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): December 30, 2004
Science Dynamics Corporation
(Exact name of registrant as specified in its charter)
Delaware 000-10690 22-2011859
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
7150 N. Park Drive, Suite 500
Pennsauken, NJ 08109
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (856) 910-1166
Copies to:
Gregory Sichenzia, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On December 30, 2004, Science Dynamics Corporation (the "Company")
entered into a consulting agreement with Calabash Consultancy, Ltd. Under the
agreement, Calabash Consultancy, Ltd. was engaged as a business development,
financial and management consultant, which consulting services are to be
provided by Alan Bashforth to act as Chief Executive Officer and Chairman of the
Board of Directors of the Company. The agreement started January 1, 2005 and
continues for an initial three-year term. The agreement will automatically renew
for additional one-year terms following the initial term, provided that
following the initial term either party may terminate the agreement by providing
the other party a minimum of 30 days prior written notice. In consideration for
its services, the Company agreed to pay Calabash Consultancy, Ltd. an annual fee
of $300,000. After the Company completes the acquisition of Systems Management
Engineering, Inc. ("SMEI"), Calabash Consultancy, Ltd. will be awarded warrants
to purchase 6,000,000 shares of the Company's common stock at an exercise price
of $0.10 per share that expire seven years after issuance. In addition, as part
of a bonus payment for years 2003 and 2004, the Company agreed to grant Calabash
Consultancy, Ltd. fully vested stock options to purchase 2,000,000 shares of the
Company's common stock with an exercise price of $0.05 per share. The Company
agreed to fully reimburse Calabash Consultancy, Ltd. for any and all expenses
incurred in the performance of duties under the agreement and to pay Calabash
Consultancy, Ltd. $850 per month for a vehicle to be used exclusively by
Calabash Consultancy, Ltd. during the term of the agreement. During the initial
term or any subsequent renewal, if the Company is sold to another party or
subject to a change of control, or ownership of more than 20% of the Company's
outstanding common stock is controlled by a single party, Calabash Consultancy,
Ltd. may terminate the agreement by providing 30 days advance notice of
termination. Upon such termination, all options and warrants will become fully
vested and all other amounts due under the agreement, including payments through
the term of the agreement, will become immediately due and payable. The Company
agreed to indemnify Calabash Consultancy, Ltd. and Mr. Bashforth and hold them
harmless for all acts or decisions made by Mr. Bashforth in good faith while
performing services for the Company. The Company also agreed to be responsible
for payment of any and all taxes that may become due to any state or federal
taxing authority arising out of the agreement and to indemnify and hold harmless
Calabash Consultancy, Ltd. and Mr. Bashforth from any such payment.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit Number Description
- --------------------------------------------------------------------------------
10.1 Agreement dated December 30, 2004 between Science Dynamics
Corporation and Calabash Consultancy, Ltd.
2
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.
Science Dynamics Corporation
Date: February 25, 2005 /s/ Alan C. Bashforth
----------------------
Alan C. Bashforth
Acting Chief Financial Officer and Secretary
3