-6606
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Registrant's telephone number, including area code
5. Other events
On January 30, 1997, RomTech, Inc. (the "Company") completed a private
offering to accredited investors of 1,271,340 shares of Class Two Convertible
Preferred Stock (the "Convertible Preferred Stock"), without par value, and
355,975 Common Stock Purchase Warrants (the "Warrants") to purchase 355,975
shares of the Company's Common Stock, without par value (the "Common Stock"),
for an aggregate purchase price of $1,271,340. The private offering is exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act") pursuant to Regulation D under the Act. Neither the Convertible
Preferred Stock nor the Warrants have been registered under the Act and may not
be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Act and applicable state
securities laws.
The Convertible Preferred Stock is convertible at the option of the
holder beginning six months following the date of issuance into the number of
shares of Common Stock equal to the number of shares of Convertible Preferred
Stock surrendered for conversion divided by the conversion price, which will be
the lower of (i) $5.00 or (ii) ninety percent (90%) of the average of the
closing bid price of the Company's Common Stock on the Nasdaq SmallCap Market,
or the primary securities exchange on which the Common Stock is then quoted, for
the 10 business days immediately preceding the date on which the Securities and
Exchange Commission declares effective the registration statement filed by the
Company under Section 5 of the Securities Act of 1933, as amended, pursuant to
the Registration Rights Agreement between the Company and the purchasers of the
Convertible Preferred Stock.
Each Warrant entitles the holder to purchase one share of Common Stock
at any time during the period beginning six (6) months after the date of
issuance of the Warrant until five years after the date of issuance at a price
equal to the lesser of (i) $6.25 or (ii) the average of the closing bid price of
the Company's Common Stock on the Nasdaq SmallCap Market, or the primary
securities exchange on which the Common Stock is then quoted, plus $1.25, for
the 10 business days immediately preceding the date on which the Securities and
Exchange Commission declares effective the registration statement filed by the
Company under Section 5 of the Securities Act of 1933, as amended, pursuant to
the Registration Rights Agreement between the Company and the purchasers of the
Convertible Preferred Stock.
The holders of the Convertible Preferred Stock and the Warrants are
entitled to certain registration rights pursuant to a Registration Rights
Agreement, which provides that within 120 days after the date of issuance of the
Convertible Preferred Stock, the Company will file with the Commission a shelf
registration statement (the "Registration Statement") covering resales by
holders of the Common stock issuable upon conversion of the Convertible
Preferred Stock and upon exercise of the Warrants. The Company will use its best
efforts to cause the registration statement to become effective as promptly as
is practicable and to keep the registration statement effective for two (2)
years from the date of issuance of the Convertible Preferred Stock. The Company
will pay all expenses of the registration statement.
2. Financial Statements and Exhibits.
(a) Financial Statements.
Not applicable.
(b) Pro Forma Financial Statements.
(i) Consolidated Unaudited Pro Forma Balance Sheet and Statement of
Operations.
(c) Exhibits.
*4.1 Certificate of Designation, Preferences, Powers, Rights and Number
of Shares of Class Two Convertible Preferred Stock (Exhibit 4.1)
*4.2 Form of Purchase Agreement dated as of November 15, 1996
(Exhibit 4.2)
*4.3 Form of Warrant Agreement dated as of November 15, 1996
(Exhibit 4.3)
*4.4 Form of Registration Rights Agreement dated as of November 15,
1996 (Exhibit 4.4)
*4.5 Form of Agreement dated as of November 15, 1996 (Exhibit 4.5)
4.6 Purchase Agreement dated January 30, 1997 between RomTech, Inc.
and Odyssey Capital Group, L.P.
4.7 Agreement dated January 30, 1997 between RomTech, Inc. and
Odyssey Capital Group, L.P.
4.8 Registration Rights Agreement dated January 30, 1997 between
RomTech, Inc. and Odyssey Capital Group, L.P.
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*Incorporated by reference to RomTech, Inc.'s Form 8-K dated November 27, 1996.
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.
ROMTECH, INC.
Date: February 4, 1997 By: /s/ Gerald W. Klein
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Gerald W. Klein, Vice President and
Chief Financial Officer
RomTech, Inc.
Consolidated Pro Forma Balance Sheet
(Unaudited)
December 31, December 31,
1996 1996
Unadjusted Adjustments As Adjusted
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ASSETS
Current assets:
Cash and cash equivalents $ 820,960 $ 28,000 a $ 848,960
Restricted cash 14,788 14,788
Short term investments - -
Accounts receivable, net of allowance $92,971 927,653 927,653
Inventory 337,307 337,307
Prepaid expenses 502,695 502,695
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Total current assets 2,603,403 28,000 2,631,403
Furniture and equipment, net 194,006 194,006
Other assets 153,685 153,685
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Total assets $ 2,951,094 $ 28,000 $ 2,979,094
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 338,192 $ (200,000)b $ 138,192
Accounts payable 773,643 773,643
Accrued expenses 504,086 504,086
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Total current liabilities 1,615,921 (200,000) 1,415,921
Capital lease obligations net of current portion 60,226 60,226
Notes payable-long term portion 305,992 305,992
Convertible subordinated debt 150,000 150,000
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Total liabilities 2,132,139 (200,000) 1,932,139
Stockholders' equity:
Convertible preferred stock 2,143,340 128,000 a,b 2,271,340
Common stock, no par value (40,000,000 shares authorized;
6,483,815 issued and outstanding) 4,217,517 99,344 b 4,316,861
Additional paid in capital 704,738 656 b 705,394
Accumulated deficit (6,246,640) (6,246,640)
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Total stockholders' equity 818,955 228,000 1,046,955
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Total liabilities and stockholders' equity $ 2,951,094 $ 28,000 $ 2,979,094
================= ================== ==================
See accompanying notes to consolidated pro forma financial statements.
RomTech, Inc.
Consolidated Pro Forma Statements of Operations
(Unaudited)
Three months ended Six months ended
December 31, December 31,
1996 1995 1996 1995
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Net revenues $ 1,283,466 $ 675,108 $ 2,354,483 $ 1,304,232
Cost of revenues 365,039 226,550 682,496 433,067
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Gross profit 918,427 448,558 1,671,987 871,165
Operating expenses:
Product development 157,287 165,161 279,279 302,182
Selling, general and administrative 1,104,305 708,473 1,955,864 1,099,643
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Total operating expenses 1,261,592 873,634 2,235,143 1,401,825
Operating (loss) (343,165) (425,076) (563,156) (530,660)
Interest income (expense), net (14,967) (15,880) (28,480) (78,889)
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Loss before taxes (358,132) (440,956) (591,636) (609,549)
Provision for income tax - 3,952 - 800
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Net loss $ (358,132) $ (444,908) $ (591,636) $ (610,349)
================ =============== ================ =================
Net loss per common share $ (0.06) $ (0.08) $ (0.09) $ (0.14)
Weighted average common
shares outstanding 6,285,128 5,670,609 6,285,128 4,265,024
See accompanying notes to consolidated pro forma financial statements.
RomTech, Inc.
Consolidated Pro Forma Balance Sheet Entries
at December 31, 1996
(Unaudited)
Description Dr. Cr.
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A Cash $28,000.00
Convertible preferred stock $28,000.00
To record the sale of Class Two
Convertible Preferred Stock.
B Notes payable $200,000.00
Convertible preferred stock $100,000.00
Common stock $99,344.00
Additional paid in capital $656.00
To record the conversion of $200,000
of notes payable to $100,000 of Class
Two Convertible Preferred Stock and
$100,000 to exercise warrants outstanding.