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 Exchange Act of 1934
Date of Report (Date of earliest event reported): May 6, 2002
LANGER, INC.
(Exact name of registrant as specified in its charter)
New York 0-12991 11-2239561
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
450 Commack Road, Deer Park, New York 11729
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(Address of principal executive executive offices) (Zip Code)
Registrant's telephone number, including area code: (631) 667-1200
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(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Significant Assets.
On May 6, 2002, Langer, Inc. ("Langer" or "we"), through a wholly owned
subsidiary, acquired substantially all of the assets and liabilities of each of
Benefoot, Inc. and Benefoot Professional Products, Inc. (jointly, the "Seller"),
pursuant to the terms of an Asset Purchase Agreement, dated as of May 6, 2002
(the "Asset Purchase Agreement"), by and among Langer, GoodFoot Acquisition Co.,
the Seller, and Jason Kraus and Paul Langer (the "Principal Shareholders"). The
assets we acquired are used in the manufacture and sale of footwear products to
podiatrists' patients and foot orthotic devices and include, machinery and
equipment, other fixed assets, inventory, receivables, contract rights, and
intangible assets.
In connection with the acquisition, we paid consideration, determined
through arms-length negotiation of the parties, of $6 million, of which $3.7
million was paid in cash, $1.8 million was paid through the issuance of
promissory notes (the "Promissory Notes") and $500,000 was paid by issuing to
the Seller 61,805 shares of our common stock (the "Shares"), together with
certain registration rights pursuant to a registration rights agreement.
$1,000,000 of the Promissory Notes will be repaid on May 6, 2003, and the
balance will be repaid on May 6, 2004. The Promissory Notes bear interest at 4%.
We also assumed approximately $400,000 of long-term indebtedness of the Seller.
We also agreed to pay Seller up to an additional $1,000,000 upon satisfaction of
certain performance targets on or prior to May 6, 2004. The purchase price will
be reduced dollar for dollar to the extent that the net current assets of the
Seller as of the closing date were less than $700,000 or the long term
indebtedness as of the closing date exceeded $400,000. Conversely, the purchase
price will be increased dollar for dollar to the extent that the net current
assets of the Seller as of the closing date exceeded $700,000 or the long term
indebtedness as of the closing date was less than $400,000. We funded the entire
cash portion of the purchase price through working capital generated principally
through the sale of $14,589,000 principal amount of our 4% convertible
subordinate notes due August 31, 2006.
In connection with the Asset Purchase Agreement, we entered into an
employment agreement with each of the Principal Shareholders, each having a term
of two years and providing for an annual base salary of $150,000 and benefits,
including certain severance payments. We also entered into a consulting
agreement with Dr. Sheldon Langer providing for an annual consulting fee of
$45,000 and a one time grant of 3,090 shares of our common stock, together with
certain registration rights pursuant to a registration rights agreement.
The description of the Asset Purchase Agreement and the transactions
contemplated by it described above is not intended to be complete and is
qualified in its entirety by the complete text of the Asset Purchase Agreement,
which is attached as Exhibit 2.1 to this report. A copy of Langer's press
release dated May 6, 2002 announcing the consummation of the transaction
described above, is attached as Exhibit 99.1 to this report.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements and Pro Forma Financial Information
It is impractical for the Company to provide the financial
statements that may be required to be included herein. The
Company will file such financial statements within 60 days
after the date hereof.
(c) Exhibits
The following Exhibits are hereby filed as part of this
Current Report on Form 8-K:
Exhibit Number Description
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2.1 Asset Purchase Agreement, dated May 6, 2002, by and
among Langer, Inc., GoodFoot Acquisition Co., Benefoot,
Inc., Benefoot Professional Products, Inc., Jason Kraus,
and Paul Langer
10.1 Registration Rights Agreement, dated May 6, 2002, among
Langer, Inc., Benefoot, Inc., Benefoot Professional
Products, Inc., and Dr. Sheldon Langer
10.2 Promissory Note, dated May 6, 2002, made by Langer, Inc.
in favor of Benefoot, Inc.
10.3 Promissory Note, dated May 6, 2002, made by Langer, Inc.
in favor of Benefoot Professional Products, Inc.
99.1 Press Release, dated May 6, 2002
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.
Dated: May 13, 2002
LANGER, INC.
By: /s/ Anthony J. Puglisi
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Anthony J. Puglisi,
Vice President and Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
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2.1 Asset Purchase Agreement, dated May 6, 2002, by and among
Langer, Inc., GoodFoot Acquisition Co., Benefoot, Inc.,
Benefoot Professional Products, Inc., Jason Kraus, and Paul
Langer
10.1 Registration Rights Agreement, dated May 6, 2002, among
Langer, Inc., Benefoot, Inc., Benefoot Professional Products,
Inc., and Dr. Sheldon Langer
10.2 Promissory Note, dated May 6, 2002, made by Langer, Inc. in
favor of Benefoot, Inc.
10.3 Promissory Note, dated May 6, 2002, made by Langer, Inc. in
favor of Benefoot Professional Products, Inc.
99.1 Press Release