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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): February 15, 1999
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U.S. Technologies Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-15960 73-1284747
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
3901 Roswell Road, Suite 300, Marietta, Georgia 30062
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 565-4311
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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.
On February 12, 1999, Kenneth H. Smith resigned as a director and as
the President and Chief Executive Officer of U.S. Technologies Inc. (the
"Company"). On the same date, the Company and Mr. Smith entered into a Severance
Agreement (the "Severance Agreement"), pursuant to which the Company sold to Mr.
Smith all of the Company's interest in the Company's wholly-owned subsidiary,
GWP, Inc., a Georgia corporation ("GWP"). The Company acquired GWP on October 5,
1998, the same date that GWP acquired 51% of the voting shares of Technology
Manufacturing & Design, Inc., a Texas corporation ("TMD").
The Severance Agreement provides that the price to be paid by Mr. Smith
for GWP, including the 51% interest in TMD owned by GWP, shall be equal to the
Company's total investment, including expenses, in GWP and TMD through February
11, 1999. On February 15, 1999, in payment of the parties' initial estimate of
$2,110,031.52 as the purchase price, Mr. Smith tendered to the Company a cash
payment of $875,199.52 and executed a personal Promissory Note (the "Promissory
Note") in the amount of $1,234,832. The Severance Agreement provides that the
amount of the Promissory Note is subject to adjustment based on the findings of
BDO Seidman, LLP, the independent auditors of the Company, with respect to the
total investment by the Company in GWP and TMD through February 11, 1999, and
that such findings of BDO Seidman, LLP shall be conclusive as to the amount of
the Company's investment and the amount of the adjustment, if any, to the
Promissory Note.
Immediately following the execution of the Severance Agreement by Mr.
Smith, the board of directors of TMD, consisting of Mr. Smith and Larry Little,
caused TMD to file a bankruptcy petition pursuant to Chapter 11 of the
Bankruptcy Code.
In connection with the severance arrangement, Mr. Smith and the Company
entered into a Stock Pledge and Guaranty Agreement ("the Smith Pledge
Agreement"), pursuant to which Mr. Smith pledged 3,000,000 shares of the
Company's common stock to secure the Promissory Note and a personal guaranty by
Mr. Smith of certain obligations of the Company with respect to TMD. In
addition, GWP and the Company entered into a separate stock pledge and guaranty
agreement (the "GWP Pledge Agreement"), pursuant to which GWP pledged of all of
its shares of TMD to secure a guaranty by GWP of certain obligations of the
Company with respect to TMD (the Smith Pledge Agreement and the GWP Pledge
Agreements sometimes referred to herein as the "Pledge Agreements").
On April 1, 1999, following a default under the Pledge Agreements and
the Promissory Note, the Company exercised its rights under the Smith Pledge
Agreement, taking possession of and immediately thereafter selling the 3,000,000
shares pledged by Mr. Smith. The 3,000,000 shares were sold at the closing sale
price on April 1, 1999 of $.35 per share, as quoted on the OTC Bulletin Board
market, a recognized public market for publicly-traded, small-cap companies on
which the Company's shares are traded. The aggregate sales price of $1,050,000,
less the expenses associated with the sale, has been applied in reduction of Mr.
Smith's indebtedness to the Company. The 3,000,000 shares were sold to USV
Partners, LLC ("USV"). In payment of the $1,050,000 sales price, USV executed a
30-day promissory note in favor of the Company. This promissory note is secured
by the 3,000,000 shares of the Company's common
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stock sold to USV. Gregory Earls, the President and Chief Executive Officer of
the Company, is the sole member of USV Management, LLC, the manager of USV.
On April 15, 1999, the Company entered into a forbearance agreement
with Mr. Smith and GWP pursuant to which the parties agreed that the amount of
the deficiency with respect to the Promissory Note was equal to $525,000, and
the Company agreed to refrain from taking any further action with respect
default under the Promissory Note and the Pledge Agreements until the earlier to
occur of (i) June 4, 1999, (ii) the date on which an adverse judgment is
rendered against the Company by any court of competent jurisdiction in
connection with its guaranty of the obligation s of TMD, or (iii) any new
default under the Promissory Note and/or Stock Pledge Agreements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment No. 1 to Current Report on Form 8-K to
be signed on its behalf by the undersigned hereunto duly authorized.
U.S. TECHNOLOGIES INC.
By:/s/ John P. Brocard
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John P. Brocard
Executive Vice President and General Counsel
Dated: April 29, 1999
