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6913
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) November 12, 1996
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Diplomat Corporation
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-22432 13-3727399
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
25 Kay Fries Drive, Stony Point, New York 10980
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (914) 786-5552
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
In response to weak sales of certain product lines sold by it to retail
stores, the Company has determined to eliminate the distribution of these
product lines and focus its operations on its traditional core business. In
connection with this restructuring of its operations, the value of inventory of
the affected product lines has been written down and the Company has eliminated
15 out of 49 positions at its Stony Point, New York distribution facility. The
results of operations for the nine months ended September 30, 1996 will show a
loss of approximately $6,200,000, including restructuring costs of approximately
$2,600,000.
The holder of $2,900,285 of indebtedness, including interest, from the
Company has converted such indebtedness into preferred stock of the Company.
The preferred stock has a liquidation preference of $2,900,285 ("Liquidation
Value") and an annual dividend of 9% of Liquidation Value, payable monthly.
Should the Company not pay the dividend for three consecutive months, the
holder will be entitled to receive 100,000 shares of the Company's Common Stock
for each month that the dividend has not been paid as a penalty. The preferred
stock, based on Liquidation Value, is convertible into Common Stock of the
Company at 75% of the average market value of the Common Stock for the ten
trading days immediately preceding the day of conversion. The preferred stock
also has voting rights equal to 2,900,285 shares of Common Stock on all matters
on which Common Stock votes, including election of directors. As part of the
consideration for the conversion, and for extending additional loans to the
Company totalling $600,000, the holder was issued 500,000 shares of the
Company's Common Stock. The conversion will be reflected in the financial
statements of the Company for the period ending September 30, 1996.
The employment agreement between the Company and Sheldon Rose was not
renewed and Mr. Rose resigned from all his positions with the Company and its
subsidiaries, including his position as a director of the Company. On November
12, 1996, Jonathan Rosenberg was elected President of the Company and Howard
Katz was elected a director
ITEM 8. CHANGE IN FISCAL YEAR
On November 12, 1996, the Board of Directors of Diplomat Corporation (the
"Company") approved the change of the Company's fiscal year to September 30.
As a result of the change in the fiscal year the Company will file an Annual
Report on Form 10-KSB for the transition period from January 1, 1996 to
September 30, 1996 and will not file a Quarterly Report on Form 10-QSB for the
quarter and nine months ended September 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIPLOMAT CORPORATION
Date: November 26, 1996 By: /s/ Jonathan Rosenberg
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JONATHAN ROSENBERG, PRESIDENT
