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
September 25, 2003
Date of Report
(Date of Earliest Event Reported)
Tech Laboratories, Inc.
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(Exact name of Registrant as specified in its charter)
New Jersey 000-27592 22-1436279
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(State or other jurisdiction of (Commission (I.R.S. Employee
incorporation or organization) File No.) I.D. Number)
955 Belmont Avenue
North Haledon, New Jersey 07508
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Address of principal executive offices (Zip Code)
(973) 427-5333
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(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
Tech Laboratories, Inc. (the "Company") issued a press release on
October 24, 2003, announcing that it had entered into a Security Agreement and
Collateral Agent Agreement dated September 25, 2003 (the "Security Agreement "),
pursuant to which it obtained a waiver and thereby cured the existing Event of
Default under its outstanding 6.5% convertible promissory notes with the Lenders
set forth in such notes ("Lenders". In consideration for the waiver and cure of
the Event of Default existing under the notes, the Company agreed to grant the
Lenders a security interest in the Company's inventory ("Collateral"). The
Company and the Lenders agreed that as additional consideration for the grant of
the security interest in the Collateral that:
(a) If within 180 days from the date of this Agreement ("Calculation Date")
there remains outstanding on the Notes less than $500,000 of principal and
interest in the aggregate (such amount being outstanding vis-a-vis each Lender
in the same proportion as the amount of principal and interest outstanding on
the date of this Agreement ["Proportionate Amount"]), then the Lenders will
release the security interest in the Collateral upon written certification
accordingly from the Company's certified public accountant to the Lenders. In
the event the Company has paid within six months from the date of this Agreement
to each Lender, such Lender's Proportionate Amount of $250,000, then the
Calculation Date shall be extended until one year from the date of this
Agreement.
(b) The Notes are prepayable without the consent of the Lenders provided such
prepayments are made in the Lenders Proportionate Amounts. No prepayments may be
made in connection with amounts of principal or interest for which Conversion
Notices (as defined in the Notes) have been given. Provided the Company makes
payments to Lenders of not less than $100,000 in the aggregate per payment, then
the Company will receive a credit against outstanding principal and interest
equal to one hundred and thirty-three percent (133%) of the amount of each such
payments.
(c) Provided an Event of Default (as defined in Section 9 of the Security
Agreement) has not occurred, then the Lenders agree not to convert the Notes for
ninety (90) days after the date of this Agreement.
(d) Provided an Event of Default (as defined in Section 9 of this Agreement)
does not occur, then the Lenders waive liquidated damages under the Subscription
Agreement and default interest under the Notes accrued as of the date of this
Agreement.
(e) The Company agrees that all the Common Stock issuable upon conversion of the
Notes and upon exercise of the Warrants issued pursuant to the Subscription
Agreement may be resold without restriction pursuant to Rule 144(k) under the
Securities Act of 1933. Provided the Company issues such shares without the
legends set forth in Sections 1(e), 1(f) and 1(g) of the Subscription Agreement
within five days after request by a Lender, then the Lenders waive liquidated
damages accrued as of the date of this Agreement arising from the occurrence of
a Non-Registration Event.
(f) If an Event of Default occurs, then the Lenders shall be restored to their
position status quo ante this Agreement in relation to all liquidated damages,
default interest, and other damages and penalties which will be reinstated.
(c) EXHIBITS.
10.1 Security Agreement dated September 25, 2003 between the
Company and Barbara Mittman, as collateral agent for the
Lenders.
10.2 Collateral Agent Agreement dated September 25, 2003 between
Barbara Mittman and the Lenders.
99.1 Press Release dated October 24, 2003.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Tech Laboratories, Inc.
Date: October 27, 2003
By: /s/ Bernard Ciongoli
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Bernard M. Ciongoli, President