==========================================================
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
August 28, 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)
==========================================================
ITEM 5. OTHER EVENTS.
On August 28, 2002, the Company issued its 10% subordinated convertible
notes (the "Convertible Notes") in the aggregate principal amount of $1.0
million to, and received $1.0 million in cash from, 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"), in
accordance with the terms of the private placement transaction previously
announced. The Convertible Notes are each due on May 10, 2004 and are
convertible into common shares of the Company at a conversion rate of $2.4876
per share.
The private placement transaction is discussed and has been disclosed
previously in the Company's Form 8-Ks dated March 7, 2002, July 9, 2002, and
August 12, 2002, respectively, filed with the Securities and Exchange
Commission, and in press releases, copies of which are included with such
filings.
A summary of the Convertible Notes issued by the Company to the
Investors on August 28, 2002, and the aggregate principal amount of all
convertible notes issued to date to the Investors as part of the private
placement transaction is as follows:
------------------------------------------------------- ------------ -------------
PRINCIPAL
AMOUNT OF AGGREGATE
CONVERTIBLE PRINCIPAL
NOTES AMOUNT OF
NAME OF INVESTOR PURCHASED CONVERTIBLE
ON AUGUST NOTES
28, 2002 PURCHASED*
------------------------------------------------------- ------------ -------------
Morgan Stanley Dean Witter Venture Partners IV, L.P. $ 366,754 $1,833,770
------------------------------------------------------- ------------ -------------
Morgan Stanley Dean Witter Venture Investors IV, L.P. $ 42,549 $ 212,747
------------------------------------------------------- ------------ -------------
Morgan Stanley Dean Witter Venture Offshore Investors $ 14,309 $ 71,543
IV, L.P.
------------------------------------------------------- ------------ -------------
Fallen Angel Equity Fund, L.P. $ 176,388 $ 881,940
------------------------------------------------------- ------------ -------------
Lawrence J. Fox $ 300,000 $1,500,000
------------------------------------------------------- ------------ -------------
James A. Rutherford $ 100,000 $ 500,000
------------------------------------------------------- ------------ -------------
Total $1,000,000 $5,000,000
------------------------------------------------------- ------------ -------------
* Includes Initial Notes issued on March 7, 2002 which became convertible
into common shares of the Company on July 9, 2002 at the rate of
$2.4876 per share.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
2
(c) Exhibits.
The following exhibits are filed with this Form 8-K:
4 10.0% Subordinated Convertible Note, No. C-7, due May 10, 2004 in
the amount of $366,754 issued to Morgan Stanley Dean Witter Venture
Partners IV, L.P. and Schedule A to Exhibit 4 identifying other
substantially identical subordinated convertible notes issued to
other investors.
3
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: September 4, 2002 By: /s/ Daniel P. Buettin
----------------------
Daniel P. Buettin
Vice President and Chief Financial
Officer
(on behalf of the Registrant and
as Principal Financial Officer)
4
INDEX TO EXHIBITS
4 10.0% Subordinated Convertible Note, No. C-7, due May 10, 2004 in
the amount of $366,754 issued to Morgan Stanley Dean Witter Venture
Partners IV, L.P. and Schedule A to Exhibit 4 identifying other
substantially identical subordinated convertible notes issued to
other investors.
5