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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 (FEE REQUIRED)
Date of Report: May 11, 1996
PRO-DEX, INC.
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(Exact Name of Registrant as Specified in its Charter)
Commission File No. 0-14942
Colorado 84-1261240
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State or Other Jurisdiction of I.R.S. Employer Identi-
Incorporation or Organization) fication Number)
1401 Walnut Street, Suite 500, Boulder, CO 80302
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(Address of Principal Executive Offices, Including Zip Code)
Registrant's Telephone Number, Including Area Code: (303) 443-8165
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 1. Changes in Control of Registrant. None.
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ITEM 2. Acquisition or Disposition of Assets. On May 11, 1996 Registrant and
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Registrant's newly formed wholly owned subsidiary, Pnu-Light Acquisition
Corporation, a Colorado corporation (the "Pnu-Light Subsidiary"), acquired
substantially all the assets of Pnu-Light Tool Works, Inc., a Missouri
corporation ("Pnu-Light Tools") including a letter patent relating to pneumatic
light mechanisms to be used in conjunction with hand-tools (the "Patent"), from
Pnu-Light Tools and Marty J. Anderson, an individual resident of Missouri
("Anderson"), pursuant to an Asset Purchase Agreement dated May 11, 1996 among
Registrant, Pnu-Light Subsidiary, Pnu-Light Tools and Anderson (the "Asset
Purchase Agreement"). The assets of Pnu-Light Tools were acquired by Registrant
and the Pnu-Light Subisidiary subject to liabilities in respect thereof, and the
Pnu-Light Tools assets, net of liabilities, had a net book value of
approximately $93,000, not including any value for the Patent and related
intellectual property. The initial consideration for acquisition of Pnu-Light
Tools assets, including the Patent, was issuance of 368,483 restricted shares of
Registrant's common stock. Additional consideration is payable by issuance of
additional stock, based upon an interim calculation as of December 31, 1997, and
a final calculation as of June 30, 1999. The total purchase price is to equal
five (5) times the net after tax earnings of the Pnu-Light Subsidiary for the
year ending June 30, 1999, with a minimum total consideration of $4 million
giving credit against such minimum for (a) the greater of (i) the fair market
value of Registrant's stock previously issued as consideration, as of the date
issued or (ii) the fair market value of Registrant's stock previously issued as
consideraton, as of June 30, 1999, (b) patent related costs incurred by
Registrant or the Pnu-Light Subsidiary subsequent to closing, (c) excess
payables assumed by Registrant or the Pnu-Light Subsidiary, and (d) initial
research and development costs incurred in the first 120 days after closing. In
addition, Registrant, at Registrant's sole option, may unwind the transaction at
any time prior to payment of final consideration as of June 30, 1999, provided
that the value of total consideration payable at 5 times net after tax earnings
shall not then exceed $4 million. See Item 5, "Other Events."
ITEM 3. Bankruptcy or Receivership. None.
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ITEM 4. Changes in Registrant's Certifying Accountant. None.
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ITEM 5. Other Events. The following events have occurred with respect to
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Registrant:
Registrant has acquired a new operating subsidiary to add to its existing
five subsidiaries in the medical and dental tools, medical and dental technology
and management business. The Company's newly formed wholly owned subsidiary,
Pnu-Light Acquisition Corporation ("Pnu-Light Subsidiary") has acquired
substantially all the assets of Pnu-Light Tool Works, Inc. ("Pnu-Light Tools"),
a business which has developed a patented pneumatic light system for hand-tools
to be used in dental, medical and industrial applications. Prior to Registrant
acquiring the assets of Pnu-Light Tools, Registrant's Micro Systems Acquisition
Corporation ("Micro Motors")
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subsidiary had manufactured the patented tools in its Micro Motors facility in
California, under contract with Pnu-Light Tools. Registrant anticipates that
the manufacturing and development relationships will continue between its Micro
Motors and Pnu-Light subsidiaries.
Employment and Non-Competition Agreements. In addition to assuming certain
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duties to provide further information to complete the transfer of technical
information in connection with the assignment of the Patent relating to his
inventions, Anderson has agreed to be employed by Registrant's Challenge
Products, Inc. subsidiary ("Challenge"), under a three (3) year Employment
Agreement between Anderson, Challenge and the Pnu-Light Subsidiary. Anderson is
also obligated under a Non-Competition Agreement not to compete, directly or
indirectly, with the businesses of the Pnu-Light Subsidiary or Registrant, or
any business which continues such businesses, whether undertaken by the Pnu-
Light Subsidiary, Registrant or any successor. The aggregate consideration for
the Consulting Agreement and the Non-Competition Agreement is $180,000, and
there are cross-default provisions between such agreements and the Asset
Purchase Agreement.
Stock Issuance to Pnu-Light Tools. On May 11, 1996, in connection with the
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acquisition of substantially all the assets of Pnu-Light Tools, Registrant
issued 368,483 shares of restricted common stock to Pnu-Light Tools,
representing 4.09% of the then issued and outstanding shares of Registrant's
common stock under Section 4(2) of the Securities Act of 1933, as amended (the
"Act") and Rule 506 of Regulation D promulgated thereunder. Accordingly, all
shares issued or to be issued by Registrant in connection with the Asset
Purchase Agreement are and will be when issued restricted shares in the hands of
the Shareholders, pursuant to a Subscription Agreement executed by Pnu-Light
Tools and a Shareholder's Agreement among the Registrant's new shareholder and
Registrant, all executed on May 11, 1996, prior to delivery of the certificate
representing the shares issued pursuant to the Asset Purchase Agreement. The
certificate delivered to Pnu-Light Tools in respect of its shares in Registrant
pursuant to the Asset Purchase Agreement set forth that the shares represented
by such certificate are restricted pursuant to a Shareholder's Agreement and
cannot be sold unless subject to a Registration Statement filed under the
Securities Act of 1933, as amended (the "Act") or a valid exemption from the
requirements of registration under the act, whether pursuant to Rule 144 or
otherwise, demonstrated by the transferor to the Registrant's satisfaction. In
addition, such shares are not transferable until after termination of the
unwinding option of Registrant under the Asset Purchase Agreement by
Registrant's written waiver of such option or payment of final consideration
under the Asset Purchase Agreement. Further, Pnu-Light Tools agreed not to
dissolve or otherwise to distribute Registrant's shares to Pnu-Light Tool's
shareholders prior to termination of transfer restrictions under the
Shareholder's Agreement.
Limited Registration Rights. The Asset Purchase Agreement affords limited
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concurrent registration rights to Pnu-Light Tools, to require registration of
any of the shares issued pursuant to the Asset Purchase Agreement which were
issued not less than twelve (12) nor more than thirty-six months prior to the
date of filing of any registration statement by the Company, provided that no
registration or sale pursuant to the concurrent registration right shall occur
prior
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to the time for payment of final consideration under the Asset Purchase
Agreement or when there shall be a dispute regarding the amount of final
payment. Any underwriter of a firmly underwritten offering can notify
Registrant that inclusion of the shares held by Pnu-Light Tools would adversely
affect the marketing of the offering, in which event the shares held by Pnu-
Light Tools can be omitted from the offering. All costs in connection with any
registration or underwriting involving the shares acquired by Pnu-Light Tools
are to be borne ratably among the selling parties, in proportion to the shares
registered pursuant to any such registration statement.
ITEM 6. Resignations of Registrant's Directors. None.
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ITEM 7. Financial Statements and Exhibits. The audited financial statements of
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Pnu-Light Tool Works, Inc. will be provided by amendment to this Form 8-K within
the time required, together with pro-forma Consolidated and Consolidating
Financial Statements of Registrant, taking account of the acquisition of assets
of Pnu-Light Tool Works, Inc.
ITEM 8. Changes in Fiscal Year. None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, thereunto duly authorized.
PRO-DEX, INC.
By: /s/ George J. Isaac
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George J. Isaac, Vice President and
Chief Financial Officer
May 11, 1996
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