SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) - May 5, 1998
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AMERICAN ELECTROMEDICS CORP.
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(Exact name of registrant as specified in its charter)
Delaware 0-9922 04-2608713
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(State or other (Commission File Number) (IRS Employer
jurisdiction Identification
of Incorporation) No.)
13 Columbia Drive, Suite 5, Amherst, New Hampshire 03031
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code -(603) 880-6300
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Not Applicable
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(Former Name or Former Address, if changed since last report)
The purpose of this Amendment is to amend Item 2 in its
entirety to read as set forth herein.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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On May 5, 1998, American Electromedics Corp. (the "Company"
or "AEC") acquired Dynamic Dental Systems, Inc., a Delaware
corporation ("DDS"), in exchange for 750,000 shares of the
Company's Common Stock, $.10 par value (the "Common Stock"), and
$225,000, pursuant to an Agreement and Plan of Merger, dated as
of April 30, 1998, by and among the Company, DDS Acquisition
Corporation, a Delaware corporation and wholly-owned subsidiary
of the Company, DDS, and Henry J. Rhodes, Charles S. Aviles and
Barry A. Hochstadt, the sole stockholders of DDS. Upon the
merger (the "DDS Merger"), DDS became a wholly-owned subsidiary
of the Company.
Upon the closing of the DDS Merger, DDS entered into an
Employment Agreement with Mr. Rhodes pursuant to which he will
serve as President of DDS for an initial term of three years at
an annual base salary of $125,000. Mr. Rhodes was also granted
stock options to purchase up to 100,000 shares of the Company's
Common Stock at an exercise price of $1.00 per share, vested as
of May 1, 1998, and stock options to purchase up to 100,000
shares of the Company's Common Stock at an exercise price of
$3.00 per share, vested as of November 1, 2000. All such stock
options expire five years from the date of grant. The fair
market value of the shares was $3.00 at the closing of the DDS
Merger. The Company will recognize compensation expense of
$200,000 for the fourth quarter of fiscal 1998 with respect to
the 100,000 options which have an exercise price less than the
fair market value of the shares at the time such options were
granted.
DDS is based in Gainesville, Georgia and is a distributor of
digital operator hardware, cosmetic imaging software, and
intraoral dental cameras.
On May 12, 1998, AEC acquired Equidyne Systems, Inc., a
California corporation ("ESI"), in exchange for 600,000 shares of
the Company's Common Stock, pursuant to an Agreement and Plan of
Merger, dated as of March 27, 1998, among the Company, ESI
Acquisition Corporation, a California corporation and a wholly-
owned subsidiary of the Company, and ESI. Upon the merger (the
"ESI Merger"), ESI became a wholly-owned subsidiary of the
Company.
Upon the closing of the ESI Merger, ESI entered into
Employment Agreements with Lawrence Petersen and Richard
Battelle. Mr. Petersen is to serve as President of ESI for an
initial term of three and one-half years at an annual salary of
$125,000. Mr. Petersen was also granted stock options to
purchase an aggregate of 100,000 shares of the Company's Common
Stock, 50,000 of such options at an exercise price of $1.00 per
share, with 5,000 of such options immediately vested and 45,000
of such options to vest ratably over the term of the Employment
Agreement, and the remaining 50,000 of such options at an
exercise price of $3.00 per share, with 5,000 of such options
immediately vested and 45,000 of such options to vest ratably
over the term of the Employment Agreement. Mr. Battelle is to
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serve as Director of Finance and Administration for an initial
term of one year at an annual salary of $60,000, and was also
granted stock options to purchase an aggregate of 40,000 shares
of the Company's Common Stock, 20,000 of such options at an
exercise price of $1.00 per share to vest ratably over the term
of the Employment Agreement, and the remaining 20,000 of such
options at an exercise price of $3.00 per share to vest ratably
over the term of the Employment Agreement. All such stock
options granted to Mr. Petersen and Mr. Battelle expire five
years from the date of grant.
The fair market value of the shares was $3.00 at the closing
of the ESI Merger. In connection with the grant of an aggregate
of 70,000 options which have an exercise price less than the
fair market value of the shares at the time such options were
granted, the Company will recognize the following compensation
expense: $26,000 for the fourth quarter of fiscal 1998, $16,000
per quarter for the first three quarters of fiscal 1999, and then
$6,000 per quarter for the fourth quarter of fiscal 1999 and
continuing through the second quarter of fiscal 2002.
ESI is based in San Diego, California. It is engaged in the
development of the INJEX(TM) needle-free drug injection system,
which is designed to eliminate the risks of contaminated needle
stick accidents and the resulting cross contamination of
hepatitis, HIV and other diseases. ESI holds two patents for the
features of the injection system and has received FDA 510(k)
clearance to market the product in the United States. ESI
anticipates commencing the marketing of the system in late
calendar 1998.
These acquisitions are part of management s strategic plan
to expand the scope of the medical products to be offered by the
Company.
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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.
American Electromedics Corp.
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(Registrant)
By: /s/ Michael T. Pieniazek
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Michael T. Pieniazek,
President
September 14, 1998
