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
March 15, 2000
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Date of Report (Date of earliest event reported)
COVOL TECHNOLOGIES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-27808 87-0547337
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
3280 N. Frontage Road
Lehi, UT 84043
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(Address of principal executive offices)
(Zip Code)
(801) 768-4481
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report.)
Certain statements in this Report constitute forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. As such,
actual results may vary materially from current expectations. For a discussion
of certain of the factors that could cause actual results to differ from
expectations, please see the information set forth under the caption entitled
"Forward Looking Statements" in PART I, ITEM 2 of Covol's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1999. There can be no assurance
that Covol's results of operations will not be adversely affected by such
factors. Covol undertakes no obligation to revise or publicly release the
results of any revision to these forward-looking statements. Readers are
cautioned not to place undue reliance on these forward looking statements, which
reflect management's opinion only as of the date hereof.
Item 5. Other Events - Response to NASDAQ Requirement
Covol received a letter from Nasdaq requiring, as a condition for continued
listing on the Nasdaq National Market, that the Company file with the SEC a
public document containing a pro forma balance sheet and income statement
demonstrating i) a minimum of $5,000,000 in net tangible assets, and ii)
positive earnings from operations. The financial statements included in Item 7
are filed in response to this requirement. These financial statements are as of
and for the two months ended February 29, 2000 and give effect on a pro forma
basis to the following transactions consummated in March 2000:
1) A private placement of common stock was completed on March 23, 2000,
which resulted in net cash proceeds of approximately $4,688,000.
2) Conversions by the holder of approximately $130,000 of redeemable
preferred stock to common stock.
3) Reclassification of the unconverted redeemable preferred stock
(approximately $2,712,000) to equity, as a result of elimination of the
provisions that in certain situations allowed the holder of the
preferred stock to require the Company to redeem the preferred stock.
This transaction was completed on March 15, 2000.
While Covol has not received written confirmation that the attached financial
information will satisfy Nasdaq's requirements, Covol believes that the
financial information demonstrates compliance with the requirements outlined in
the letter Covol received from Nasdaq.
Item 7. Financial Statements and Exhibits
(b) The following pro forma condensed consolidated financial statements
are included herein:
Condensed Consolidated Statement of Operations for the Two Months Ended
February 29, 2000 (unaudited)
Condensed Consolidated Balance Sheet as of February 29, 2000
(unaudited)
(c) The following exhibit is included herein:
3.1.6.1 Amendment and Waiver to Certificate of Designations
Preferences and Rights of the Series of the Preferred
Stock of Covol Technologies, Inc. to be Designated
Series D Cumulative Convertible Preferred Stock
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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.
COVOL TECHNOLOGIES, INC.
Registrant
Date: March 29, 2000 /s/ Kirk A. Benson
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Kirk A. Benson
Chief Executive Officer and
Principal Executive Officer
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COVOL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(thousands of dollars)
Two Months Ended February 29, 2000
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Unadjusted Adjustments Pro Forma Notes
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Revenues:
License fees $4,010 $4,010
Other 1,388 1,388
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Total revenues 5,398 5,398
Operating costs and expenses:
Cost of briquetting operations 433 433
Loss on sale of facility 581 581
Other 1,654 1,654
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Total operating expenses 2,668 2,668
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Operating income 2,730 2,730
Interest expense, net (2,799) (2,799)
Other income, net 53 53
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Net loss before income taxes (16) (16)
Income taxes 0 0
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Net loss ($16) ($16)
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CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(thousands of dollars)
February 29, 2000
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Unadjusted Adjustments Pro Forma Notes
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Assets:
Current assets:
Cash and cash equivalents $2,946 $4,688 $7,634 (a)
Receivables 13,378 13,378
Inventories 28 28
Facilities and equipment held for sale 9,646 9,646
Deferred income taxes 3,000 3,000
Other 24 24
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Total current assets 29,022 4,688 33,710
Property, plant and equipment, net 3,707 3,707
Note and interest receivable 8,280 8,280
Intangible assets 1,318 1,318
Other 2,190 2,190
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Total assets $44,517 $4,688 $49,205
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Liabilities:
Current liabilities:
Accounts payable $545 $ $545
Notes payable, current 14,241 14,241
Other 6,931 6,931
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Total current liabilities 21,717 0 21,717
Notes and interest payable, non-current 12,073 12,073
Other non-current liabilities 173 173
Deferred revenues 7,118 7,118
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Total liabilities 41,081 0 41,081
Redeemable convertible preferred stock 2,842 (2,842) 0 (b)
Stockholders' equity:
Convertible preferred stock and common stock - par value 18 5 23 (a)
Capital in excess of par value 81,864 7,525 89,389 (a) (b)
Accumulated deficit (73,871) (73,871)
Related party receivables collateralized by stock (6,272) (6,272)
Deferred compensation from stock options (1,145) (1,145)
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Total stockholders' equity 594 7,530 8,124
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Total liabilities and stockholders' equity $44,517 $4,688 $49,205
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Notes to Proforma Financial Statements
(a) Consists of a private placement of common stock completed on March 23,
2000.
(b) Consists of conversions of the redeemable preferred stock to common
stock totalling $130,000 and reclassification of the unconverted
preferred stock ($2,712,000) to equity, as a result of elimination of
the provisions that in certain situations allowed the holder of the
preferred stock to require the Company to redeem the preferred stock.
Both of these transactions were finalized on or before March 15, 2000.
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