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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): April 14, 1999
GLOBAL MAINTECH CORPORATION
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(Exact name of registrant as specified in its charter)
Minnesota 0-14692 41-1523657
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification No.)
7578 Market Place Drive, Eden Prairie, MN 55344
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 944-0400
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
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(a) On April 14, 1999, Global MAINTECH Corporation ("Global MAINTECH")
acquired all of the issued and outstanding Common Stock, $.01 par
value, and Series A Convertible Preferred Stock, $.01 par value
(the "Outstanding Shares"), of Breece Hill Technologies, Inc.
("Breece Hill") in connection with the merger (the "Merger") of BHT
Acquisition, Inc., a wholly owned subsidiary of Global MAINTECH,
Inc., a wholly owned subsidiary of Global MAINTECH, with and into
Breece Hill. In exchange for the cancellation of their Outstanding
Shares, holders of such shares received rights to proportionate
interests in the merger consideration (the "Merger Consideration"),
which consists of a warrant to purchase 4,500,000 shares of Global
MAINTECH Common Stock, no par value (the "Escrow Warrant"), at an
exercise price of $1.50 per share, and an Earn Out Payment to be
made, if at all, in the form of Global MAINTECH Common Stock and
cash.
The Earn Out Payment will equal (a) the Adjusted Sales (as defined
below) less (b) the sum of (i) the Warrant Value (as defined below)
and (ii) the cash and GMC Common Stock valued at $5,000,000
delivered pursuant to Sections 6.04 and 9.01 of the Merger
Agreement (as defined below). At least 15% but not greater than 50%
of the Earn Out Payment will be in the form of cash. The balance of
the Earn Out Payment will be in the form of shares of GMC Common
Stock, valued at a per share price equal to 90% of the average
closing price for the 30 trading-day period ending on the last day
of the Earn Out Period. However, GMC will not be required to
deliver more than 10,000,000 shares of GMC Common Stock, in the
aggregate, under the Earn Out Payment and Escrow Warrant. Subject
to the foregoing, GMC will determine in its sole discretion the
proportion of stock and cash it pays pursuant to the Earn Out
Payment. The Earn Out Period is the 365-day period following the
date on which the Certificate of Merger was filed. The "Adjusted
Sales" figure will be computed according to a formula set forth in
the Merger Agreement. The "Warrant Value" is 4,500,000 multiplied
by the excess, if any, of the average closing bid price for the 30
trading-day period ending on the last day of the Earn Out Period
over the aggregate exercise price of the Escrow Warrant on the last
day of the Earn Out Period. The Merger Consideration is subject to
certain claims of Breece Hill's lenders as set forth in the
Agreement and Plan of Merger (the "Merger Agreement"), dated March
5, 1999, by and among Global MAINTECH, Global MAINTECH, Inc., BHT
Acquisition, Inc. and Breece Hill.
Also in connection with the Merger, Global MAINTECH agreed to
replace all outstanding options to acquire Breece Hill shares with
options to acquire Global MAINTECH Common Stock and to replace
certain warrants to purchase Breece Hill Common Stock with warrants
to purchase Global MAINTECH Common Stock. The description of the
Merger contained herein is qualified in its entirety by reference
to the Merger Agreement, which is incorporated herein by reference
as Exhibit 2.1.
The Merger Consideration was negotiated at arms' length by the
parties. Prior the to closing of the Merger, the holders of the
Outstanding Shares were not affiliated
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with Global MAINTECH. The Merger will be accounted for as a
taxable purchase effective as of March 15, 1999.
(b) The assets of Breece Hill consist primarily of software
inventory, intellectual property rights, property and equipment.
Breece Hill utilizes its assets to supply automated tape
libraries used to back up, restore and archive information stored
in networks on servers, PCs and workstations, and on-line data
storage subsystems. Global MAINTECH expects to continue to use
Breece Hill's assets for the same purpose for the foreseeable
future.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Business Acquired
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The required financial statements of Breece Hill are not included
in this Current Report on Form 8-K. These financial statements
will be provided in an amendment to this Current Report on Form
8-K as soon as practicable, but not later than June 28, 1999.
(b) Pro Forma Financial Information
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The required pro forma financial information incorporating the
financial information of Breece Hill is not included in this
Report on Form 8-K. The pro forma financial information will be
provided in an amendment to this Current Report on Form 8-K as
soon as practicable, but not later than June 28, 1999.
(c) Exhibits
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Exhibit No. Description
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2.1 Agreement and Plan of Merger dated March 5, 1999 by
and among Global MAINTECH Corporation, Global
MAINTECH, Inc., BHT Acquisition, Inc., and Breece
Hill Technologies, Inc. (incorporated by reference
to the registrant's annual report on Form 10-KSB
filed for the year ended December 31, 1998).
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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.
Date: April 29, 1999
GLOBAL MAINTECH CORPORATION
By: /s/ David McCaffrey
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David McCaffrey
Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit
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Number Item
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2.1 Agreement and Plan of Merger dated March 5, 1999 by and among Global
MAINTECH Corporation, Global MAINTECH, Inc., BHT Acquisition, Inc.,
and Breece Hill Technologies, Inc. (incorporated by reference to the
registrant's annual report on Form 10-KSB filed for the year ended
December 31, 1998).
