SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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) March 20, 1997
INFORMATION MANAGEMENT TECHNOLOGIES CORPORATION
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(Exact name of Registrant as specified in its Charter)
DELAWARE
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(State of other jurisdiction of incorporation)
0-16753 58-1722085
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Commission File No. I.R.S. Employer Identification
130 Cedar Street, New York, NY 10006
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Address of principal Zip Code
executive offices
(212) 306-6100
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Registrant's telephone number,
including area code
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5. OTHER EVENTS
The Registrant (the "Company"), on March 20, 1997, completed a minimum of
a Private Placement Offering pursuant to Regulation "D", wherein the Company
sold a minimum of $900,000 of 12% Secured Convertible Promissory Notes to three
subscribers. The balance of the Offering comprises an additional $200,000 of 12%
Secured Convertible Promissory Notes, and the Offering will remain open until
April 30, 1997.
The 12% Secured Convertible promissory Notes are convertible into shares
of Common Stock of the Company at the five day closing market average for a
period of two years from the date of the issuance of the Notes. The Notes are
automatically converted at the end of the term if holders have not exercised
their right to convert prior to the expiration date of the Notes.
The 12% interest is payable by the Company quarterly in cash or in shares
of Common Stock, at the option of the Company, based upon the five day closing
market average price of the Company's common Stock.
The Company agreed to provide cost-free registration rights and piggyback
registration rights to subscribers who purchased the Notes with respect to the
underlying shares of Common Stock that would be converted pursuant to the
Promissory Notes.
The security pledged by the Company as collateral for the Promissory Notes
are 500,000 shares of the Restricted Common Stock owned by the Company in INSCI
Corp., a former majority-owned subsidiary corporation. The Company has the right
to pre-pay
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the Notes and interest at any time during the term of said Notes. Additionally,
Noteholders have also been granted one warrant for each $1.00 of Promissory Note
or a minimum of 900,000 shares of Common Stock Purchase Warrants exercisable at
$1.00 per share for a period of five years from the closing date. Noteholders
receive cost-free registration rights with respect to the underlying shares for
the Common Stock Purchase Warrants.
The Company agreed to pay to Amerivet Dymally, Inc., a licensed
broker/dealer, $90,000 in commissions as a result of Amerivet Dymally, Inc.
selling $900,000 of Secured Promissory Notes in the Offering.
EXHIBITS
1. Copy of the Private Placement Term Sheet
2. Copy of the 12% Secured promissory Notes
3. Copy of the Common Stock Purchase Warrants
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
undresigned hereunto duly authorized.
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Dated: New York, New York
April , 1997
INFORMATION MANAGEMENT
TECHNOLOGIES CORPORATION
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(Registrant)
/s/ JOSEPH GITTO
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JOSEPH GITTO
President and CFO
THE OFFERING
The Company: IMTECH, through its Information and Facilities
Management services ("IFM") division, provides IFM
services primarily to financial and other service
industries which are characterized by substantial
information processing, communications and
document administration requirements. IFM services
provided by the IFM Services division include
traditional duplication, offset printing, laser
processing, electronic publishing, media
conversion, text formatting, graphic digitization,
and other document and information management
services, including litigation support services,
mail-room facsimile, and records management. Under
its IFM contracts, this division generally
provides IFM services on site at the customer's
facility, although under several of its IFM
contracts many or all of IMTECH's IFM services are
performed at IMTECH's regional service centers.
This division also provides many facility
management services for many clients with whom
IMTECH has no formal facilities management
arrangement.
Securities Being Offered The offering consists of a minimum of $1,000,000
("Minimum Offering") of Convertible Secured
Promissory Notes (the "Notes") and a maximum of
$1,100,000 ("Maximum Offering") of Notes and
related Warrants (the "Warrants"). Upon receipt
and acceptance of subscription proceeds pursuant
to this offering, the Company will execute and
deliver to each investor a Note in the form
attached hereto as Exhibit A. The Notes shall be
secured by 500,000 restricted shares of INSCI
Corp. Common Stock owned by the Company (the
"Pledged Stock" or "Collateral"). In the event
IMTECH's Class "A" Common Stock becomes delisted
for a period of sixty (60) consecutive trading
days, or the Company fails to meet its interest
obligation to subscribers, or if the Company
becomes insolvent, the subscribers will have the
right to liquidate a pro-rated portion of the
Collateral to repay all principal and accrued
interest on all Notes outstanding. The Pledged
Stock will be held in accordance with the
applicable sections of the New York Uniform
Commercial Code, pursuant to a Pledge Agreement in
the form attached hereto as Exhibit B. The Company
will have the right to receive the return and use
of up to 100,000 shares of the Pledged Stock in
the event the Company requires the use of the
aforementioned portion of the Pledged Stock to
obtain a bank credit line or to enter into a
lease/purchase agreement. The Notes will earn
annual interest of 12% per annum, which at the
option of the Company may be paid in cash or the
cash equivalent in the form of the Company's
restricted Class "A" Common Stock. The Company
reserves the right to repay any portion of the
unconverted Notes and to redeem any unexercised
Warrants at any time. For each $1.00 in value of
Notes subscribed to, subscribers will receive one
(1) Warrant. Additionally, Notes and Warrants are
convertible into shares of the Company's Class "A"
Common Stock valued at a 40% discount to the 5 day
average closing price prior to conversion. A
subscriber may only convert up to 10% of Note and
Warrant holdings in any given month during the
term of the Note (See "Lock-Up Period").
Conversion rights are cumulative. No conversions
of Notes or Warrants can be made by subscribers
prior to an effective registration by the Company
of all shares of Class "A" Common Stock into which
Notes and Warrants are convertible (the
"Registrable Securities"). The Company has agreed
to use its best efforts to prepare and file a
registration statement within 180 days from the
completion of the placement. The Company will
provide subscribers cost free registration for all
Registrable Securities. Warrants convertible into
Registrable Securities shall be in the form
attached hereto as Exhibit C, and shall be for a
period of three (3) years from the effective date
of the registration statement for the Registrable
Securities. Warrants are redeemable at any
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time by the Company at $0.40 per Warrant. Upon an
effective registration for the Registrable
Securities, subscribers may convert Warrants at a
40% discount to the 5 day average closing price of
the Company's Class "A" Common Stock prior to
conversion, subject to the restrictions stated
herein. The Company reserves the right at any time
to repay the entire unconverted portion of the
Notes without any penalty. At the end of three (3)
years from the effective registration of the
Registrable Securities, there shall be a mandatory
conversion of Notes at the foregoing conversion
price by the Company. Any unredeemed and
unexercised Warrants at the end of such three (3)
year period shall expire unless extended by the
Company.
Terms of the Offering: The offering is being made pursuant to the
exemption from registration provided by Regulation
D promulgated under the Securities Act of 1933, as
amended ("Regulation D"). All purchasers of the
Notes must be "accredited investors" as defined in
Rule 501 of Regulation D. The minimum subscription
is $25,000 (subject to the Company's right to
accept smaller subscriptions). The offering period
will begin as of the date hereof and will
terminate on March 31, 1997 (the "Termination
Date"). After the minimum of $1,000,000 of Notes
are sold (the "Initial Closing"), an interim
closing or closings may be held and the offering
will continue until the earlier of the Termination
Date or the sale of all the Notes offered hereby
"Final Completion of Closing", with one or more
closings after the Initial Closing. The date of
the Initial Closing is referred to as the "Initial
Closing Date" and the dates of subsequent closings
are referred to as the "Subsequent Closing Dates."
All subscription payments with respect to the
Minimum Offering will be held by the Company's
counsel, pending acceptance of subscriptions and
receipt of collected funds for at least $1,000,000
of the Notes.
Collateral: The Notes offered in this placement will be
secured by 500,000 shares of restricted INSCI
Corp. Common Stock (the "Pledged Stock"). The
Pledged Stock will be held pursuant to the terms
of a Pledge Agreement annexed hereto as Exhibit B.
The Pledged Stock held pursuant to the Pledge
Agreement will be subject to the Company having
the right to receive the return of up to 100,000
shares of the Pledged Stock in the event the
Company requires the aforementioned portion of the
Pledged Stock to obtain a bank credit line, or to
enter into a lease/purchase agreement. In the
event that the Company's Class "A" Common Stock
becomes delisted from the National Association of
Security Dealers Automated Quotation (Small Cap)
System ("NASDAQ (sm)") for a period of sixty
("60") consecutive trading days, prior to the
conversion of the Notes offered hereby, or if the
Company fails to meet its interest obligation to
Note holders or if the Company becomes insolvent,
then in that event, subscribers will have the
right to declare the notes in default and if
payment is not made by the Company, the Pledged
Stock will be liquidated in accordance with the
terms of the Pledge Agreement.
Terms of the Class
"A" Common Stock: As of February 21, 1997, there were 5, 579,302
shares of Class "A" Common Stock outstanding and
approximately 2,500 record holders of the Class
"A" Common Stock. The holders of Class "A" Common
Stock have no preemptive rights, redemption,
sinking fund or conversion privileges. Each share
is entitled to equal rights in the assets of the
Company upon liquidation subject to the prior
rights of creditors. The holders of Class "A"
Common Stock are entitled to dividends when and if
declared by the Company's Board of Directors. All
of the outstanding shares of Class "A" Common
Stock are, and the shares of Class "A" Common
Stock to be issued upon exercise of the Notes and
Warrants will, upon issuance, be fully paid and
non-assessable and not subject to liability for
future calls or assessment or-for liabilities of
the Company or its stockholders. There are no
cumulative voting rights with respect to Class "A"
Common Stock.
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Lock-Up Period: A subscriber may only convert up to 10% of Note
and Warrant holdings in any given month on a
cumulative basis, so that 100% of the Notes and
Warrants may be converted in the tenth month. No
conversions of Notes and Warrants can be made by a
subscriber prior to an effective registration for
all Registrable Securities (See Registration
Rights). After an effective registration,
conversion privileges will commence. Conversion
rights will be cumulative.
Registration Rights: The Company will provide subscribers cost free
registration rights for all Registrable
Securities. The Company has agreed to use its best
efforts to prepare and file a registration
statement with the Securities and Exchange
Commission within 180 days from the completion of
the Placement.
Subscription Agreement: Subscription for the Notes and Warrants must be
made pursuant to a Subscription Agreement (the
"Subscription Agreement") containing, among other
provisions, representations and warranties by the
investor and the Company, restrictions on
transferability and conversion of these
securities, the registration rights referred to
above, and indemnification relating to breaches of
representations and warranties.
Outstanding IMTECH
Common Stock and Warrants: Total Shares of Outstanding Common
Stock Prior to the Offering.......5,579,302
Total Shares of Outstanding Common
Stock After the Offering..........9,245,968(1)
Total Warrants Outstanding Prior to
the Offering......................3,287,553
Total Warrants Outstanding After
the Offering......................6,954,219(2)
Selling Commissions: IMTECH will offer the Notes on a "minimum,
maximum" basis. The Notes will be offered through
the efforts of the Company's executive officers in
those jurisdictions where sales by an officer or a
director of the issuer are permitted by law.
IMTECH also reserves the right to pay selling
commissions to qualified licensed broker-dealers
who are members in good standing of the National
Association of Securities Dealers, Inc. ("NASD")
and who are qualified and eligible to accept such
commissions within the state or other jurisdiction
in which securities are sold and/or such
commission is paid. Commissions of not more than
10% will be paid upon closing, an additional 2%
upon conversion of Notes to Class "A" Common Stock
and further 10% commission upon the exercise of
Warrants.
In the event the Company elects to redeem all or
any portion of outstanding Warrants the 10%
commission payable to a licensed broker dealer
upon exercise of Warrants by subscribers will
expire pro ratably. The Company in turn will pay
up to $100,000, or a pro rata portion thereof,
depending upon the percentage of warrants redeemed
by the Company to a licensed broker dealer.
Use of Proceeds: Upon completion of this offering the Company will
use the net proceeds after deducting expenses
payable by the Company including legal fees, Blue
Sky fees, for general working capital purposes and
the purchase of equipment.
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(1) Assumes a maximum offering of $1,100,000 Notes and 1,100,000 Warrants
issued and full conversion of all Notes and Warrants at a 40% discount to
an assumed $1.00 average closing price for the Company's Class "A" Common
Stock.
(2) Assumes a maximum offering of $1,100,000 Notes and conversion of
1,100,000 Warrants.
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Exhibit A
NON-NEGOTIABLE 12% CONVERTIBLE SECURED PROMISSORY NOTE
New York, New York
February , 1997
FOR VALUE RECEIVED, the undersigned, INFORMATION MANAGEMENT TECHNOLOGIES
CORP. ("MAKER") hereby promises to pay to the order of ______________________
("HOLDER"), the principal sum of _____________________ with interest thereon at
12% (twelve percent) per annum, payable annually in cash or in the cash
equivalent of shares of restricted Class "A" Common Stock of MAKER. in This Note
is part of a private placement of Notes of like tenor in an aggregate principal
amount of not less than $1,000,000 and not more than $1,100,000 (the "Notes"),
500,000 shares of restricted Common Stock in INSCI, Corp. have been pledged by
MAKER pursuant to a Pledge Agreement to secure payment of the principal of and
interest on the Notes.
1. Payment of principal is to be made at such address as to which HOLDER
shall notify MAKER in writing, prior to maturity, in lawful money of the United
States.
2. If, under any bankruptcy or insolvency law or other law for the
reorganization arrangement, composition or similar relief or aid of debtors or
creditors: (a) MAKER is adjudicated a bankrupt, or takes or seeks to take or to
have taken, or consents to the taking of, any action with respect to MAKER or a
substantial part of MAKER's property or affairs, or (b) a Court or other
governmental authority of competent jurisdiction (i) approves a petition seeking
any such relief or aid with respect to MAKER, (ii) appoints a trustee, receiver,
or liquidator of MAKER or of substantially all of MAKER's property or affairs,
or (iii) assumes custody or control of substantially all of the property or
affairs of MAKER; and, in any such case, such approval or appointment is not
vacated, or the custody or control is not terminated, within sixty (60) days or
stayed on appeal, then, at the option of the HOLDER, the HOLDER may declare the
unpaid balance of the principal and accrued interest, if any, if not then due
and payable to be due and payable.
3. In the event the Class "A" Common Stock of Maker becomes delisted for a
period of sixty (60) consecutive trading days from the National Association of
Security Dealers Automated Quotation (Small Cap) System (NASDAQ) then, at the
option of HOLDER, HOLDER may declare the unpaid balance of the principal and
accrued interest, if any, if not then due and payable to be due and payable.
4. The Notes and the rights of HOLDER and obligations of the MAKER
hereunder are subject to the provisions of the Private Placement Term Sheet and
Subscription Agreement by and between HOLDER and MAKER dated February 27, 1997
and the Pledge Agreement annexed thereto as Exhibit B.
5. MAKER shall have the right of prepayment without penalty as long as all
interest is paid up to the date of said prepayment.
6. In the event of any default, which shall remain uncured for a period of
ten (10) days, HOLDER thereof shall have the right upon ten (10) days written
notice to accelerate payment of all principal and interest and be entitled to
receive reasonable attorneys' fees in the event an attorney is required to
collect the amount due.
7. The Notes have been approved and authorized by a unanimous resolution of
the Board of Directors of Maker.
8. Notice shall be deemed to be given to MAKER when actually received by
MAKER or, if earlier, on the 5th business day after such notice is sent by
registered or certified mail, postage prepaid and addressed to MAKER at:
Information Management Technologies Corporation, 130 Cedar Street, New York, NY
10006.
INFORMATION MANAGEMENT TECHNOLOGIES
CORPORATION
By:
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WARRANT
EXHIBIT C
NON-TRANSFERRABLE
COMMON STOCK PURCHASE WARRANT CERTIFICATE
FOR PURCHASE OF SHARES OF CLASS "A" COMMON STOCK OF
INFORMATION MANAGEMENT TECHNOLOGIES CORPORATION
THIS WARRANT AND ANY SHARES OF CLASS "A" COMMON STOCK ISSUABLE UPON ITS EXERCISE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(THE "ACT") SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (2) RECEIPT BY
THE ISSUER OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.
VOID AFTER THE EXPIRATION DATE REFERRED TO HEREIN
FOR VALUE RECEIVED, this certifies that ____________________ or registered
assignee (the "Registered Holder"), is the owner of the number of Class "A"
Common Stock Purchase Warrants ("Warrants") specified above. Each Warrant
initially entitles the Registered Holder to purchase, subject to the terms and
conditions set forth in this Certificate and the Subscription Agreement (as
hereinafter defined), one (1) fully paid and non-assessable share of Common
Stock, $.04 par value ("Common Stock"), of Information Management Technologies
Corporation, a Delaware corporation (the "Company"), at any time after a
registration of the shares of Common Stock into which this Warrant is
exercisable (the "Warrant Shares") is declared effective and prior to the
Expiration Date (as hereinafter defined), upon the presentation and surrender of
this Warrant Certificate with the Subscription Form duly executed, at the
corporate office of the Company at 130 Cedar Street, New York, New York,
accompanied by payment as follows: The exercise price per share will be equal to
forty percent (40%) of the five (5) day average closing price prior to exercise,
and will be payable in lawful money of the United States of America, in cash or
by official bank or certified check, made payable to Information Management
Technologies Corporation.
This Warrant Certificate, and each Warrant represented hereby, are issued
pursuant to and are subject, in all respects, to the terms and conditions set
forth in the Private Placement Term Sheet and Exhibits dated February 27, 1997
(the "Offering Document"). The Warrant Holder acknowledges that, in the event
any term or condition of the within Warrant is not consistent with Offering
Documents, then in that event, the Offering Documents will be governing.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder or assignee subject to the following terms and conditions. No
fractional shares of Common Stock will be issued upon exercise. No Warrant can
be exercised by a Registered Holder prior to an effective registration of the
Warrant Shares. Upon an effective registration of the Warrant Shares, a
Registered Holder may exercise his Warrants into 10% of the Warrant Shares
subject thereto in any given month on a cumulative basis so that 100% of the
Warrants may be exercised in the tenth month. In the case of the exercise of
less than all the Warrants represented hereby, the Company shall cancel this
Warrant Certificate upon the surrender hereof, and shall execute and deliver a
new Warrant Certificate or Warrant Certificates of like tenor, which the Warrant
Agent shall countersign, for the balance of such Warrants.
Each Warrant represented hereby is redeemable by the Company at any time
at $0.40 per Warrant without penalty to the Company.
The term "Expiration Date" shall mean 5:00 P.M. (Eastern Standard Time)
three (3) years from the effective date for a registration for the Warrant
Shares. If such date shall, in the State of New York, be a holiday or a day on
which the banks are authorized to close, then
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the Expiration Date shall mean 5:00 P.M. (Eastern Standard Time) the next
following day which, in the State of New York, is not a holiday or a day on
which banks are authorized to close. The Company may, at its election, extend
the Expiration Date.
This Warrant Certificate is exchangeable upon the surrender hereof by the
Registered Holder at the corporate office of the Company for a new Warrant
Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificate to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment with any tax or other governmental
charge imposed in connection therewith, for registration of transfer of this
Warrant Certificate at such office, a new Warrant Certificate or Warrant
Certificates, representing an equal aggregate number of Warrants, will be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Offering Documents.
The Holder of said Warrant understands and agrees that, in order to
exercise said Warrant, payments in U.S. dollars, as stated herein, for the
exercise price of each Warrant Share must be made at the Company's offices, and
that the Warrant herein expires three (3) years from the effective date for a
registration for the Warrant Shares.
Prior to due presentment for registration of transfer hereof, the Company
may deem and treat the Registered Holder as the absolute owner hereof, and of
each Warrant represented hereby (notwithstanding any notations of ownership or
writing hereon made by anyone other than a duly authorized officer of the
Company) for all purposes, and shall not be affected by any notice to the
contrary.
The within Warrant has been authorized by the Board of Directors of the
Company.
The Company will grant a one-time cost-free piggyback registration right
to the Holder and will use its best efforts to prepare and file a registration
statement for the underlying shares of Class "A" Common Stock within six months
(180 days) from the issuance of the Warrant.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: New York, New York
February , 1997
INFORMATION MANAGEMENT
TECHNOLOGIES CORPORATION
Attest:
By:
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Joseph Gitto, President
AGREED TO:
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