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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Information Required Pursuant To
Rule 14f-1 Under The Securities Exchange Act Of 1934
September 21, 2000
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(Date of Report)
Imatec Ltd.
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(Exact name of registrant as specified in its charter)
Delaware 0-21752 11-3289398
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
150 East 58th Street, New York, New York 10022
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(Address of principal executive offices)
(212) 826-0440
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(Registrant's telephone number, including area code)
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Background
On June 7, 2000, Imatec Ltd., a Delaware corporation (the
"Registrant"), filed with the Securities and Exchange Commission a Current
Report on Form 8-K, announcing that as of May 26, 2000, the Registrant, through
its wholly-owned subsidiary, Sequel Acquisition Corporation, a Delaware
corporation ("SAC"), had entered into an asset purchase agreement (the "Asset
Purchase Agreement") with Sequel Technology Corporation, a Washington
corporation ("Sequel"), whereby SAC will acquire (the "Acquisition")
substantially all of the properties and assets, the business and goodwill of
Sequel, including the intellectual property and technology of Sequel, and assume
approximately $2 million of liabilities in exchange for 15,000,000 shares of
common stock, par value $.0001 per share, of the Registrant ("Registrant Common
Stock"). Such number of shares of Registrant Common Stock is subject to
adjustment in the event that Sequel should consummate a private offering prior
to the closing of the Acquisition. The Asset Purchase Agreement was amended as
of July 19, 2000 (the "Amendment"), to provide for, among other things, a
two-for-one stock split of the outstanding Registrant Common Stock immediately
prior to the Acquisition and the assumption by the Registrant of an additional
$800,000 of liability of Sequel.
The Asset Purchase Agreement contemplates that, in connection with, and
simultaneously with, the closing of the Acquisition, the directors and officers
of the Registrant shall resign and the individuals identified herein shall be
elected by the then holders of a majority of the outstanding Registrant Common
Stock.
Subject to the immediately preceding sentence, at the date hereof and
prior to the aforementioned stock split, the authorized capital stock of the
Registrant consists of 20,000,000 shares of Registrant Common Stock, of which
4,080,201 are outstanding (on a fully-diluted basis on the date hereof), and
2,000,000 shares of undesignated classes or series of preferred stock, par
$.0001 per share, of which no shares are outstanding. Pursuant to the Amendment,
subject to a number of conditions, the outstanding Registrant Common Stock
immediately prior to the Acquisition will be split two-for-one following the
Acquisition.
Following the closing of the Acquisition, the Registrant intends to
amend its certificate of incorporation to increase its authorized capitalization
to 40,000,000 shares of Registrant Common Stock and 2,000,000 shares of
Registrant Preferred Stock.
Following the closing of the Acquisition, the Registrant anticipates
that 24,500,000 shares of Registrant Common Stock, and 150,000 shares of Series
A Convertible Preferred Stock (each convertible into ten shares of Registrant
Common Stock and voting with the Registrant Common Stock as one class on an as
converted basis), will be outstanding and entitled to vote in an election of
directors.
Directors To Be Elected At The Closing Of The Acquisition
Set forth below is certain information with respect to the individuals
to be named director of the Registrant at the closing of the Acquisition. There
have been a total of six board meetings since January 1, 2000. Previously, the
Registrant disclosed that Robert Savette, President and Chief Executive Officer
of Sequel through August 2000, would serve as the President and Chief Executive
Officer of the Registrant following the closing of the Acquisition. The
Registrant and Sequel determined, with the agreement of Mr. Savette, that he
would not serve in such capacities following the closing of the Acquisition.
<PAGE>
Rand Ross Schulman, 47, Chief Executive Officer. Mr. Schulman has
agreed to be appointed to the Board of Directors and named Chief Executive
Officer upon the closing of the Acquisition. From March 2000 until June 2000,
Mr. Schulman served as Executive Vice President at Vizacom, Inc. From December
1997 until January 2000, Mr. Schulman served as Chief Executive Officer of Key
Lime Software. From January 1994 until March 1997, Mr. Schulman served as
Executive Vice President at TriTeal Corporation.
Mark G. Southern, 39, Vice President of Finance. Mr. Southern currently
serves as Vice President of Finance of Sequel and has served in such capacity
since December of 1999. Mr. Southern also served as Corporate Controller of
Sequel from September 1998 to December 1999. From August 1997 until August 1998
Mr. Southern served as Corporate Controller at Cable Plus. From January 1997
until August 1997 Mr. Southern served as Chief Financial And Operations Officer,
Secretary/Treasurer at Expotel. From May 1996 until January 1997 Mr. Southern
served as Director of Finance, Operations and Information Systems at KidStar
Interactive Media, Inc. From April 1995 to May 1996 Mr. Southern also served as
World Wide Financial Operations Manager at the Microsoft Network (MSN).
Following the closing of the Acquisition, Mr. Southern will continue as Vice
President of Finance of the Registrant. Mr. Southern has also previously served
as, Controller at McCaw Cellular Communications, now AT&T wireless, and as an
audit manager with Ernst and Young.
Ronald Leo Bernbaum, 49, Chairman of the Board of Directors. Mr.
Bernbaum has served as a Director since inception and the Chairman of the Board
of Directors of Sequel since September 1999. For over the past five years, Mr.
Bernbaum has served as the President of Basic Capital, a company providing
funding and management to companies in the real estate and technology
industries.
Principal And Management Stockholders
Following The Closing Of The Acquisition
Based solely upon information available at the date hereof and giving
effect to the closing of the Acquisition, the conversion of the Registrant's
Series A Preferred Stock into 1,500,000 shares of Registrant Common Stock, and
to a private offering of securities currently being conducted by Sequel, the
following table sets forth, as of the date immediately following the closing of
the Acquisition,
o each person who is known by the Registrant to be the owner of
record or beneficial owner of more than 5% of the outstanding
Registrant Common Stock,
o each director and each executive officer (and executive
officer appointees) of the Registrant,
o all directors and executive officers (including executive
officer appointees) of the Registrant as a group, and
o the number of shares of common stock beneficially owned by
each such person and such group and the percentage of the
outstanding shares owned by each such person and such group.
As a result of such private offering and as a result of a currently
pending debt-for-equity conversion being conducted by Sequel, such beneficial
ownership may change materially prior to the closing of the Acquisition.
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As used in the table below and elsewhere herein, the term beneficial
ownership with respect to a security consists of sole or shared voting power,
including the power to vote or direct the vote, and/or sole or shared investment
power, including the power to dispose or direct the disposition, with respect to
the security through any contract, arrangement, understanding, relationship, or
otherwise, including a right to acquire such power(s) during the next 60 days
following the date of this prospectus. Except as otherwise indicated, the
stockholders listed in the table have sole voting and investment powers with
respect to the shares indicated. Unless otherwise noted, beneficial ownership
consists of sole ownership, voting, and investment power with respect to all
common stock shown as beneficially owned by them.
<TABLE>
<CAPTION>
Number of Shares of
Registrant Common Stock
Name and Address Beneficially Owned Percentage of Class
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<S> <C> <C>
Rand Ross Schulman 0 0
C/o Sequel Technology
Corporation
3245 146th Place SE
Suite 300
Bellevue, Washington 98007
Mark Southern 416,843(1) 1.7
C/o Sequel Technology
Corporation
3245 146th Place SE
Suite 300
Bellevue, Washington 98007
Ronald Leo Bernbaum 10,600,000(2) 43.3
C/o 4576 Young Street
Suite 600
Toronto, Ontario M2W 6N4
Knightsbridge Financial 2,400,000(3) 9.8
Services Ltd.
C/o 4576 Young Street
Suite 600
Toronto, Ontario M2W 6N4
Michael Florence 2,400,000(4) 9.8
C/o Knightsbridge Financial
Services Ltd.
C/o 4576 Young Street
Suite 600
Toronto, Ontario M2W 6N4
Commendation Capital Group, Inc. 1,800,000(5) 7.3
C/o 4576 Young Street
Suite 600
Toronto, Ontario M2W 6N4
Dr. Hanoch Shalit 1,870,354(6) 7.6
C/o The Company
150 East 58th Street
New York, New York 10155
Carmello Cotrino 1,326,000 5.4
8 Homstead Circle
Marlboro, NJ 07746
All executive officers and
directors as a group 10,619,143 41.1
</TABLE>
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(1) Includes options for 397,700 shares of Registrant Common Stock held by
Commendation Capital Group, Inc.
(2) Includes (i) 6,400,000 shares of Registrant Common Stock held by
Medstar Southbeach Marina Partnership II, an Ontario, Canada limited
partnership, on behalf of which Mr. Bernbaum serves as trustee and has
sole beneficial ownership of the referenced shares, (2) 2,400,000
shares of Registrant Common Stock held by Knightsbridge Financial
Services Ltd., 50% of the outstanding securities of which are held by a
trust, the trustee of which is the spouse of Mr. Bernbaum, and (3)
1,800,000 shares of Registrant Common Stock held by Commendation
Capital Group, Inc. 53% of which is controlled by a trust of which Mr.
Bernbaum serves as trustee.
(3) Knightsbridge Financial Services Ltd. is owned 50% by a trust, the
trustee of which is the spouse of Mr. Bernbaum, and 50% by Michael
Florence. The other 50% by Rikare Management Inc., which is controlled
by Michael Florence.
(4) Consists of shares of Registrant Common Stock owned of record by
Knightsbridge Financial Services Ltd.
(5) Commendation Capital Group, Inc. is owned by two trusts, one of which
owns 53%, the trustee of which is Mr. Bernbaum. The shares held by
Commendation Capital Group, Inc. are to be offered as options to
present and former employees of Sequel after the close of the
transaction.
(6) Includes 200,000 shares which may be acquired under stock options.
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Related Party Transactions
From June 1999 through February 2000, Mr. Bernbaum, acting as trustee
for certain unaffiliated entities and individuals, together with certain
shareholders of Sequel who subsequently assigned their debt to Mr. Bernbaum as
trustee for the referenced entities and individuals, loaned $4,760,000 aggregate
principal amount to Sequel. Such loans accrue interest at the rate of 18% per
annum, are due on demand, are secured by a lien on Sequel's assets, and have an
aggregate premium of $9,520,000. Upon closing of the Acquisition, such debt,
together with the accrued interest and premium thereon, will be exchanged for
13,2000,000 shares of Registrant Common Stock. Of this number of shares,
beneficial ownership of 8,800,000 will be attributed to Mr. Bernbaum. The
8,800,000 shares includes 6,400,000 shares to be held by Medstar Southbeach
Marina Partnership II, an Ontario, Canada limited partnership, on behalf of
which Mr. Bernbaum serves as trustee and has sole beneficial ownership and
2,400,000 shares will be held by Knightsbridge Financial Services Ltd., 50% of
the outstanding securities of which are held by a trust, the trustee of which is
Mr. Bernbaum's spouse.
Since March 1, 2000, Mr. Bernbaum and the companies for which he acts
in the capacity of trustee, officer, or director loaned an additional $850,000
aggregate principal amount to Sequel. Such loans accrue interest at the rate of
18% per annum, mature on the earlier of January 31, 2001 and the fifth business
day following the closing of the initial public offering of securities of Sequel
(or the Registrant following the closing of the Acquisition), and have a
aggregate premium of $1,700,000. Mr. Bernbaum has agreed to waive the payment of
the accrued interest and premium effective upon the closing of the Acquisition.
The principal amount of such loan will be repaid by the Registrant out of
proceeds of anticipated future financings and available cash.
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The information contained herein concerning Sequel and the executive
officers and directors of the Registrant following the closing of the
Acquisition has been furnished to the Registrant by Sequel. The Registrant
assumes no responsibility for the accuracy or completeness of such information.
