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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): March 14, 1996
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MEDICAL TECHNOLOGY SYSTEMS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 59-22740462
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION FILE NUMBER) IDENTIFICATION NO.)
12920 AUTOMOBILE BOULEVARD, CLEARWATER, FL 34622
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone Number, including area code (813) 576-6311
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N/A
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. Other Matters
On March 14, 1996, Medical Technology Systems, Inc. ("MTS") authorized the
issuance of up to 2,000,000 shares of common stock to employees and advisors as
part of a Stock Purchase Plan in order to control costs. The Board of Directors
has authorized the issuance of up to 1,602,503 shares of common stock under this
Plan. The remaining 307,497 shares are expected to be issued in the next 60
days under this Plan. The participants received the shares of common stock in
lieu of taking a salary or receiving past due fees. A copy of the Plan is
enclosed herewith as Exhibit "A".
As a result of certain events, the following are certain special considerations
that currently exist affecting the Company.
RECENT BANKRUPTCY FILINGS; GOING CONCERN QUALIFICATION.
On January 3, 1996, three wholly owned subsidiaries of the Company filed
petitions under Chapter 11 of the United Stated Bankruptcy Code. These
divisions were MTS Sales and Marketing, Inc., Medical Technology Laboratories,
Inc. and MTS Packaging Systems, Inc. On approximately February 20, 1996, the
Company also filed a petition under Chapter 11 for its wholly owned subsidiary
Vangard Laboratories, Inc. Although the Company is not involved in a
bankruptcy, all of its operating subsidiaries, except Medication Management
Systems, Inc., are currently involved in a bankruptcy proceeding. These
bankruptcy proceedings are in their early stages and its is impossible to
predict, with any certainty, whether a viable plan of reorganization can be
agreed upon by all parties. Specifically, the Company's primary lending
institutions have made demand for payment on approximately $27,000,000 of
secured debt. If the Company is unable to enter into mutually agreeable
arrangements with its prime lending sources and other unsecured creditors, it
will not be able to structure a viable plan of reorganization. If a viable plan
of reorganization is not agreed upon, then the Company would in all likelihood
be forced into a Chapter 7 liquidation proceeding. In such event there would be
no value to the shares of the Company's Common Stock. Although management is
optimistic, based upon the current tenure and substance of communications with
its lending institutions, that a mutually agreeable restructured financing
package will be attained, there is no assurance that such agreements will in
fact be finalized. Accordingly, substantial doubt exists as to the Company's
ability to continue as a going concern.
NO ASSURANCE OF PUBLIC MARKET; POSSIBLE VOLATILITY OF COMMON STOCK PRICE.
The Company's Common Stock was recently delisted from the NASDAQ - NMS for
failure to maintain current listing requirements. The Company's Common Stock is
currently traded in the non-NASDAQ over-the-counter market. As a result of such
delisting, holders of the Company's Common Stock could find it more difficult to
dispose of, or obtain accurate quotations as to the market value of the
Company's Common Stock. In addition, because the Company's Common Stock has
been delisted from trading on NASDAQ and the trading price of the shares is
below $5.00, trading in the Company's stock is also subject to the requirements
of certain rules promulgated under the Securities Exchange Act of 1934, which
require additional disclosure by broker-dealers in connection with any trades
involving a stock as defined as a penny stock (generally, any non-NASDAQ equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions). Such rules require the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith, and impose various sales practice requirements on
broker dealers who sell penny stocks to persons other than established customers
and accredited investors. The additional burdens imposed upon broker-dealers by
such requirements may discourage broker-dealers from effecting transactions in
the Company's Common Stock, which could severally limit the market liquidity of
the Common Stock and the ability of stockholders to sell the Common Stock on the
secondary market.
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UNCERTAINTY OF FUTURE MARKET PRICE; SHARES ELIGIBLE FOR FUTURE SALE.
The 2,000,000 shares being registered under the Securities Act of 1933, as
amended, pursuant to the companion Form S-8 Registration Statement, relating to
this Form 8-K filing for this Stock Purchase Plan, will, subject to compliance
with applicable state blue sky laws, be freely tradable without restrictions or
further registration under the Securities Act of 1933, as amended (the "Act"),
unless such shares are held by "affiliates" of the Company as that term is
defined under the Act and Rule 144, promulgated under the Act. Other than
shares currently held by affiliates, all of the Company's outstanding Common
Stock is freely tradable under the Act. Because the stock being registered
pursuant to this registration will represent up to approximately 33% of the
outstanding shares of Common Stock after the registration and issuance of these
shares, the sale of a substantial amount of these or other shares in the public
market, or the perception that such sale could occur, could adversely affect
prevailing market prices of the Company's Common Stock. In such event,
employees and consultants who receive shares of the Company's Common Stock
pursuant to the Form S-8 Registration Statement, would not be able to sell such
shares for the same value attributable to the shares in connection with the
registration of such shares. Furthermore, there is no assurance that the
Company would be able to maintain a viable trading market, sufficient market
makers or adequate volume in its Common Stock to maintain a trading market.
[BALANCE OF PAGE LEFT BLANK INTENTIONALLY]
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SIGNATURES
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 thereunto duly authorized.
Medical Technology Systems, Inc.
(Registrant)
By: /s/
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TODD E. SIEGEL
Chief Executive Officer
Date: March 14, 1996
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MEDICAL TECHNOLOGY SYSTEMS, INC.
STOCK PURCHASE PLAN
MEDICAL TECHNOLOGY SYSTEMS, INC., (hereinafter the "Company" which term
also includes all subsidiaries and employees of subsidiaries) hereby adopts this
Stock Purchase Plan (hereinafter the "Plan") for the benefit of certain eligible
employees, consultants and advisors of the Company and its subsidiaries.
RECITALS
A. The Company hereby adopts the Plan for the purpose of providing a
means by which certain eligible employees, consultants and advisors of the
Company and its subsidiaries may purchase the common stock of the Company
through a plan administered by the Company.
B. This Plan is adopted pursuant to a resolution adopted by the Board of
Directors of the Company of even day herewith. By way of background, the Board
of Directors previously approved the 1995 Employee Stock Purchase Plan.
However, recent changes in the affairs of the Company have caused a substantial
reduction in the market value of the Company's shares. Accordingly, the Board
of Directors considers it unfair for participants to receive shares of the
Company's common stock at an exchange value substantially higher than current
market prices. The intent of the Plan is to put participants in at least the
same economic position they would have otherwise been in had such participants
elected to receive cash for their services. Accordingly, this Plan amends and
restates in its entirety the Company's 1995 Employee Stock Purchase Plan, which
is hereby cancelled and replaced by this Plan. In addition, at the current time
the Company does not have available cash resources.
NOW, THEREFORE, the Company hereby adopts the following Stock Purchase Plan
the terms of which are as hereinafter provided:
1. PURPOSE. The purpose of this Plan is to provide a convenient means by
which eligible employees, consultants and advisors of the Company and its
subsidiaries may become shareholders in the Company. The Board of Directors of
the Company believes it to be desirable to permit the employees, consultants and
advisors of the Company to participate in the ownership of the Company through
the purchase of shares of the Company's common stock. Such ownership
strengthens the sense of identity between the Company, employees, consultants
and advisors and furthers the recognition of the unity of purpose essential to
the continued growth of the Company to the material benefit of its shareholders.
Likewise, at the present time the Board of Directors believes it is important to
reduce the cash flow pressures of the Company and thus believes this Plan is in
the best interests of the Company, its employees, stockholders and creditors.
2. ELIGIBILITY. All employees who agreed to salary reductions and
certain consultants and advisors of the Company who agree to accept shares of
the Company's common stock as opposed to cash remuneration for their services or
any of its subsidiaries shall be eligible to participate in the Plan.
3. PARTICIPATION. Eligible employees who wish to participate in the Plan
shall have executed a form furnished by the Company indicating they have elected
to participate in this Plan. Payroll reductions must be in whole dollar amounts
only. Upon execution or amendment of a payroll reduction authorization by an
employee, the employee shall be considered to have made a commitment to continue
the payroll reduction in the amount as indicated in the payroll reduction
authorization.
4. DETAILS OF PLAN. The Plan requires employees to forego a certain
portion of their regular compensation in exchange for shares of the Company's
common stock. Schedule "A" attached hereto sets forth a list of employees and
the number of shares each employee is entitled to receive under the Plan.
Consultants and advisors are authorized to participate in this Plan and to
receive shares of the Company's common stock pursuant to the provisions set
forth below. Any consultant or advisor who elects to receive shares of the
Company's common stock as opposed to cash compensation may only do so providing
their services are not in connection with the offer or sales of securities in a
capital raising transaction.
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The amount of each participating employee's total reductions in salary
or the amount agreed to by a consultant or advisor is the value of such
consultants or advisors services divided by the fair market value of the shares
of the Company's common stock as determined by the Board of Directors. The
Board of Directors has determined that the fair market value of shares of the
Company's common stock for purposes of this Plan is $.25 per share for employees
and $.50 per share for consultants and advisors.
The Company hereby reserves two million (2,000,000) shares of its
common stock, par value under $.01 for issuance under this Plan. The Company
will use its best efforts to register the shares subject to this Plan under the
Securities Act of 1933, as amended (the "1933 Act") pursuant to a Form S-8
Registration Statement. Issuance of shares under this Plan is subject to
compliance with applicable state and federal securities, labor, and employment
laws.
5. PURCHASE OF STOCK. On or before March 30, 1996, the Company shall
issue to each participating employee, consultant and advisor the appropriate
number of shares of the Company's common stock. For example: If a total of One
Thousand Dollars ($1,000.00) is deducted for a participating employee, the
Company shall issue to the employee the number of shares (rounded to the nearest
whole number) equal to the compensation deferred divided by $.25:
$1,000.00 = 4,000 shares
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$.25
6. CUSTODY AND ISSUANCE OF STOCK. Stock certificates when originally
issued under this Plan will be registered in the name of the participant or in
the name of another person or persons as instructed by the participant and will
be delivered to the participant or to his order. Upon issuance of the
certificate(s), the Company shall register the name of such participant in this
Plan on the books and records of the Company as a stockholder for the number of
shares represented by the certificate(s).
7. EXPENSES. The charges and all costs of maintaining records hereunder
will be borne by the Company. Brokerage expenses in the purchase and sale of
shares shall be borne by the employee or participant.
8. RESPONSIBILITY. Neither the Company nor the broker through whom
purchase orders are executed shall have any responsibility or liability or thing
done or left undone, including, without limiting the generality of the
foregoing, any action taken with respect to the price, time, quantity, or other
conditions and circumstances of the purchase of shares under the terms of the
Plan. A determination by the Company as to any question that may arise
regarding the Plan's conduct or operation shall be final.
Dated this 14th day of March , 1996.
MEDICAL TECHNOLOGY
SYSTEMS, INC.
By: /s/ GERALD COUTURE
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Its: Vice President
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