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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):
SEPTEMBER 12, 2001
FIRSTWAVE TECHNOLOGIES, INC.
GEORGIA
(State of Incorporation)
0-21202
(Commission File Number)
58-1588291
(IRS Employer Identification Number)
2859 PACES FERRY ROAD, SUITE 1000
ATLANTA, GA 30339
(Address of principal executive offices)
770-431-1200
(Telephone Number of Registrant)
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ITEM 5. OTHER EVENTS.
On September 7, 2001, Firstwave Technologies, Inc. (the "Company") held a
Special Meeting of Shareholders to consider the following proposals:
(i) to approve the sale and issuance of a new series of preferred
stock, designated as the Series C Convertible Preferred Stock
(and the issuance of shares of the Company's common stock into
which such shares may convert), including (1) 6,667 shares of
Series C Convertible Preferred Stock to Mercury Fund II, Ltd.
upon the conversion of the $500,025 principal amount of the
secured, short-term note between the Company and Mercury Fund
II, Ltd. and (2) up to an additional 10,000 shares of Series C
Convertible Preferred Stock from time to time on substantially
similar terms;
(ii) the sale and issuance of 10,000 shares of Series C Convertible
Preferred Stock (and the issuance of shares of the Company's
common stock into which such shares may convert) to Richard T.
Brock, President and CEO of the Company, upon the conversion
of the $750,000 principal amount of the secured note held by
Mr. Brock;
(iii) to approve an amendment to the Company's Amended and Restated
Articles of Incorporation to eliminate certain provisions that
require the Company to treat its Series A Convertible
Preferred Stock and its Series B Convertible Preferred Stock
as "redeemable securities" rather than long-term equity on the
Company's financial statements, and to change the timing of
dividend payments from annual to monthly; and
(iv) to approve an amendment to the Company's Amended and Restated
Articles of Incorporation to authorize the Board of Directors,
in its discretion, to effect a reverse stock split of all the
issued and outstanding shares of the Company's common stock at
a ratio not to exceed one-for-three as discussed in the Proxy
Statement of the Company relating to the Special Meeting.
The primary purpose of the transactions proposed was to help the Company achieve
compliance with the applicable continued listing requirements of The Nasdaq
Stock Market ("Nasdaq") governing companies listed on the Nasdaq SmallCap
Market, in accordance with conditions imposed by a Listing Qualifications Panel
of the Nasdaq Stock Market ("Nasdaq Panel") for such continued listing. At the
Special Meeting, the Company's shareholders approved all proposals. The votes
cast for, against, or abstained were as follows:
Votes For: Votes Against: Votes Abstained:
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(i) 4,129,979 315,775 5,895
(ii) 3,122,899 322,606 6,145
(iii) 4,132,196 314,303 5,150
(iv) 5,692,494 859,078 5,170
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Immediately following the Special Meeting of Shareholders, the Board of
Directors of the Company exercised the authority granted to it and voted to
effect a one-for-three reverse stock split of the Company's Common Stock, to be
effective at 12:01 a.m. on September 12, 2001. In accordance with the Nasdaq
Panel's conditions, the Company was required to make, on or before September 12,
2001, a public filing that includes a balance sheet dated not more than 45 days
prior to September 12, 2001, demonstrating net tangible assets of not less than
$3.5 million. The Company is filing as part of Item 7 of this Report the balance
sheet required by the Nasdaq Panel.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired
Not Applicable
(b) Pro Forma Financial Information
The following unaudited pro forma financial statements are filed with this
report:
Pro Forma Consolidated Balance Sheet as of July 31, 2001.................Page 4
Notes to Unaudited Pro Forma Consolidated Balance Sheet..................Page 5
The Pro Forma Consolidated Balance Sheet of the Company is presented to give
effect to certain transactions approved by the shareholders of the Company on
September 7, 2001. The approved transactions comprise a substantial portion of
the Company's plan to achieve compliance with the applicable continued listing
requirements of the Nasdaq. The Pro forma Consolidated Balance Sheet is
presented as of July 31, 2001, and reflects the following transactions approved
by the Company's shareholders on September 7, 2001:
- Conversion of a convertible promissory note in the amount of
$500,025 into Series C Convertible Preferred Stock.
- Conversion of a convertible promissory note in the amount of
$750,000 into Series C Convertible Preferred Stock.
- Amendment of the Company's Articles of Incorporation to
eliminate certain liquidation rights of the Company's Series A
and Series B Convertible Preferred Stock.
- Amendment to the Company's Articles of Incorporation to effect
a one-for-three reverse stock split of the Company's common
stock.
The Pro Forma Consolidated Balance Sheet should be read in conjunction with the
historical audited and unaudited consolidated financial statements and related
notes of the Company for the year ended December 31, 2000 as filed on Form 10-K
and for the three months ended March 31, 2001, and June 30, 2001 as filed on
Form 10-Q.
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FIRSTWAVE TECHNOLOGIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET - UNAUDITED
AS OF JULY 31, 2001
(IN THOUSANDS)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
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ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 800 $ 800
ACCOUNTS RECEIVABLE 1,204 1,204
OTHER ASSETS 471 471
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TOTAL CURRENT ASSETS 2,475 2,475
PROPERTY AND EQUIPMENT, NET 482 482
CAPITALIZED SOFTWARE, NET 2,184 2,184
GOODWILL 223 223
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TOTAL ASSETS $5,364 $5,364
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 532 $532
DEFERRED REVENUE 670 670
ACCRUED EMPLOYEE COMPENSATION
AND BENEFITS 122 122
BORROWINGS 1,250 $(1,250)(1) 0
DIVIDENDS PAYABLE 67 67
OTHER ACCRUED LIABILITIES 159 159
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TOTAL CURRENT LIABILITIES 2,800 (1,250) 1,550
REDEEMABLE PREFERRED STOCK 1,702 (1,702)(2) 0
SHAREHOLDERS' EQUITY 862 2,952 (1.2) 3,814
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $5,364 $ 0 $5,364
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NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
The following adjustments are reflected in the unaudited Pro Forma Consolidated
Balance Sheet under the column headed "Pro Forma Adjustments:"
1. The Pro Forma adjustment reflects the conversion of:
(a) a convertible promissory note in the amount of
$500,025 into Series C Convertible Preferred Stock,
and
(b) a convertible promissory note in the amount of
$750,000 into Series C Convertible Preferred Stock.
The conversion of the above two promissory notes results in a
recording of beneficial conversion features. The Company will record
charges of approximately $730,000. These non-cash charges will be
reflected as a reduction in the net income available to common
shareholders.
2. The pro forma adjustment reflects the amendment of the Company's
Articles of Incorporation to eliminate certain liquidation rights of
the Company's Series A and Series B Convertible Preferred Stock.
3. It should be noted that the Company effected a one-for-three reverse
stock split on September 12, 2001.
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 thereunto duly authorized.
FIRSTWAVE TECHNOLOGIES, INC.
DATE: 9-12-01 /s/ Judith A. Vitale
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Judith A. Vitale
Vice President of Finance and Administration
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