<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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) November 18, 1996
-----------------
PHOTRAN CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 000-20731 41-1697628
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
21875 Grenada Avenue, Lakeville, MN 55044
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612)469-4880
-------------
(Former name or former address, if changed since last report.) Not Applicable
<PAGE>
ITEM 5. OTHER EVENTS
See the following press release, dated November 20, 1996 announcing the
termination of the China equipment sale and joint venture agreement.
Contact: Paul T. Fink
Chief Financial Officer
Telephone: (612) 469-4880
Fax: (612) 469-4886
FOR IMMEDIATE RELEASE
PHOTRAN CORPORATION ANNOUNCES TERMINATION OF CHINA EQUIPMENT SALE CONTRACT AND
JOINT VENTURE AGREEMENT
Photran Corporation today received formal notice from its China Joint Venture
partner, the Shenzhen WABO Group Co. Ltd. (WABO), of WABO's intent to terminate
the contract under which Photran was to supply equipment to the China Joint
Venture operation.
WABO has further notified Photran that it is making a claim, under the relevant
clauses of the contract, to receive a full refund in the amount of approximately
$1.7 million (plus an unspecified amount of interest) which they have paid to
Photran on behalf of the China Joint Venture Company.
Mr. David E. Stevenson, CEO, stated that "we are very disappointed at the action
by WABO to cancel the equipment purchase agreement and by inference the Joint
Venture project. WABO's decision, just days prior to shipment, is totally
contrary to the agreement we reached in negotiations we concluded on November 8,
1996." Stevenson further stated that "we do not know why WABO has canceled the
contract; however, we believe it resulted from their inability to meet the
payment terms specified in the unratified agreement we reached on November 8,
1996." Stevenson noted further that "we are reviewing Photran's rights under
the agreement to determine what recourse the company may have against WABO. We
do not intend to make any refund to WABO until we have concluded a comprehensive
settlement of open issues."
Stevenson stated that "it is not possible at this time to determine the full
impact of this event on the company's financial condition; although, we do not
anticipate any material adverse effect. The company has not recognized any
revenue in connection with the sale of the coating equipment in prior periods
and will not be recognizing previously anticipated revenue in future periods."
Stevenson also said that, "the cancellation of the China Joint Venture project
is certainly a disappointment. However, it came at a time when we have a strong
need for additional capacity. This equipment will be used in place of a
previously planned production line in our Lakeville, Minnesota plant to
manufacture several proprietary products. These include ZeroRay-TM- filters,
ArtGlas-TM-, UVAR-TM- eyeglass lenses, PolarClear-TM- polarizing film and PMAX-
Registered Trademark- front surface mirrors. Therefore, I believe that the
Company will be able to derive full use of all the equipment we would have sold
to the China Joint Venture project."
FORWARD - LOOKING STATEMENTS
This press release contains forward-looking statements as defined in Section 21E
of the Securities Exchange Act of 1934, as amended. These forward-looking
statements involve a number of risks and uncertainties, including the final
disposition of the issues related to the cancellation of the equipment purchase
agreement and the China joint venture, the timely completion of construction and
installation of the manufacturing equipment previously planned for shipment to
the joint venture company, the timely development and acceptance of new products
and other factors disclosed throughout the Company's Form 10-QSB for the
quarters ended September 30 and June 30, 1996 and the Company's registration
statement on Form SB-2 which became effective
2
<PAGE>
May 29, 1996. The actual results that the Company achieves may differ
materially from any forward-looking statements due to such risks and
uncertainties. The Company undertakes no obligation to revise any forward-
looking statements in order to reflect events or circumstances that may arise
after the date of this press release. Readers are urged to carefully review and
consider the various disclosures made by the Company in this report and in the
Company's other reports filed with the Securities and Exchange Commission that
attempt to advise interested parties of the risks and factors that may affect
the Company's business and results of operations.
PHOTRAN CORPORATION develops, manufactures and markets high performance optical
and electrically conductive thin film coated products using a proprietary
process technology known as Fuzion -TM- planar magnetron sputtering. The
Company produces products for the flat panel display industry as well as optical
and radiation filters for computer monitors and televisions.
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 hereunto duly authorized.
Photran Corporation
By:
___________________________________
David E. Stevenson
Chairman and Chief Executive Officer
3
