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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): December 1, 1998
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Connectivity Technologies Inc.
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(exact name of registrant as specified in its charter)
Delaware 0-12113 94-2691724
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
680 Mechanic Street, Ste 1201, PO Box 786, Leominster, Massachusetts 01453
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(Address of principal executive offices) (zip code)
Registrant's Telephone Number, including Area Code: (978) 537-9138
N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
The Registrant, Connectivity Technologies, Inc., which, together with
its subsidiary, Connectivity Products Incorporated ("CPI"), is hereinafter
called "Connectivity," is in continuing active discussions with its Lending
Banks looking to the possible restructuring of CPI's Bank debt into an ongoing
loan facility or facilities which may include an asset-based loan and to
provide for its future credit requirements. The new arrangement, as
contemplated by Connectivity, would replace CPI's previously reported and now
expired Forbearance Agreement with the lending Banks. Throughout the term of
that Agreement, CPI was in full compliance with all of its terms and
conditions, including covenants related to revenue and profitability. The
restructuring would include the immediate repayment to the Banks of more than
$1 million in cash generated from operations in recent months. On the basis of
recent discussions, Connectivity believes that such a restructuring will be
achieved and that the Banks will not demand immediate payment while the
discussions continue in a manner that the Banks, at their discretion believe to
be productive, though they would have the right to do so.
However, no assurances can be given that a restructuring or any other
arrangement with the Banks will be concluded; the Banks have made no commitment
and, having retained unwaived all of their rights under the existing Revolving
Credit and Term Loan Agreement, remain free to demand payment and to proceed at
any time against CPI and its assets for the full outstanding debt amounting to
approximately $16.6 million, prior to the contemplated repayment referred to
above. Moreover, any new facility would involve financial and other conditions
for further borrowing and for the continuance of the existing indebtedness. The
failure to conclude a restructuring or the failure to meet any such conditions
could have a substantial adverse effect upon Connectivity and its business and
prospects.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
None.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.
This Report contains, in addition to historical information,
forward-looking statements. In certain instances, Connectivity has identified
these forward-looking statements by words such as "believes", "as conceived by"
and similar expressions. Connectivity cautions readers that these
forward-looking statements are subject to a variety of risks and uncertainties.
Typical risks and uncertainties include, but are not limited to, whether the
Banks will agree to a restructure of CPI's Bank debt, whether the Banks will
continue to refrain from exercising their rights under the Revolving Credit and
Term Loan Agreement while discussions are continuing and the consequences of an
unfavorable outcome to such discussions or of CPI's failure to comply with
covenants and other factors discussed from time to time in Connectivity's
reports filed with the Securities and Exchange Commission including
Connectivity's Form 10-KSB for the year ended December 31, 1997 and prior and
subsequent reports on Forms 10-Q and 8-K. Any forward-looking statements are
made pursuant to the Private Securities Litigation Reform Act of 1995 and, as
such, speak only as of the date made. Connectivity has not undertaken and does
not intend to update any information in this or any previous report.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CONNECTIVITY TECHNOLOGIES INC.
(Registrant)
Dated: December 1, 1998 By: /s/ George H. Buckham
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Name: George H. Buckham
Title: Secretary
