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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
July 9, 2002
Date of Report: (Date of earliest event reported)
Commission File Number: 0-19024
FRONTSTEP, INC.
(Exact name of registrant as specified in its charter)
OHIO 31-1083175
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
2800 CORPORATE EXCHANGE DRIVE
COLUMBUS, OHIO 43231
(Address of principal executive offices) (Zip Code)
(614) 523-7000
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On March 7, 2002, the Company issued its warrants and 10% subordinated
notes in the aggregate principal amount of $1.5 million (the "Initial Notes") in
a private placement to certain of its preferred shareholders, including Fallen
Angel Equity Fund and entities affiliated with Morgan Stanley, and two other
shareholders and directors of the Company, Lawrence J. Fox and James A.
Rutherford (collectively, the "Investors"), pursuant to a Securities Purchase
Agreement dated March 7, 2002 (the "Original Agreement"). The March transaction
was part of an agreement by the Investors, subject to certain conditions, to
provide a total of $5 million of funding to the Company. The proposed financing
was first publicly announced on February 14, 2002, in a press release issued by
the Company, a copy of which was included as an exhibit to the Company's Form
8-K dated March 7, 2002 filed with the Securities and Exchange Commission. Under
the Original Agreement, the Company agreed to issue and sell to the Investors,
and the Investors agreed to purchase, subject to certain conditions, including
the approval of the Company's shareholders, in the aggregate the remaining $3.5
million principal amount of 10% subordinated convertible notes due May 10, 2004
(the "Convertible Notes").
On June 20, 2002, shareholders of the Company approved the issuance of
the Convertible Notes, the issuance of common shares upon conversion of the
Initial Notes and the issuance of that portion of the warrants issued in March
2002 to Mr. Fox and Mr. Rutherford. On July 9, 2002, the Company and the
Investors entered into Amendment Number One to the Original Agreement (the
"Amendment") and completed the closing of the Convertible Notes transaction. The
closing constituted the "Convertible Closing" as such term is defined in the
Original Agreement and, therefore, as a result of the closing, the Initial Notes
became convertible into common shares of the Company, at the election of the
holders, at a conversion price of $2.4876 per share at any time after July 9,
2002. In addition, the Amendment permits the Company to issue up to $3.5 million
in principal amount of Convertible Notes to the Investors as required to satisfy
the Company's working capital requirements upon a determination by the Company's
Board of Directors that additional funding for such purpose is needed. All other
conditions precedent to the Investors obligations to purchase the Convertible
Notes have been satisfied. At the present time, other than the Initial Notes, no
Notes have been issued by the Company to the Investors.
Copies of the Amendment and a press release issued by the Company on
July 10, 2002 to announce the Convertible Notes closing are included as exhibits
to this filing.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable.
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(b) Not applicable.
(c) Exhibits.
The following exhibits are filed with this Form 8-K:
10 Amendment Number One to Securities Purchase Agreement dated
as of July 9, 2002
99(a) Text of press release dated July 10, 2002
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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.
FRONTSTEP, INC.
Dated: July 15, 2002 By: /s/ Daniel P. Buettin
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Daniel P. Buettin
Vice President and Chief Financial
Officer
(on behalf of the Registrant and as
Principal Financial Officer)
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INDEX TO EXHIBITS
Exhibit Number Description of Exhibit Page
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10 Amendment Number One to Securities Purchase Filed herein
Agreement dated as of July 9, 2002
99(a) Text of press release dated February 14, 2002. Filed herein
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