1
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 Act of 1934
Date of Report (Date of Earliest Event Reported): MARCH 30, 2001
--------------
NEMATRON CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 0-21142 38-2483796
-------- ------------- -------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5840 INTERFACE DRIVE, ANN ARBOR, MICHIGAN 48103
-----------------------------------------------
(Address of principal executive offices) (Zip Code)
(734) 214-2000
-------------------------------
(Registrant's telephone number)
2
ITEM 5 - OTHER EVENTS
On March 30, 2001, Nematron Corporation ("Nematron" or the "Company") completed
the acquisition of 100% of the outstanding stock of Optimation, Inc.
("Optimation") pursuant to a Stock Purchase Agreement, dated as of March 30,
2001, by and among the Nematron, Dennis A. Sierk, Sheila D. Sierk, Charles
Garrett and Kerry Garrett (collectively, the "Sellers"). Optimation is a
Huntsville, Alabama -based company that develops, produces and markets
industrial communications and display products for industrial automation.
Optimation's customers include those in the material handling, semiconductor
equipment, packaging and various process control industries.
Under the terms of the Stock Purchase Agreement, Nematron purchased 100% of the
outstanding shares of Optimation for $1,600,000. The components of the purchase
price included $300,000 of cash at closing, $300,000 of cash due ninety-days
after closing and $1,000,000 in shares of Nematron Common Stock. The number of
shares of Nematron Common Stock to be issued was based on the average closing
price of Nematron Common Stock for the ten trading days ending with March 22,
2001. Based on such average, a total of 1,483,680 shares of Nematron Common
Stock were issued to the Sellers in a private placement under federal and state
securities laws
The $300,000 cash portion of the purchase price paid at closing was provided
from the proceeds of convertible subordinated promissory notes (the "Notes") and
warrants sold in March 2001. Between March 23 and March 30, 2001, the Company
issued $1.2 million principal amount of Notes and warrants to purchase 800,000
shares of Nematron Common Stock to four accredited investors in a private
placement. A portion of the proceeds from the sale of the Notes was used to
acquire Optimation and the remaining $900,000 was added to working capital. The
Notes, which are secured by a second lien on the Company's assets and are
subordinated in right of payment to the Company's bank lender, bear interest at
10% and are due on August 31, 2001. The Notes will become immediately due and
payable in full if the Company does not receive by May 31, 2001 shareholder
approval of the Note transaction. The Notes are prepayable at any time without
penalty upon prior written notice as provided in the Notes. The holders of the
Notes are not permitted to transfer them without the Company's prior written
consent.
The Stock Purchase Agreement was negotiated on an arm's length basis between the
parties. The consideration paid by the Company was based upon a number of
factors, including estimated fair values of net assets acquired; estimated
future revenues, income and cash flows; estimated values of identified
intangible assets, including Optimation' workforce, contracts, customer base and
locations, and the market price for the Company's Common Stock.
The Company will account for the acquisition of 100% of the stock of Optimation
as a purchase in accordance with the accounting standards promulgated under
Accounting Principles Board No. 16, "Business Combinations" ("APB-16") and
relevant AICPA Interpretations, Accounting Research Bulletins, FASB Statements,
Interpretations and Technical Bulletins which serve as amendments to APB-16.
In connection with the Stock Purchase Agreement, Nematron also entered into
three-year employment agreements and three-year agreements not to compete with
Optimation's president and vice-president.
Optimation will continue to operate as a wholly owned subsidiary of Nematron
from Optimation's headquarters in Huntsville, Alabama.
Prior to the acquisition of Optimation by the Company, there were no agreements
or business relationships between the Company or its affiliates, directors or
officers and Optimation or its affiliates, directors or officers.
The assets acquired do not meet the tests of "significant assets" as promulgated
under Regulation S-B of the Securities Act of 1934.
--oo0oo--
2
3
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 hereto duly authorized.
NEMATRON CORPORATION
--------------------
(Registrant)
April 4, 2001 /S/ DAVID P. GIENAPP
- ------------- ------------------------------
Secretary, Treasurer and Vice
President, Finance and
Administration
3