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
Date of Report (Date of earliest event reported): September 23, 1999
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COMPASS PLASTICS & TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-23027 95-4611994
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number Identification No.)
15730 South Figueroa Street, Gardena, California 90248
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (323) 770-8771
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CURRENT REPORT ON FORM 8-K
COMPASS PLASTICS & TECHNOLOGIES, INC.
September 23, 1999
Item 2. Acquisition or Disposition of Assets
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On August 30, 1999, Compass Plastics & Technologies, Inc., through its
wholly owned subsidiary AB Plastics Corporation, completed the sale of its
Tijuana, Mexico operation for $5.1 million. Proceeds from the sale were used to
repay equipment loan obligations to GE Capital Corporation and Phoenixcor
Financial Services, and amounts owing under the Company's commercial loan
agreement with California Bank & Trust and Manufacturers Bank. Ghias & Friends,
Inc d/b/a Dynamic Plastics ("Dynamic"), a newly formed corporation made up in
part of 8 senior members of AB Plastics' management including Jawed Ghias, vice
president - manufacturing, purchased certain assets of AB Plastics including
certain trade accounts receivable, inventory, machinery and equipment located in
Tijuana, and the common stock of AB Plastics de Mexico, S.A. de C.V. ("ABT"), an
AB Plastics subsidiary. Dynamic assumes certain liabilities including certain
trade accounts payable, certain employee benefit liabilities, and certain
liabilities of ABT. A copy of the Asset Purchase Agreement is attached hereto as
Exhibit 10.25.
Item 6. Resignations of Directors
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Jay Swanson resigned as a director of the Company on July 30, 1999.
Christopher H.B. Mills resigned as a director of the Company on August 4, 1999.
Geoffrey J.F. Gorman resigned as Chairman of the board and as a director of the
Company on August 16, 1999. No replacements are expected and the by-laws of the
Company have been amended to allow for Michael Gibbs to act as the sole director
of the Company.
Item 7. Financial Statements and Exhibits
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(a) Financial Statements of Businesses Acquired
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Not Applicable.
(b) Pro Forma Financial Information
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Not Applicable.
(c) Exhibits
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10.25 Asset Purchase Agreement dated as of August 30,1999, between
AB Plastics Corporation and the Company, and Ghias & Friends,
Inc. d/b/a Dynamic Plastics Corporation.*
99.2 Press release issued by the Company on September 23, 1999
* To be filed by amendment to this Form 8-K.
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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.
COMPASS PLASTICS & TECHNOLOGIES, INC.
Date: September 23, 1999 By: /s/ Michael A. Gibbs
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Michael A. Gibbs
President
FOR FURTHER INFORMATION:
COMPASS PLASTICS & TECHNOLOGIES, INC.
15730 South Figueroa Street
Gardena, Ca. 90248
(323) 770-8771
Contact : Paul J. Iacono
Chief Financial Officer
COMPASS COMPLETES SALE OF MEXICO OPERATIONS AND FILES BANKRUPTCY
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Gardena, California (September 28, 1999)---Compass Plastics & Technologies, Inc.
(NASDAQ Symbol:CPTI) announced today it has completed the sale of its Tijuana,
Mexico operation for $5.1 million. Proceeds from the sale were used to repay
equipment loan obligations to GE Capital Corporation and Phoenixcor Financial
Services, and amounts owing under the Company's commercial loan agreement with
California Bank & Trust and Manufacturers Bank.
Ghias & Friends, Inc d/b/a Dynamic Plastics ("Dynamic"), a newly formed
corporation made up in part of 8 senior members of AB Plastics' management
including Jawed Ghias, vice president - manufacturing, purchased certain assets
of AB Plastics including certain trade accounts receivable, inventory, machinery
and equipment located in Tijuana, and the common stock of AB Plastics de Mexico,
S.A. de C.V. ("ABT"), an AB Plastics subsidiary. Dynamic assumes certain
liabilities including certain trade accounts payable, certain employee benefit
liabilities, and certain liabilities of ABT.
The Tijuana operation was the last remaining operating facility after the
Company closed its Gardena, Ca. operation and transferred its business to the
Tijuana plant on June 4, 1999. The Company sold its MOS Plastics subsidiary in
May 1999. The Company is in the process of selling its only remaining equipment,
located in Gardena, through private sales or public auction expected to be
completed by the end of October 1999. The sale of the Gardena assets is expected
to net approximately $2 million in proceeds. The complete liquidation of the
Company's assets was necessitated by the Company's inability to service its
debt. The Company has been in payment default of $9 million of subordinated debt
since December 1998 and has been unable to service approximately $4 million of
equipment debt since March, 1999. The Company also defaulted, and the banks
accelerated payment of approximately $16 million of senior secured bank debt on
February 2, 1999, however the banks continued to provide working capital on a
completely discretionary basis to effect the liquidation.
Following the above transactions, Compass and its subsidiaries will have
approximately $15 million of secured senior and subordinated debt outstanding
and approximately $4 million of trade and other unsecured liabilities.
Compass Plastics & Technologies, Inc., through its wholly-owned subsidiary, AB
Plastics Corporation was a contract manufacturer and assembler of custom
injection-molded plastic components in the western United States and Baja,
Mexico. The Company manufactured the plastic exteriors of computer monitors,
televisions, and other consumer products.
THE STATEMENTS IN THIS NEWS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM
PREDICTED RESULTS. THESE RISKS ARE FURTHER DISCUSSED IN THE FORM 10-Q AND ANNUAL
REPORT FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE RESULT OF ANY REVISIONS
TO THESE FORWARD-LOOKING STATEMENTS.
