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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) APRIL 22, 1998
AXCESS INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-11933 85-0294536
(State or other jurisdiction of (Commission File Number) (I.R.S. employer
incorporation or organization) identification no.)
3208 COMMANDER DRIVE, CARROLLTON, TEXAS 75006
(Address of principal executive offices) (Zip Code)
(972) 407-6080
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
NASDAQ LISTING.
AXCESS Inc.'s (formerly Lasertechnics, Inc.; the "Company") common
stock is listed on the Nasdaq SmallCap Market, which requires maintenance of
certain quantitative and other standards for continual listing thereon. In its
quarterly report on Form 10-QSB for the fiscal quarter ended September 30, 1997,
the Company reported total stockholders' equity of approximately $1.3 million,
down from approximately $5.3 million at June 30, 1997, reflecting the Company's
consolidated net loss applicable to common stock for the three month period
ending September 30, 1997 of approximately $4.7 million, partially offset by
conversions into common stock of outstanding convertible notes. On November 17,
1997, Nasdaq advised the Company that the Company was not in compliance with the
listing requirements of the Nasdaq SmallCap Market then in effect (the "Old
Nasdaq Listing Requirements") which required a minimum bid price of $1.00 per
share or, as an alternative if the bid price is less than $1.00, maintenance of
capital and surplus of $2,000,000 and a public float of $1,000,000. The Nasdaq's
letter stated that no delisting action with respect to the bid price deficiency
would be initiated at that time and that the Company would be provided 90
calendar days in which to regain compliance with either the minimum bid price or
the alternative stockholders' equity/ public float requirement.
On August 22, 1997, the Securities and Exchange Commission approved the
New Nasdaq Listing Requirements (as defined below) for continued listing on the
Nasdaq SmallCap Market, which became effective on February 28, 1998. In
particular, the New Nasdaq Listing Requirements require that a Company currently
included in Nasdaq meet each of the following standards to maintain its
continued listing: (i) either (A) net tangible assets (defined as total assets,
minus goodwill, minus total liabilities) of $2 million, (B) total market
capitalization of $35 million, or (C) net income (in the latest fiscal year or
in two of the last three fiscal years) of $500,000; and (ii) public float of at
least 500,000 shares, with a market value of at least $1 million; and (iii)
minimum bid price of $1.00 per share; and (iv) at least two market makers; and
(v) at least 300 round lot beneficial shareholders; and (vi) compliance with
certain corporate governance requirements (the "New Nasdaq Listing
Requirements").
Subsequent to December 31, 1997, Antiope Partners L.L.C. and Amphion
Ventures L.P. ("Amphion Ventures") purchased $1.9 million in shares of a new
series of convertible preferred stock (the "Series G Preferred Stock"). In
addition, Amphion Ventures committed to purchase up to an additional $5,500,000
of Series G Preferred Stock or another new series of preferred stock to fund the
Company's operations and provide for the continued maintenance of the Company's
net tangible assets above the New Nasdaq Listing Requirements.
As of February 28, 1998, the Company's net tangible assets were in
excess of the $2 million threshold established by the New Nasdaq Listing
Requirements. Further, as of April 2, 1998, the first full trading day after the
Company gave notice to Nasdaq that the 1-for-20 reverse stock split of the
Company's common stock was approved by its stockholders at a special meeting on
March 31, 1998, the closing bid price of the common stock was $5.00 per share,
which is in excess of the minimum bid price of $1.00 per share established by
the New Nasdaq Listing requirements.
By letter dated April 15, 1998, Nasdaq advised the Company that it was
in compliance with the New Nasdaq Listing Requirements and approved the
Company's continued listing on Nasdaq. As a
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condition to its continued listing, the Company agreed not to redeem, repurchase
or reacquire any series of preferred stock in any transaction or series of
transactions which would cause the Company's net tangible assets to fall below
the new Nasdaq Listing Requirements so long as they apply to the Company.
Although management believes that the Company will be able to preserve the
listing of its common stock on the Nasdaq SmallCap Market, there can be no
assurance, however, that the Company's continued losses or other factors beyond
the control of the Company will not cause the Company to fail to meet the New
Nasdaq Listing Requirements.
XEROX SETTLEMENT.
The Company has had discussions with Xerox Corporation ("Xerox")
regarding the scope of the Company's license for DataGlyphs(TM), a 2-D symbology
developed by Xerox. In 1995, the Company was granted an exclusive license from
Xerox, for an initial license fee of $2.1 million, for the right to develop and
sell products utilizing DataGlyphs(TM) for the secured access industry. The
royalty obligation was evidenced by the Company's promissory note payable to
Xerox, due in three equal annual principal installments, plus interest,
beginning December 1997. In December 1997, the Company notified Xerox that it
would not make the payment due under the note, pending satisfactory resolution
of the Company's concerns regarding the technological applicability of the
products and services provided by Xerox to the Company pursuant to its license
and the payment due in respect thereof. Xerox advised the Company in writing
that it believed payment under the note was past due. To date, the Company has
not recognized any sales revenue related to the DataGlyphs(TM) Technology.
The Company and Xerox have entered into a settlement agreement pursuant
to which the Company has agreed to pay Xerox $1.47 million of the initial
license fee and issue Xerox 120,000 (post reverse split) shares of the Company's
common stock. Xerox has agreed not to sell any of those shares until December
1999, at which time shares may be sold subject to certain limitations. The
Company will fund the payment to Xerox from proceeds received from Amphion
Ventures under the terms of a two-year loan which bears interest at the rate of
10% per annum. In addition, Amphion Ventures will receive, as a loan origination
fee, (i) 15,120 shares of restricted Common Stock with a fair value of
approximately $66,150 as of the date of issuance and (ii) 3-year warrants to
purchase 14,700 shares of Common Stock with an exercise price of $5.00 per share
and with a fair market value of approximately $64,312 as of the date of
issuance.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Listed below is the exhibit filed as a part of this report.
99.1 -- Settlement Agreement dated April 20, 1998, by and between the
Company and Xerox Corporation.*
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* Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, AXCESS
Inc. has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: April 22, 1998 AXCESS INC.
By: /s/ Danny G. Hair
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Danny G. Hair, Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT
99.1 -- Settlement Agreement dated April 20, 1998, by and
between the Company and Xerox Corporation.*
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* Filed herewith.
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EXHIBIT 99.1
THIS SETTLEMENT AGREEMENT is made this 20th day of April, 1998, by and between
Lasertechnics Inc., a Delaware Corporation with offices at 3208 Commander Drive,
Carrollton, Texas (LASX) and Xerox Corporation, a New York Corporation with
offices at 3400 Hillview Road, Palo Alto, California (Xerox) to resolve a
dispute regarding that certain agreement between Sandia and Xerox dated January
12, 1995, as the same has been previously amended by Agreement dated December
27, 1996 (hereinafter, collectively, the "Prior Agreement") and that certain
Promissory Note made by LASX in the favor of Xerox, in the principal sum of
$2,100,000 and dated December 26, 1996 (hereinafter the "Note").
WHEREAS the parties have mutually agreed to resolve certain outstanding business
issues between them related to the Prior Agreement and the Note upon the terms
and conditions set forth in this Settlement Agreement; and
WHEREAS the parties have agreed as set forth in this Settlement Agreement;
NOW, THEREFORE, it is agreed by and between the parties as follows:
1. PRIOR AGREEMENT: Except as modified by this Settlement Agreement, all of the
terms and conditions of the Prior Agreement (and all amendments thereto entered
into prior to the date of this Settlement Agreement) shall remain in full force
and effect, and the parties hereby ratify such Prior Agreement and their
obligations thereunder.
2. Immediately upon execution of this Settlement Agreement, Xerox shall
discharge the Note referenced above (including all interest previously accrued
thereupon) and the payment obligation of paragraph 3.1 of the December 27, 1996
amendment to the Agreement , and such Note and payment obligation shall be
without further force or effect.
3. LASX shall, upon execution of this Agreement by the parties, immediately pay
to Xerox the sum of One Million Four Hundred Seventy Thousand Dollars
($1,470,000) in the form of cash, a cashier's check or other payment method
acceptable to Xerox.
4. LASX shall issue to Xerox One Million Eight Hundred Thousand Shares of its
common stock on a pre-split basis upon execution of this Settlement Agreement.
The parties acknowledge that all reference herein to shares of LASX refer to
voting common stock of par value of $0.01 per share of LASX before giving effect
to the proposed reverse stock split. Such shares shall be in
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addition to those certain Six Hundred Thousand (600,000) shares of such LASX
commons stock currently held by Xerox in escrow under the Prior Agreement and
Note. Such escrowed shares shall be reissued by LASX in the name of Xerox
Corporation and share certificates for the total of Two Million Four Hundred
Thousand shares of the pre-split common stock of LASX shall be delivered to
Xerox or its nominee as soon as practicable. All share certificates evidencing
the shares set forth in this paragraph shall contain the following restrictions
and legend: (a) Xerox shall not be entitled to sell any of such shares to any
third party until December 1, 1999 or such time as LASX (or its subsidiary,
Sandia) shall first deliver a product for sale, rental or license (other than a
demonstration unit) to any customer containing or embodying in any manner the
glyph technology of Xerox (whether provided under the Prior Agreement or by
subsequent agreement between LASX and the Intran or any other business unit of
Xerox), whichever shall first occur, (b) in no event shall Xerox dispose of more
than 240,000 shares (pre-split) in any calendar month, and (c) LASX shall at all
times have the right, upon notice to Xerox, to repurchase any shares then still
held by Xerox at the agreed purchase price of $0.325 per share.
5. In addition to the foregoing, LASX shall pay to Xerox the sum of Four Hundred
Thousand Dollars ($400,000) upon the following event, should such event occur at
any time: the delivery of a product for sale, rental or license (other than a
demonstration unit) by LASX or Sandia which contains, is derived from or
embodies in any manner the glyph technology of Xerox (whether provided under the
Prior Agreement or by subsequent agreement between LASX/Sandia and the Intran or
any other business unit of Xerox). Such payment shall be in addition to, and not
in derogation of or substitution for, any royalties that would otherwise be
payable to Xerox under the terms of the Prior Agreement subject to Section 7 and
8 of this Settlement Agreement.
6. Notwithstanding anything in the Prior Agreement to the contrary, Xerox shall
be released from the obligation to provide Sandia and LASX the 30% of one
dedicated person resource full time for the support of the glyph technology
previously provided to Sandia under the Prior Agreement. LASX and Sandia may
contract, under a separate agreement to be negotiated by the parties for such
additional or other support for glyph technology or new or other glyph
technology as the parties shall deem appropriate. Xerox will lend its reasonable
support, without cost to Sandia, to enable Sandia or LASX to meet with the
Intran business unit for the purpose of Intran engaging Sandia or LASX as a
customer, but shall have no other obligation other than attempting to arrange
such a meeting. In the event Sandia enters into an agreement with the Intran
business unit, the Intran business unit shall assume all responsibility for the
business relationship with Sandia/LASX. In the event Sandia/LASX does not enter
into an agreement with Intran, the relationship will remain between the
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existing parties. The parties to this Settlement Agreement acknowledge that the
sums set forth above do not constitute nor entitle Sandia or LASX to services
provided by Intran or any other business unit of Xerox, which shall be the
subject of a separate agreement between those organizations. LASX and Sandia
acknowledge and agree that nothing set forth in this Settlement Agreement
entitles it to any other or additional glyph technology from Xerox unless it
contracts with the Intran or any other business unit of Xerox for same, except
as expressly set forth in Section 7 of this Settlement Agreement.
7. Notwithstanding paragraph 6 above, Sandia shall be given, without additional
payment to Xerox other than those set forth in this Settlement Agreement, the
Intran Data Glyphs Software Developers Toolkit for one of the supported
platforms upon execution of the Intran standard developer evaluation agreement,
which agreement will allow Sandia the full access to and use of all Intran data
glyph technology provided by such toolkit for internal evaluative purposes only,
until such time as Sandia/LASX delivers a LASX/Sandia product which contains, is
derived from or embodies such glyph technology (other than a demonstration unit)
by means of sale, rental or license, at which time the provisions of sections 5
and 8 of this Settlement Agreement shall apply. Any work required by LASX/Sandia
from Intran other than as set forth in this paragraph and in the standard Intran
developer evaluation agreement, such as modification, porting or support of the
Data Glyphs Software Developers Toolkit, will be negotiated by the parties in
accordance with paragraph 6 of this Settlement Agreement.
8. LASX/Sandia shall pay to Xerox the royalties set forth in the Prior
Agreement in the event, at any time, delivers for sale, rental or license a
product (other than a demonstration unit) containing, derived from or embodying
in any manner the glyph technology which is the subject of the Prior Agreement.
The parties agree, however, that if such product of LASX or Sandia contains, is
derived from or embodies in any manner, any glyph technology obtained from the
Intran or any other business unit of Xerox under a separate agreement between
those parties, no royalties shall be payable to Xerox under Exhibit A of the
Prior Agreement, and the only royalties for which LASX and Sandia shall be
liable beyond those payments described in this Agreement shall be those set
forth in such separate agreement between LASX/Sandia and Intran or any other
business unit.
9. Except as expressly set forth in this Settlement Agreement, all other terms
and conditions of the Prior Agreement shall remain in full force and effect.
10. This Settlement Agreement sets forth the full and complete understanding of
the parties with respect to the subject matter hereof, and all prior
discussions,
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documents and representations of either party shall be merged
herein (except as set forth in otherwise unmodified provisions of the Prior
Agreement).
11. This Settlement Agreement shall be interpreted and construed in
accordance with the law of the State of California, without regard to its
conflict of laws rules.
IN WITNESS WHEREOF, the parties have executed this Settlement Agreement on the
date first above set forth.
XEROX CORPORATION LASERTECHNICS, INC.
By: /s/ By: /s/
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