SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K/A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act
Date of Report
(Date of earliest event reported)
UTAH 00031377 870642556
---- -------- ---------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
1270 South 1380 West
Orem, Utah 84058
--------------------
(Address of Principal Executive Offices)
(801-226-4100
-------------
(Registrant's Telephone Number)
|
Check the appropriate box below if the Form 8K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see general instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a12 under the Exchange Act
(17 CFR 240.14a12)
[ ] Precommencement communications pursuant to Rule 14d2(b) under the Exchange Act (17 CFR 240.14d2(b))
[ ] Precommencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e4(c))
Item 1.01 Entry into a Material Definitive Agreement
(a) Effective as of November 17, 2006, the Registrant ("Reflect," the "Company," "we," "our," "us" and words of similar import) entered into an Agreement and Plan of Merger (the "Merger Agreement" and the "Merger") among Reflect; Cryometrix, Inc., a California corporation and whollyowned subsidiary of Reflect ("Merger Subsidiary"); All Temp Engineering Inc., a California corporation ("All Temp"); J F Dain & E L Dain CO T Tee Dain Family Revocable Trust U/A Dated 12/17/2001 (the "Dain Trust") and Nicholas J. Henneman ("Henneman"), the sole All Temp Shareholders (collectively, the "All Temp Shareholders"); and John F. Dain, individually ("Dain"). Pursuant to the Merger Agreement, on January 19, 2007, All Temp merged with and into the Merger Subsidiary with the Merger Subsidiary being the surviving corporation. A copy of the Agreement of Merger filed with the Secretary of State of the State of California accompanies this Current Report and is incorporated herein by reference. See Item 9.01, Exhibit 2.2.
Under the Merger Agreement, Reflect:
1. Issued to the All Temp Shareholders an aggregate of 2,000,000 shares of its common stock that are "restricted securities" as defined in Rule 144, 1,000,000 shares to each, with no registration rights to have these securities included in a registration statement filed with the Securities and Exchange Commission.
2. Will pay the All Temp Shareholders a pro-rata running royalty
totaling 5.0% of the gross annual revenues earned after Closing (the
"Royalty") on All Temp's business that will be maintained as a separate
division within the Surviving Corporation (the "Royalty Business Segment").
The Royalty shall be paid so long as Reflect owns and operates the Royalty
Business Segment of All Temp and on revenues earned, providing it does not
result in the Royalty Business Segment earnings as measured by earnings before
interest and taxes ("EBIT") of less than 10%, and accordingly, such Royalty
shall be paid in accordance with Exhibit 1.3(c) to the Merger Agreement. The
foregoing royalty shall be paid quarterly within 45 days following the close
of each quarter and assumes the Royalty Business Segment of All Temp that will
be maintained separately within the Surviving Corporation ("Company Business
Division") is profitable as represented by the All Temp Shareholders.
Reflect shall maintain complete and accurate financial and other records
necessary to comply with Section 1.3(c) of the Merger Agreement. Reflect shall
submit written summary financial reports on a quarterly basis to the All Temp
Shareholders. The All Temp Shareholders shall have the right to, through
independent accountants of their own choosing and at their own expense, audit
the financial and other records of Reflect respecting the Company Business
Division at reasonable times, at least once per fiscal year, to determine
compliance with Section 1.3(c) of the Merger Agreement. In the event such
audit reveals that Reflect has not accurately or adequately complied with
Section 1.3(c) of the Merger Agreement, the costs of said audit shall be borne
by Reflect. Reflect shall provide Company Business Division with an adequate
operating budget reasonably required to allow the Company Business Division to
maximize revenues which operating budget shall be no less than as is
consistent with All Temp's historical operating budget. If, within three (3)
years of the closing, the Company Business Division is transferred (by means
of a sale of assets, merger, sale of stock or otherwise), the All Temp
Stockholders shall receive a cash payment of Six Hundred Thousand Dollars
($600,000) less any accumulated royalties payable under the Merger Agreement,
which will partially reimburse the All Temp Shareholders for loans they are
forgiving in connection with this transaction. However, no payment shall be
made if the Company Business Division is terminated or liquidated due to non
performance.
Reflect(s Board of Directors unanimously approved the Merger and related agreements. During the course of its deliberations regarding the Merger, the Board of Directors considered a number of factors relevant to the Merger, such as All Temp(s business history, financial condition and intellectual property, the terms of the Merger, and historical information concerning All Temp(s business, financial performance and condition, operations, technology, management and competitive position; and also considered a number of the Company's key needs, including, but not limited to:
* Reflect(s desire to expand its services offerings, either through internal development or by licensing or acquiring complimentary or new technologies; and
* its desire to attract and retain talented technical personnel to compliment these new developments or technologies.
Reflect(s Board of Directors also assessed the value of the Merger to its shareholders in light of various factors and potential benefits of the Merger, including:
* the current intrinsic value of the combined companies;
* strategic and financial advantages to the combined businesses that may result from the Merger, such as potential improvements in their ability to access financial markets and acquisition purposes;
* potential for future appreciation of Reflect(s common stock;
* potential risks associated with the Merger; and
* the longterm interests of Reflect and its shareholders;
* information concerning the business prospects and potential operations and financial condition of Reflect and All Temp, both individually and on a combined basis;
* the terms of the Merger Agreement, including that the Merger will likely qualify as a tax free reorganization to Reflect for federal income tax purposes;
* projected relative ownership interests of Reflect(s shareholders and All Temp shareholders in Reflect immediately following the Merger;
* the likelihood that the Merger would be consummated; and
* Reflect(s desire to find an attractive candidate for a reorganization or merger that would be beneficial to it and its shareholders and provide products that current clients and customers would be interested in purchasing, as well as others.
A copy of the Merger Agreement accompanied the Company's 8-K Current Report dated November 17, 2006, which was filed on November 22, 2006; the foregoing summary is modified in its entirety by such reference. See Item 9.01, Exhibit 2.1.
Item 2.01 Completion of Acquisition or Disposition of Assets.
(a) On January 19, 2007, All Temp merged with and into the Merger Subsidiary with the Merger Subsidiary being the surviving corporation.
(b) Pursuant to the Merger Agreement, and as of January 4, 2007, All Temp, with limited exceptions, transferred all of its Accounts Payables and Accounts Receivables to Reflect, and Reflect assumed, with limited exceptions, all such Accounts Payables and Accounts Receivables from that date forward. Additionally, Reflect acquired certain assets of All Temp consisting of: (1) Six heavy duty service trucks; (2) machinery and equipment consisting of sheet metal fabrication tooling, calibration equipment and welding equipment; (3) office equipment consisting of desk, chairs, files, conference facilities, fax machines and copy machines; (4) computer equipment consisting of computer work stations, laptop computers and servers; (5) software consisting of server system software, manufacturing design software and Office Suite; and (6) leasehold improvements consisting of build out for multiple workstations.
(c) See Item 1.01.
(d) See Item 1.01.
Item 7.01 Regulation FD Disclosure
See Exhibit 99.1, Press Release dated November 20, 2006, a copy of which accompanied the Company's 8-K Current Report dated November 17, 2006, which was filed on November 22, 2006.
See Exhibit 99.2, Press Release dated January 23, 2007, a copy of which accompanies this Current Report and is incorporated herein by reference. See Item 9.01, Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired:
These financial statements will be filed within seventy-five (75) days of the date of Closing, or on or before April 4, 2007.
(b) Pro Forma Financial Information.
The pro forma financial statements will be filed within seventy-five
(75) days of the date of Closing, or on or before April 4, 2007.
(c) Registrant(s Exhibits:
2.2 Agreement of Merger filed with the State of California
99.2 Press Release dated January 23, 2007, regarding completion of Agreement and Plan of Merger
2.1 Agreement and Plan of Merger
99.1 Press Release dated November 20, 2006, regarding signing of Agreement and Plan of Merger
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
REFLECT SCIENTIFIC, INC.
Date: January 23, 2007 /s/ Kim Boyce
Kim Boyce
President and Director
|
AGREEMENT OF MERGER
This Agreement of Merger (the "Agreement of Merger") is dated as of January 16, 2007, by and among CRYOMETRIX, INC., a California corporation and wholly-owned subsidiary of Parent ("Surviving Corporation") and ALL TEMP ENGINEERING, INC., a California corporation ("Disappearing Corporation"). Surviving Corporation and Disappearing Corporation are collectively referred to herein as the "Constituent Corporations".
A. Disappearing Corporation and Surviving Corporation, along with Reflect Scientific, Inc., a Utah corporation ("Parent"), have entered into that certain Agreement and Plan of Merger dated as of November 14, 2006 (the "Plan of Merger"), providing, among other things, for the execution and filing of this Agreement of Merger and the merger of the Disappearing Corporation with and into the Surviving Corporation (the "Merger") upon the terms and subject to the conditions set forth in the Plan of Merger and this Agreement of Merger; and
B. The respective boards of directors of each of the Constituent Corporations deem it advisable and in the best interests of each of such corporations, and their respective shareholders, that the Disappearing Corporation be merged with and into Surviving Corporation; and
C. The shareholders of Disappearing Corporation and Surviving Corporation have unanimously adopted and approved of the Plan of Merger.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual representations, warranties, covenants, and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 Surviving Corporation. Surviving Corporation is a California corporation organized on October 27, 2005, and has one (1) share of common stock outstanding.
1.2 Disappearing Corporation. Disappearing Corporation is a California corporation organized on May 6, 1985, and has ten thousand (10,000) shares of common stock outstanding.
1.3 Filing. This Agreement of Merger, together with the officers' certificates of each of the Constituent Corporations required by the General Corporation Law of the State of California (the "California Law"), shall be filed with the Secretary of State of the State of California at the time specified in the Plan of Merger.
1.4 Effectiveness. The Merger shall become effective at the time this Agreement of Merger is filed with and accepted by the Secretary of State of the State of California (the "Effective Time").
1.5 Merger. At the Effective Time, Disappearing Corporation shall be merged into Surviving Corporation and the separate corporate existence of Disappearing Corporation shall thereupon cease. Surviving Corporation shall be the surviving corporation in the Merger and the separate corporate existence of Surviving Corporation, with all of its purposes, objects, rights, privileges, powers, immunities and franchises, shall continue unaffected and unimpaired by the Merger.
1.6 Further Action. If at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement of Merger or to vest the Surviving Corporation with the full right, title and possession to all assets, property, rights, privileges, immunities, powers and franchises of either or both of the Constituent Corporations, the officers and directors of the Surviving Corporation are fully authorized in the name of either or both of the Constituent Corporations or otherwise to take all such action.
ARTICLE II
CORPORATE GOVERNANCE MATTERS
2.1 Articles. The Articles of Incorporation and Bylaws of Surviving Corporation shall not be amended or effected by the Merger.
ARTICLE III
MERGER CONSIDERATION
3.1 Conversion. At the Effective Time, by virtue of the Merger and without any action on the part of the Surviving Corporation and/or the Disappearing Corporation:
(a) Each outstanding share of common stock of the Disappearing Corporation ("Disappearing Corporation Common Stock") issued and outstanding immediately prior to the Effective Time (except for common stock referred to in Section 3.1(c) hereof) will be converted into Two Hundred (200) shares of the common stock of Parent such that all outstanding shares of Disappearing Corporation Common Stock issued and outstanding immediately prior to the Effective Time (except for common stock referred to in Section 3.1(c) hereof) will be converted into an aggregate total of two million (2,000,000) shares of the common stock of Parent. No fractional shares shall be issued. As further consideration for the Merger, Parent shall pay to the shareholders of Disappearing Corporation a pro-rata running royalty of up to 5.0% of the gross annual revenues earned after Closing (the "Royalty") on the All Temp Engineering business segment that will be maintained as a separate division within the Surviving Corporation (the "Royalty Business Segment"). The Royalty shall be paid so long as Parent owns and operates the Royalty Business Segment and on revenues earned, providing it does not result in the Royalty Business Segment earnings, as measured by earnings before interest and taxes ("EBIT"), of less than 10%, and accordingly, such Royalty shall be paid in accordance with the following table:
E R
------------------------------
Up to 10 0
11 1
12 2
13 3
14 4
15 5
16 and higher 5
|
For purposes of the above table, "E" is the Royalty Business Segment's EBIT on a percentage of revenue basis; and "R" is the percent royalty to be paid to the shareholders of Disappearing Corporation based on revenues less any amounts paid in commissions and freight, i.e., actual revenues received for services and products. Fractional amounts shall be prorated accordingly using the formula R = E - 10, when E falls between 10 and 15. By way of example, if "E" is 12.36 percent of revenue the Royalty basis shall be 2.36 percent. The foregoing Royalty shall be paid quarterly within 45 days following the close of each quarter and assumes the Royalty Business Segment will be maintained separately within the Surviving Corporation ("Company Business Division") is profitable as represented by the shareholders of the Disappearing Corporation. If, within three (3) years of the Closing, the Company Business Division is transferred (by means of a sale of assets, merger, sale of stock or otherwise), the shareholders of Disappearing Corporation shall receive a cash payment of Six Hundred Thousand Dollars ($600,000.00) less any accumulated royalties payable under this agreement. However, no payment shall be made if the Company Business Division is terminated or liquidated due to non performance.
(b) All stock options, warrants, convertible debt, other convertible securities or other rights to acquire shares of the Disappearing Corporation outstanding at the Effective Time, whether or not exercisable and whether or not vested, shall be cancelled.
(c) Except as expressly set forth herein, each share of any other equity interest of the Disappearing Corporation (other than Disappearing Corporation Common Stock) will be canceled without payment of any consideration therefor and without any conversion thereof.
(d) Each share of common stock of Surviving Corporation, ("Surviving Corporation Common Stock"), issued and outstanding immediately prior to the Effective Time, will remain outstanding as of the Effective Time and will not be effected by the Merger.
(e) Each holder of shares of Disappearing Corporation Common Stock shall surrender their share certificate or certificates to the secretary of Surviving Corporation and shall be entitled to receive in exchange therefor a certificate or certificates representing the number of shares into which their shares theretofore represented by a certificate or certificates so surrendered shall have been converted as aforesaid.
ARTICLE IV
TERMINATION AND AMENDMENT
4.1 Termination. Notwithstanding the approval of this Agreement of Merger by the shareholders of Disappearing Corporation and Surviving Corporation, this Agreement of Merger shall terminate forthwith in the event that the Plan of Merger shall be terminated as therein provided.
4.2 Amendment. This Agreement of Merger may be amended by the parties hereto at any time before or after approval hereof by the shareholders of either Disappearing Corporation or Surviving Corporation, but, after any such approval, no amendment shall be made which without the further approval of such shareholders would (i) have a material adverse effect on the shareholders of either Disappearing Corporation or Surviving Corporation; (ii) change any of the principal terms of the Plan of Merger; or (iii) change any term of the Articles of Incorporation of the Surviving Corporation. This Agreement of Merger may not be amended except by an instrument in writing signed on behalf of each of the parties hereto prior to the Effective Time.
ARTICLE V
MISCELLANEOUS
5.1 Headings. The underlined headings contained in this Agreement of Merger are for convenience of reference only, shall not be deemed to be a part of this Agreement of Merger and shall not be referred to in connection with the construction or interpretation of this Agreement of Merger.
5.2 Counterparts. This Agreement of Merger may be executed in several counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement.
5.3 Governing Law. This Agreement of Merger shall be construed in accordance with, and governed in all respects by, the internal laws of the State of California (without giving effect to principles of conflicts of laws).
5.4 Effectiveness. The effect of the Merger is as prescribed by law.
IN WITNESS WHEREOF, the parties have executed this Agreement of Merger.
SURVIVING CORPORATION:
CRYOMETRIX, INC., a California corporation
By /s/ Kim Boyce
KIM BOYCE, President
By /s/ Pamela Boyce
PAMELA BOYCE, Secretary
|
DISAPPEARING CORPORATION:
ALL TEMP ENGINEERING, INC.,
a California corporation
By /s/ Nicholas J. Henneman
NICHOLAS J. HENNEMAN, President
By /s/ John F. Dain
JOHN F. DAIN, Chief Executive
Officer and Secretary
|
OFFICERS' CERTIFICATE
NICHOLAS J. HENNEMAN and JOHN F. DAIN and hereby certify that:
1. NICHOLAS J. HENNEMAN is the President of ALL TEMP ENGINEERING, INC., a California corporation (the "Corporation"); John F. Dain is the Chief Executive Officer and the Secretary of the Corporation.
2. The Agreement of Merger to which this Certificate is attached (the "Agreement of Merger") has been duly approved by the Board of Directors of the Corporation.
3. The Corporation has one class of stock outstanding, designated "Common Stock," of which ten thousand (10,000) shares were outstanding and entitled to vote on the merger.
4. The principal terms of the Agreement of Merger were approved by the unanimous vote of the shares of common stock outstanding which equaled or exceeded the vote required. The vote required was a majority of the outstanding shares of the Common Stock entitled to vote.
Each of the undersigned declare under penalty of perjury that the matters set out in the foregoing Certificate are true of their own knowledge. Executed at Los Gatos, California on January 2, 2007.
/s/ Nicholas J. Henneman NICHOLAS J. HENNEMAN, President /s/ John F. Dain JOHN F. DAIN, Chief Executive Officer and Secretary |
OFFICERS' CERTIFICATE
Kim Boyce and Pamela Boyce hereby certify that:
1. They are the President and Secretary, respectively, of CRYOMETRIX, INC., a California corporation (the "Corporation").
2. The Agreement of Merger to which this Certificate is attached (the "Agreement of Merger") has been duly approved by the Board of Directors of the Corporation.
3. The Corporation has one class of stock outstanding, designated "Common Stock," of which one (1) share was outstanding and entitled to vote on the merger.
4. The principal terms of the Agreement of Merger were approved by the unanimous vote of the shares of common stock outstanding which equaled or exceeded the vote required. The vote required was a majority of the outstanding shares of the Common Stock entitled to vote.
5. The vote of the shareholders of REFLECT SCIENTIFIC, INC., the parent of the Corporation which parent corporation is issuing equity securities to the shareholders of ALL TEMP ENGINEERING, INC. pursuant to the Agreement of Merger, was not required.
Each of the undersigned declares under penalty of perjury that the matters set out in the foregoing Certificate are true of his or her own knowledge. Executed at Orem, Utah on January 16, 2007.
/s/ Kim Boyce KIM BOYCE, President /s/ Pamela Boyce PAMELA BOYCE, Secretary |
Reflect Scientific, Inc. Announces It Has Completed The Acquisition Of All Temp Engineering
Orem, Utah (BUSINESS WIRE) Tuesday, January 23, 2007 Reflect Scientific, Inc. (OTC: BB RSCF), an industry leader whose business is the manufacture, supply and distribution of Scientific equipment and related supplies to the Life Sciences industry announces the Company has completed the closing of the merger agreement with All Temp Engineering, a California corporation.
All Temp Engineering will be integrated into Cryometrix Inc. and both businesses will operate from a new facility located in San Jose, California. Technology, marketing and other resource sharing will enable All Temp and the Cryometrix Products group to take advantage of synergistic and growing market opportunities while improving the overall efficiency of their operations. "The outlook for both businesses is excellent and this merger has strengthened our foundation to facilitate and support their future growth" remarked Mr. John Hammerman, General Manager, Cryometrix Inc.
About All Temp Engineering:
All Temp Engineering is located in San Jose, California and has been providing engineered solutions and services to the cryogenics and controlled environments industry for over 23 years. All Temp serves over 1,450 companies in business sectors such as Biotech, Pharmaceutical, Medical Device, Research, Universities, Semiconductor, Aerospace, Military and Industrial Food Processing.
About Reflect Scientific:
Reflect Scientific provides Scientific products for the biotechnology, pharmaceutical and medical industries and has had consistent year-over-year growth for more than 13 years. Reflect Scientific targets strategic acquisitions that will increase revenue and profits in their primary markets and that will fulfill Reflect's strategic imperative of significant, sustained revenue growth through innovative market need-based products.
Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence on third-party suppliers, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.
For information related to the Reflect Scientific, contact Investor Relations:
Michael Dancy, 801-746-3570, email: medancy@allwest.net, or visit:
www.reflectscientific.com.