U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 30, 1997
_________________________________________________________________
3D IMAGE TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)
Delaware 33-27627 76-0265438
(State of incorporation) (Commission File Number) (IRS Employer ID)
5172-G Brook Hollow Parkway, Norcross, Georgia 30071
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (770) 416-8848
including area code:
(Former name and former address, if changed since last report)
3D IMAGE TECHNOLOGY, INC.
TABLE OF CONTENTS Page
Item 1. Termination of Olajuwon Venture Capital, Inc. 1
Subscription Agreement
Item 2. Appointment of New Interim Chairman and CEO 2
Item 3. Closing of Amsterdam Laboratory 2
Item 4. Termination of Hakeen Olajuwon Endorsement 2
Agreement
Exhibit 1 Agreement dated September 25, 1997 3
Item 1. Termination of Olajuwon Venture Capital, Inc.
Subscription Agreement
On September 25, 1997, Registrant entered into an Agreement
with Olajuwon Venture Capital, Inc. of Houston, Texas, terminating
the Subscription Agreements for 7,600,000 common shares for
$3,800,000 and 900,000 common shares for $450,000, dated May 16,
1997 and May 20, 1997, respectively. Under the terms of the
Agreement, promissory notes issued by Olajuwon Venture Capital,
Inc. in the amounts of $3,800,000 and $450,000 in payment of the
Subscription amounts and share certificates issued to Olajuwon
Venture Capital, Inc. for 7,600,000 shares and 900,000 shares also
have been canceled. Akinola Olajuwon, President of Olajuwon Venture
Capital, Inc. also resigned as Chairman, Chief Executive Officer
and a director. This action resulted from Olajuwon Venture Capital,
Inc. default under the promissory notes and Subscription
Agreements for failure to pay the promissory notes when due under
their terms.
On May 12, 1997, Registrant and Olajuwon Holdings, Inc.
entered into an Acquisition and Financing Agreement under which
Olajuwon Holdings, Inc. agreed to invest $3,800,000 in the
Registrant for 7,600,000 shares (subsequently increased to a total
of $4,250,000 for 8,500,000 shares) in return for control of
Registrant. The new capital was to be contributed in agreed
installments as needed for the working capital needs of Registrant,
with the full remaining balance due on December 31, 1997.
Simultaneously, Image Technology International, Inc., former parent
of Registrant, agreed to grant an option to Olajuwon Holdings, Inc.
to acquire 6,500,000 shares of Registrant's common stock held by
Image Technology International, Inc. and to grant a proxy to
Olajuwon Holdings, Inc. to vote the option shares during the option
period.
By assignments dated May 20, 1997, Olajuwon Holdings, Inc.
assigned its rights and obligations under these agreements to
Olajuwon Venture Capital, Inc. and the transaction closed on May
20, 1997. At the closing, Olajuwon Venture Capital, Inc. executed
two promissory notes, in the amounts of $3,800,000 and $450,000, in
satisfaction of the Subscription Agreements dated May 16 and May
20, 1997, and stock certificates for 7,600,000 and 900,000 shares
of Registrant's common stock were issued to Olajuwon Venture
Capital, Inc. These newly issued shares together with the proxy
granted by Image Technology International, Inc. to vote the
6,500,000 option shares, resulted in Olajuwon Venture Capital, Inc.
acquiring voting control of Registrant. Akinola Olajuwon, President
of Olajuwon Venture Capital, Inc. was elected a director, Chairman
and Chief Executive Officer.
During the period from May 20, 1997 through September 25,
1997, the Registrant's Board of Directors determined that the
working capital needs of Registrant were approximately $1,800,000,
but Olajuwon Venture Capital, Inc. was unable to contribute any
amounts in excess of $197,000 to meet its obligations under the two
promissory notes. As a result of Olajuwon Venture Capital, Inc.
failure to meet its obligations under the promissory notes,
Registrant was forced to cancel pending purchase orders for cameras
for delivery in the Fourth Quarter for lack of working capital to
build the cameras to satisfy this order. This canceled order
represents approximately $1,500,000 in lost sales revenues. The
funds required to build the cameras for these purchase orders were
included in the working capital needs of $1,800,000 determined by
Registrant's Board of Directors.
Registrant's Board of Directors, determined that Olajuwon
Venture Capital, Inc. was in default under the two promissory notes
and voted to terminate the Subscription Agreements and cancel the
shares issued to Olajuwon Venture Capital, Inc. As a result of this
action, the option and proxy to vote the 6,500,000 option shares
terminated automatically by their terms. Akinola Olajuwon also
agreed to resign as a director, Chairman and Chief Executive
officer of Registrant.
The Agreement dated September 25, 1997 confirms the
cancellation of the promissory notes, Subscription Agreements and
share certificates and provides that Olajuwon Venture Capital, Inc.
will be entitled to receive 394,000 shares of Registrant's common
stock in return for the $197,000 actually contributed by it.
Item 2. New Interim Chairman and Chief Executive Officer.
As a result of the resignation of Akinola Olajuwon as Chairman and
Chief Executive Officer of Registrant, the Registrant's Board of
Directors appointed Breckenridge McKinley as Interim Chairman.
The Board also appointed Bruce Herstowski as Chief Executive
Officer. Mr. Herstowski already served as President, and will
continue in that position.
Item 3. Closing of Amsterdam Laboratory.
Effective September 20, 1997, the Board of Directors completed the
closing of the Company's Amsterdam photofinishing laboratory due to
continuing operating losses. The Board determined that the high cost of
doing business in The Netherlands compared to the cost of photofinishing
in the Atlanta photofinishing facility made it more efficient and cost
effective to handle all photofinishing at one location. The estimated
savings from closing the Amsterdam laboratory are $20,000 per month. The
printer processors and other laboratory equipment in Amsterdam have been
shipped to the Atlanta laboratory where it will be placed in service to
increase capacity.
Item 4. Termination of Hakeem Olajuwon Endorsement Agreement:
On September 25, 1997, the Registrant gave notice of termination of
our endorsement agreement entered into in June 1997 with Hakeem Inc. for
product endorsement and personal appearance services of Hakeem Olajuwon.
No services had been performed under this agreement and no compensation
had been paid by Registrant. The agreement provided for compensation
based on warrants to purchase shares of Registrant for $1.00 and $1.50
per share for the two year term of the agreement, and the agreement
would became effective on issuing of the warrants. No warrants were
ever issued.
Exhibits
Exhibit 1. Agreement dated September 25, 1997, with
attachments.
October 3, 1997
/s/Bruce Herstowski
President
This Agreement is made and entered into this 25 day of September,
1997 between 3D Image Technology, Inc., a Delaware corporation with its
principal office located in Atlanta, Georgia (TDIT) and Olajuwon
Venture Capital, Inc., a Texas corporation with its principal office
located in Houston, Texas (OVC).
WHEREAS, TDIT and Olajuwon Holdings, Inc. (OHI) entered into an
Acquisition and Financing Agreement dated May 12, 1997 (Exhibit A),
an Option Agreement dated May 16, 1997 (Exhibit B), and a
Subscription Agreement dated May 16, 1997 (Exhibit C); and
WHEREAS, by Assignments dated May 20, 1997 (Exhibit D), OHI
assigned it rights and obligations under the Acquisition and Financing
Agreement, the Option Agreement and the Subscription Agreement to OVC;
and
WHEREAS, on May 20, 1997, OVC executed a second Subscription
Agreement (Exhibit E) and two separate promissory notes in favor of
TDIT, one in the principal amount of $3,800,000 (Exhibit F) and one
in the principal amount of $450,000 (Exhibit G); and
WHEREAS, TDIT issued to OVC a share certificate for 7,600,000
shares of its common stock under the May 16, 1997 Subscription Agreement
(Exhibit C) on receipt of the Promissory Note in the principal amount
of $3,800,000 (Exhibit F), and a share certificate for 900,000 shares
of its common stock under the May 20, 1997 Subscription Agreement
(Exhibit E) on receipt of the Promissory Note in the principal amount
of $450,000 (Exhibit G) and OVC, pledged the 7,600,000 share
certificate and the 900,000 share certificate as security for the
promissory notes; and,
WHEREAS, OVC has not fully funded the promissory notes (Exhibit
F and G) in accordance with their terms;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby
agree as follows:
1. Release from Promissory Notes. OVC acknowledges and agrees
that it has not funded the Promissory Notes dated May 20 and May 21,
1997 and desires to be released from further obligation to TDIT under
the promissory notes (Exhibits F and G). TDIT hereby releases
and discharges OVC from any further liability to TDIT under the
promissory notes, to the extent not paid.
2. Conveyance of Shares. Simultaneously with the execution of
this Agreement by all parties, OVC hereby agrees to endorse and deliver
to TDIT for cancellation, the share certificates for 7,600,000 and
900,000 shares of common stock of TDIT issued to OVC in consideration
for the promissory notes.
3. Issue of New Shares. Immediately upon the cancellation of the
share certificates for 7,600,000 and 900,000 shares of common stock of
TDIT, TDIT shall cause to be issued a new share certificate for 394,000
shares of common stock in recognition of the partial payment of $197,000
by OVC on the Promissory Note dated May 21, 1997 (Exhibit G).
4. Confirmation of Release of OHI. TDIT hereby confirms that
upon its approval of the assignment by OHI to OVC of the
Subscription Agreement attached hereto as Exhibit C it released
and discharged OHI from any and all liability under said
Subscription Agreement.
5. Release of OVC. TDIT hereby confirms that it will release
and discharge OVC from any and all liability under the Subscription
Agreements attached hereto as Exhibits C and E on the earlier of
the following occurrences: (1) Approval of the release by a
majority of the shareholders of TDIT at a shareholder meeting held
on or before December 31, 1997 or (2) acceptance of an alternate
investment in the amount of not less than $3,800,000 from another
source.
IN WITNESS WHEREOF, the parties hereto have put their
respective hands and seals this 25 day of September, 1997.
3D Image Technology, Inc. Olajuwon Venture Capital, Inc.
By: /s/ Bruce Herstowski By: /s/ Aikinola Olajuwon
President President
