UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 5, 2005
DPAC TECHNOLOGIES CORP.
(Exact name of registrant as specified in its charter)
California 0-14843 33-0033759
(State or other jurisdiction (Commission File Number) I.R.S. Employer
of incorporation) Identification Number
7321 Lincoln Way, Garden Grove, California 92841
(Address of principal executive office) (Zip Code)
714/ 898-0007
Registrant's telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report.)
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):
|X| 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))
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
(a)
On October 20, 2005 the Registrant entered into amendments of two material
agreements:
1. The Second Amendment, dated October 20, 2005, to the Agreement and Plan
of Reorganization (the "Second Amendment") between the Registrant and
QuaTech, originally entered into on April 26, 2005, as subsequently
amended by the First Amendment dated August 5, 2005.
2. The First Amendment to the Licensing Agreement, dated October 20, 2005
(the "License Amendment") among the Registrant, Quatech and DCV that
licenses DCV and QuaTech and their successors the rights to manufacture
and distribute the Registrant's Airborne(TM) wireless technology.
The amendments to the agreements were announced in a press release dated October
20, 2005 and attached hereto as Exhibit 99.2, and incorporated herein by this
reference.
The Registrant and QuaTech entered into an Agreement and Plan of Reorganization
on April 26, 2005 which provided for the Registrant's subsidiary to merge with
and into QuaTech, Inc., an Ohio Corporation, in a stock for stock exchange,
subject to shareholder approval and certain other conditions (the "Merger"),
incorporated herein by this reference. As a result of certain changes in
circumstances since the signing of the original agreement and the amendments,
and in order to facilitate the closing of the Merger, the parties entered into
the aforementioned agreements on October 20, 2005. DCV is the holder of 100% of
the preferred stock of QuaTech.
The Second Amendment changes the exchange ratio of the Registrant's common stock
to be issued upon the closing of the business combination for each share of
QuaTech common and preferred stock. The exchange ratio would result in existing
DPAC shareholders owning approximately 30% of the issued and outstanding common
stock of the combined entity created by the merger of QuaTech and DPAC, prior to
the conversion of the bridge loan provided by DCV to DPAC on August 5, 2005.
After the conversion of the bridge loan, which occurs automatically upon the
consummation of the merger with QuaTech, provided the merger occurs on or before
February 3, 2006, existing DPAC shareholders would own approximately 25.5% of
the issued and outstanding common stock after the Merger.
The Second Amendment also extends the termination date of the Agreement and Plan
of Reorganization to March 31, 2006, and establishes as a condition to the
closing of the business combination a requirement that QuaTech consummate $3.1
million in debt financing prior to the Merger, and subsequently exercise its
option to prepay license fees, as described in the First Amendment to the
License Agreement as described below.
Section 2 - Financial Information
Item 2.01 Disposition of Assets
As stated in item 1.01 the Registrant has licensed all its technology to DCV
pursuant to the License Agreement. (Item 1.01, which contains relevant
information, is incorporated herein by this reference).
The License Amendment grants an option to QuaTech to elect to prepay all
exclusive license fees under the
original license agreement for a one-time cash payment of $2.4 million, subject
to DPAC shareholder approval. Under the License Amendment, the parties agree
that $2.4 million shall be considered the fair market value of the exclusive
license. If QuaTech elects to exercise its option to prepay the license fees,
the cash payment will be held in escrow pending the outcome of the DPAC
shareholder vote to approve the License Agreement and pending the merger. If
DPAC shareholders approve the License Agreement, and if the Agreement and Plan
of Reorganization is terminated for any reason, QuaTech shall be entitled to a
return of the escrowed funds, and the license will be converted to a
non-exclusive license under which QuaTech will continue to be obligated to pay
license fees to DPAC based on unit shipments of Airborne(TM) wireless products.
Section 5 - Corporate Governance and Management
Item 5.01 Changes in Control of Registrant
If the Merger is completed, DCV will beneficially own approximately 52.4% of the
Registrant's common stock, and this will result in a Change of Control (Item
1.01, which contains relevant information, is incorporated herein by this
reference).
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exh. No. Description
- -------- -----------------------------------------------------------
2.4 Agreement and Plan of Reorganization dated April 26, 2005 among the
Registrant, DPAC Acquisition Sub, Inc. and QuaTech, Inc., including
selected exhibits: Forms of Shareholder and Registration Rights
Agreement, Employment Agreement for Steven Runkel and Employment
Agreement for Creighton Early. Other exhibits listed in the exhibit
list in the Table of Contents have been omitted from this filing but
will be filed by the Registrant if requested by the Securities
Exchange Commission*
2.4.1 Typed signatures to Exhibit 2.4**
2.4.2 First Amendment dated August 5, 2005 to Agreement and Plan of
Reorganization***
2.4.3 Second Amendment dated October 20, 2005 to Agreement and Plan of
Reorganization
2.5 License Agreement dated August 5, 2005***
2.5.1 First Amendment dated October 20, 2005 to License Agreement dated
August 5, 2005
10.24 Bridge Loan and Escrow Agreement dated July 29, 2005***
10.25 Convertible Term Note dated August 5, 2005***
10.26 Loan Agreement dated August 5, 2005***
10.27 Security Agreement dated August 5, 2005 with attached Riders***
99.1 Press Release of Registrant dated August 5, 2005***
99.2 Press Release of Registrant dated October 20, 2005
- -----------------------------------------------------------------------------
* Filed as a like-numbered Exhibit to the Registrant's Form 8-K/A filed
with the SEC on April 27, 2005.
** Filed as a like-numbered Exhibit to the Registrant's Form 8-K/A filed
with the SEC on May 20, 2005.
*** Filed as a like-numbered Exhibit to the Registrants Form 8-K filed
with the SEC on August 9, 2005.
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.
DPAC Technologies Corp.
(Registrant)
Date October 20, 2005
/s/ Creighton K. Early
----------------------------------------------------
(Signature)
Creighton K. Early, Chief Executive Officer
----------------------------------------------------
(Name and Title)
Exh. No. Description
- -------- -----------------------------------------------------------
2.4 Agreement and Plan of Reorganization dated April 26, 2005 among the
Registrant, DPAC Acquisition Sub, Inc. and QuaTech, Inc., including
selected exhibits: Forms of Shareholder and Registration Rights
Agreement, Employment Agreement for Steven Runkel and Employment
Agreement for Creighton Early. Other exhibits listed in the exhibit
list in the Table of Contents have been omitted from this filing but
will be filed by the Registrant if requested by the Securities
Exchange Commission*
2.4.1 Typed signatures to Exhibit 2.4**
2.4.2 First Amendment dated August 5, 2005 to Agreement and Plan of
Reorganization***
2.4.3 Second Amendment dated October 20, 2005 to Agreement and Plan of
Reorganization
2.5 License Agreement dated August 5, 2005***
2.5.1 First Amendment dated October 20, 2005 to License Agreement dated
August 5, 2005
10.24 Bridge Loan and Escrow Agreement dated July 29, 2005***
10.25 Convertible Term Note dated August 5, 2005***
10.26 Loan Agreement dated August 5, 2005***
10.27 Security Agreement dated August 5, 2005 with attached Riders***
99.1 Press Release of Registrant dated August 5, 2005***
99.2 Press Release of Registrant dated October 20, 2005
- -----------------------------------------------------------------------------
* Filed as a like-numbered Exhibit to the Registrant's Form 8-K/A filed
with the SEC on April 27, 2005.
** Filed as a like-numbered Exhibit to the Registrant's Form 8-K/A filed
with the SEC on May 20, 2005.
*** Filed as a like-numbered Exhibit to the Registrants Form 8-K filed
with the SEC on August 9, 2005.