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
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Date of Report (Date of earliest event reported) January 24, 2000
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Puradyn Filter Technologies Incorporated
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(Exact name of registrant as specified in its chapter)
Delaware 0-29192 14-1708544
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3020 High Ridge Road, Suite 100, Boynton Beach, Florida 33426
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(Address of principal executive offices) (Zip Code)
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(Former name or former address, if changed since last report)
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ITEM 5. Other Events.
In November, 1999, the Company, Quantum Industrial Partners LDC ("QIP"), a
shareholder and holder of $2,500,000 notes payable, and Richard C. Ford, Chief
Executive Officer, member of the Board of Directors, shareholder of the Company
and holder of $150,000 notes payable, agreed to restructure certain notes and
loans payable by the Company. Under the plan, certain notes and loans would be
exchanged for shares of the Company's Common Stock, certain accrued and unpaid
interest would be waived and certain outstanding warrants to purchase shares of
the Company's Common Stock would be surrendered. Furthermore, the Company
planned to sell 3,500,000 shares at $1.00 per share through a private offering
memorandum in order to raise cash for working capital and other purposes,
underwhich QIP would purchase 1,000,000 shares. Solicitation under the private
offering began December 9, 1999.
On January 24, 2000, the Company completed the exchange of its $2,500,000 12%
Senior Subordinated Convertible Notes due 2003 issued to QIP for 2,500,000
shares of its Common Stock. In connection with the exchange, QIP agreed to waive
payment of approximately $610,000 of accumulated, unpaid interest and also
agreed to surrender warrants to purchase 500,000 shares of the Company's Common
Stock at $2.75 per share without consideration.
The notes were issued to QIP in June, 1997 in the amount of $2,000,000 and in
January, 1997 in the amount of $500,000. On January 28, 1998 the Company and QIP
entered into a Note Exchange Agreement whereby the promissory notes were
exchanged for 12% Senior Subordinated Convertible Notes due 2003. Interest was
payable quarterly however under provisions of the agreement, the Company elected
to add such unpaid interest to the principal balance of the notes with interest
at 15% per annum. The note was redeemable at the option of QIP on or after the
earlier of January 1, 2001 or the date on which the Company raises cash proceeds
aggregating $10 million from the sale of debt or equity securities or assets.
The Company was prohibited from paying dividends, purchasing, redeeming or
acquiring any of its Common Stock or retiring existing indebtedness. The notes
were convertible into shares of Common Stock at a conversion price of $2.75 per
share. The warrants to purchase 500,000 shares of the Company's Common Stock was
issued in connection with the notes and expired on December 31, 2000.
On January 24, 2000, Richard C. Ford, exchanged $150,000 of notes payable issued
by the Company for 150,000 shares of the Company's Common Stock. In addition, he
agreed to waive payment of approximately $24,000 of accumulated unpaid interest.
Mr. Ford had loaned the Company $110,000 on May 21, 1998 and $40,000 on June 24,
1998 for notes payable with interest at 12% and secured by accounts receivable
and inventories.
Also on January 24, 2000, Richard C. Ford and Traci M. Ford, his daughter, paid
on behalf of the Company $525,000 borrowed from a bank under a revolving loan
agreement and simultaneously agreed to convert that amount into 525,000 shares
of the Company's Common Stock (425,000 shares to Mr. Ford and 100,000 shares to
Ms. Ford).
The Company had converted previous borrowings from its bank into a revolving
line of credit on January 21, 1999 and increased its borrowing at that time to
$350,000. The bank loan was due on demand with maturity one year later, and bore
interest at the bank's prime rate (7.75% at inception). On March 25, 1999, the
Company increased the amount of the line of credit and the amount borrowed to
$525,000, and the maturity date was extended to March 25, 2000. The revolving
line of credit was secured substantially by all assets of the Company and by
certificates
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of deposit in the name of Richard C. Ford which were held by the bank. The
revolving line of credit was also personally guaranteed by Mr. Ford.
On February 8, 2000 Joseph V. Vittoria was appointed to the Board of Directors
and also appointed as its Chairman. Mr. Vittoria is presently Chairman and Chief
Executive Officer of Travel Services International, Inc.. Mr. Vittoria was
previously associated with Avis, Inc., for 15 years, serving as President and
Chief Operating Officer for the period from 1982 to 1987 and as Chairman and CEO
from 1987 to 1997. Mr. Vittoria also serves on the Boards of Directors of Sirius
Satellite Radio, Inc., Carey International, Inc., ResortQuest International,
Inc., and Membertek International, Inc.
On February 28, 2000, the Company completed a private offering of shares of its
Common Stock with subscriptions for 4,172,000 shares at $1.00 per share.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PURADYN FILTER TECHNOLOGIES INCORPORATED
By: /s/ Alan J. Sandler
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Alan J. Sandler, Vice President
March 3, 2000
