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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)
June 2, 2000
CHROMATICS COLOR SCIENCES INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
New York
(State or Other Jurisdiction of Incorporation)
0-21168 13-3253392
(Commission File Number) (IRS Employer Identification Number)
5 East 80th Street, New York, New York 10021
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 717-6544
Page 1 of 6 pages
Exhibit Index located on page 6
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Agreement of Purchase and Sale.
On June 2, 2000, pursuant to the Agreement of Purchase and
Sale, dated April 17, 2000, among the Company and the shareholders of Gordon
Acquisition Corp., a California corporation ("Gordon"), the Company completed
its acquisition of Gordon, a manufacturer of cosmetics, hair care and other
personal care products. The Company acquired from the shareholders of Gordon (i)
approximately 85% of the outstanding shares of common stock, par value $.001, of
Gordon, (ii) options to purchase the remaining shares of common stock within one
year and (iii) certain notes made by Gordon in favor of certain of its
shareholders. In consideration thereof, the Company issued to the shareholders
of Gordon a total of 721,231 shares of common stock, par value $.001, of the
Company and paid them $609,000 in cash.
To determine the number of shares of the Company to be issued,
the parties negotiated a certain dollar amount, adjusted by the amount by which
the estimated adjusted net working capital of Gordon on the closing date
exceeded or fell short of the target adjusted net working capital. This dollar
amount was then divided by the agreed price per share, $6.29. Additional shares
of the Company were issued to a particular shareholder in exchange for the notes
that Gordon had made in its favor. The number of additional shares was
determined by dividing the outstanding principal amount of these notes by the
agreed price per share. All other holders of notes that the Company purchased
received cash in exchange therefor, totaling $609,000, the approximate total
outstanding principal amounts of such notes. The Company transferred the cash
amount from its own working capital.
The options to purchase the remaining shares of Gordon (the
"Option Shares") are subject to mandatory exercise by the Company on the first
anniversary of the closing date if not sooner exercised. Upon exercise, the
Company will issue to each holder of Option Shares a number of shares of the
Company equal to the quotient of (A) the sum of (i) $6.29 multiplied by the
number of Option Shares being purchased from such holder and (ii) simple
interest on such amount at the rate of 9% per annum calculated from the closing
date to the date of exercise divided by (B) the greater of (i) the average
closing price of shares of the Company over the twenty trading days ending on
the trading day immediately prior to the date of exercise and (ii) $6.29.
In addition, the Company agreed to register the shares of its
common stock issued to the shareholders of Gordon pursuant to the Agreement of
Purchase and Sale for resale under the Securities Act of 1933, as amended, and
to use its reasonable best efforts to have the resale registration statement
filed with the Securities and Exchange Commission on or prior to the fifth
business day after the Company has received all financial information from
Gordon and its subsidiary, H.B. Gordon Manufacturing Co., necessary to prepare
such registration statement.
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Gordon is recognized within the personal and beauty care
industry as a high-quality formulator, packager and contract manufacturer of a
variety of cosmetics and other beauty care products for branded consumer product
marketers and private label retailers. Gordon's customer base consists of
leading brand marketers, major mass merchandisers and direct-sale marketers,
including such leading names as Sears, The Gap, Kmart, Tova, Herbalife, The Body
Shop, Bath & Body Works and Victoria's Secret. The Company intends to use
Gordon's manufacturing and marketing capabilities to commercialize its color
science technology in the cosmetics and hair colorant markets and to generate
expanded revenues from laboratory product chromaticity studies, color-measuring
systems and related products.
Prior to the Agreement of Purchase and Sale, the two companies
had entered into a licensing agreement to commercialize the marketing of the
Company's new, hand-held Colormate(R) device and system for selecting
personalized colors of cosmetics, hair color and beauty-related products,
including custom-blended cosmetic foundations.
In connection with the Agreement of Purchase and Sale, Brian
T. Fitzpatrick, the former Chairman, President and CEO of Gordon, has been named
President and Chief Operating Officer of the Company and will relocate to the
Company's New York headquarters. Mr. Fitzpatrick has been the Chairman,
President and CEO of Gordon since April 1996 and has served as president of
several electronic manufacturing companies after working for the Polaroid
Corporation in its industrial marketing division.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial Statements of Businesses Acquired
The financial statements required to be filed pursuant to Item
7(a) of Form 8-K were not available at the time of filing of this Current Report
on Form 8-K and will be filed on a Form 8- K/A as soon as practicable but in no
event later than 60 days after the date this Current Report on Form 8-K is
required to be filed.
(b) Pro Forma Financial Information
The pro forma financial information required to be filed
pursuant to Item 7(b) of Form 8-K was not available at the time of filing of
this Current Report on Form 8-K and will be filed on a Form 8-K/A as soon as
practicable but in no event later than 60 days after the date this Current
Report on Form 8-K is required to be filed.
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(c) Exhibits
2.1 Agreement of Purchase and Sale (the "Purchase Agreement"), dated as of
April 17, 2000, among Chromatics Color Sciences International, Inc. and
the shareholders and certain noteholders of Gordon Acquisition Corp.
(including Exhibits A through E thereto).
2.2 Amendment No. 1 to the Purchase Agreement, dated May 15, 2000.
2.3 Amendment No. 2 to the Purchase Agreement, dated May 25, 2000.
2.4 Amendment No. 3 to the Purchase Agreement, dated May 31, 2000.
99 Chromatics Color Sciences International, Inc. Press Release, dated June
6, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CHROMATICS COLOR SCIENCES
INTERNATIONAL, INC.
By: /s/ Darby S. Macfarlane
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Name: Darby S. Macfarlane
Title: Chief Executive Officer
Date: June 19, 2000
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EXHIBIT INDEX
2.1 Agreement of Purchase and Sale (the "Purchase Agreement"), dated as of
April 17, 2000, among Chromatics Color Sciences International, Inc. and
the shareholders and certain noteholders of Gordon Acquisition Corp.
(including Exhibits A through E thereto).
2.2 Amendment No. 1 to the Purchase Agreement, dated May 15, 2000.
2.3 Amendment No. 2 to the Purchase Agreement, dated May 25, 2000.
2.4 Amendment No. 3 to the Purchase Agreement, dated May 31, 2000.
99 Chromatics Color Sciences International, Inc. Press Release, dated June
6, 2000.
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