-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JB3jrnuRNO/CIiNGqgQ+1Q+xWVRpynfXDjTBFnHBFqaWwnXJxtejDt/YIxK6M6Q1 03q1KaUVHFwAsrvGgDFe1A== 0001157523-05-009022.txt : 20051020 0001157523-05-009022.hdr.sgml : 20051020 20051020163302 ACCESSION NUMBER: 0001157523-05-009022 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050805 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Changes in Control of Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051020 DATE AS OF CHANGE: 20051020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DPAC TECHNOLOGIES CORP CENTRAL INDEX KEY: 0000784770 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 330033759 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14843 FILM NUMBER: 051147694 BUSINESS ADDRESS: STREET 1: 7321 LINCOLN WAY CITY: GARDEN GROVE STATE: CA ZIP: 92641 BUSINESS PHONE: 7148980007 MAIL ADDRESS: STREET 1: 7321 LINCOLN WAY CITY: GARDEN GROVE STATE: CA ZIP: 92641 FORMER COMPANY: FORMER CONFORMED NAME: DENSE PAC MICROSYSTEMS INC DATE OF NAME CHANGE: 19920703 8-K/A 1 a5000431.txt DPAC 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A Amendment No. 1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 5, 2005 DPAC TECHNOLOGIES CORP. (Exact name of registrant as specified in its charter) California 0-14843 33-0033759 (State or other jurisdiction (Commission File Number) I.R.S. Employer of incorporation) Identification Number 7321 Lincoln Way, Garden Grove, California 92841 (Address of principal executive office) (Zip Code) 714/ 898-0007 Registrant's telephone number, including area code Not Applicable (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |X| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 1 - Registrant's Business and Operations Item 1.01 Entry into a Material Definitive Agreement (a) On October 20, 2005 the Registrant entered into amendments of two material agreements: 1. The Second Amendment, dated October 20, 2005, to the Agreement and Plan of Reorganization (the "Second Amendment") between the Registrant and QuaTech, originally entered into on April 26, 2005, as subsequently amended by the First Amendment dated August 5, 2005. 2. The First Amendment to the Licensing Agreement, dated October 20, 2005 (the "License Amendment") among the Registrant, Quatech and DCV that licenses DCV and QuaTech and their successors the rights to manufacture and distribute the Registrant's Airborne(TM) wireless technology. The amendments to the agreements were announced in a press release dated October 20, 2005 and attached hereto as Exhibit 99.2, and incorporated herein by this reference. The Registrant and QuaTech entered into an Agreement and Plan of Reorganization on April 26, 2005 which provided for the Registrant's subsidiary to merge with and into QuaTech, Inc., an Ohio Corporation, in a stock for stock exchange, subject to shareholder approval and certain other conditions (the "Merger"), incorporated herein by this reference. As a result of certain changes in circumstances since the signing of the original agreement and the amendments, and in order to facilitate the closing of the Merger, the parties entered into the aforementioned agreements on October 20, 2005. DCV is the holder of 100% of the preferred stock of QuaTech. The Second Amendment changes the exchange ratio of the Registrant's common stock to be issued upon the closing of the business combination for each share of QuaTech common and preferred stock. The exchange ratio would result in existing DPAC shareholders owning approximately 30% of the issued and outstanding common stock of the combined entity created by the merger of QuaTech and DPAC, prior to the conversion of the bridge loan provided by DCV to DPAC on August 5, 2005. After the conversion of the bridge loan, which occurs automatically upon the consummation of the merger with QuaTech, provided the merger occurs on or before February 3, 2006, existing DPAC shareholders would own approximately 25.5% of the issued and outstanding common stock after the Merger. The Second Amendment also extends the termination date of the Agreement and Plan of Reorganization to March 31, 2006, and establishes as a condition to the closing of the business combination a requirement that QuaTech consummate $3.1 million in debt financing prior to the Merger, and subsequently exercise its option to prepay license fees, as described in the First Amendment to the License Agreement as described below. Section 2 - Financial Information Item 2.01 Disposition of Assets As stated in item 1.01 the Registrant has licensed all its technology to DCV pursuant to the License Agreement. (Item 1.01, which contains relevant information, is incorporated herein by this reference). The License Amendment grants an option to QuaTech to elect to prepay all exclusive license fees under the original license agreement for a one-time cash payment of $2.4 million, subject to DPAC shareholder approval. Under the License Amendment, the parties agree that $2.4 million shall be considered the fair market value of the exclusive license. If QuaTech elects to exercise its option to prepay the license fees, the cash payment will be held in escrow pending the outcome of the DPAC shareholder vote to approve the License Agreement and pending the merger. If DPAC shareholders approve the License Agreement, and if the Agreement and Plan of Reorganization is terminated for any reason, QuaTech shall be entitled to a return of the escrowed funds, and the license will be converted to a non-exclusive license under which QuaTech will continue to be obligated to pay license fees to DPAC based on unit shipments of Airborne(TM) wireless products. Section 5 - Corporate Governance and Management Item 5.01 Changes in Control of Registrant If the Merger is completed, DCV will beneficially own approximately 52.4% of the Registrant's common stock, and this will result in a Change of Control (Item 1.01, which contains relevant information, is incorporated herein by this reference). Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits (c) Exhibits Exh. No. Description - -------- ----------------------------------------------------------- 2.4 Agreement and Plan of Reorganization dated April 26, 2005 among the Registrant, DPAC Acquisition Sub, Inc. and QuaTech, Inc., including selected exhibits: Forms of Shareholder and Registration Rights Agreement, Employment Agreement for Steven Runkel and Employment Agreement for Creighton Early. Other exhibits listed in the exhibit list in the Table of Contents have been omitted from this filing but will be filed by the Registrant if requested by the Securities Exchange Commission* 2.4.1 Typed signatures to Exhibit 2.4** 2.4.2 First Amendment dated August 5, 2005 to Agreement and Plan of Reorganization*** 2.4.3 Second Amendment dated October 20, 2005 to Agreement and Plan of Reorganization 2.5 License Agreement dated August 5, 2005*** 2.5.1 First Amendment dated October 20, 2005 to License Agreement dated August 5, 2005 10.24 Bridge Loan and Escrow Agreement dated July 29, 2005*** 10.25 Convertible Term Note dated August 5, 2005*** 10.26 Loan Agreement dated August 5, 2005*** 10.27 Security Agreement dated August 5, 2005 with attached Riders*** 99.1 Press Release of Registrant dated August 5, 2005*** 99.2 Press Release of Registrant dated October 20, 2005 - ----------------------------------------------------------------------------- * Filed as a like-numbered Exhibit to the Registrant's Form 8-K/A filed with the SEC on April 27, 2005. ** Filed as a like-numbered Exhibit to the Registrant's Form 8-K/A filed with the SEC on May 20, 2005. *** Filed as a like-numbered Exhibit to the Registrants Form 8-K filed with the SEC on August 9, 2005. 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. DPAC Technologies Corp. (Registrant) Date October 20, 2005 /s/ Creighton K. Early ---------------------------------------------------- (Signature) Creighton K. Early, Chief Executive Officer ---------------------------------------------------- (Name and Title) Exh. No. Description - -------- ----------------------------------------------------------- 2.4 Agreement and Plan of Reorganization dated April 26, 2005 among the Registrant, DPAC Acquisition Sub, Inc. and QuaTech, Inc., including selected exhibits: Forms of Shareholder and Registration Rights Agreement, Employment Agreement for Steven Runkel and Employment Agreement for Creighton Early. Other exhibits listed in the exhibit list in the Table of Contents have been omitted from this filing but will be filed by the Registrant if requested by the Securities Exchange Commission* 2.4.1 Typed signatures to Exhibit 2.4** 2.4.2 First Amendment dated August 5, 2005 to Agreement and Plan of Reorganization*** 2.4.3 Second Amendment dated October 20, 2005 to Agreement and Plan of Reorganization 2.5 License Agreement dated August 5, 2005*** 2.5.1 First Amendment dated October 20, 2005 to License Agreement dated August 5, 2005 10.24 Bridge Loan and Escrow Agreement dated July 29, 2005*** 10.25 Convertible Term Note dated August 5, 2005*** 10.26 Loan Agreement dated August 5, 2005*** 10.27 Security Agreement dated August 5, 2005 with attached Riders*** 99.1 Press Release of Registrant dated August 5, 2005*** 99.2 Press Release of Registrant dated October 20, 2005 - ----------------------------------------------------------------------------- * Filed as a like-numbered Exhibit to the Registrant's Form 8-K/A filed with the SEC on April 27, 2005. ** Filed as a like-numbered Exhibit to the Registrant's Form 8-K/A filed with the SEC on May 20, 2005. *** Filed as a like-numbered Exhibit to the Registrants Form 8-K filed with the SEC on August 9, 2005. EX-99.2 2 a5000431ex992.txt EXHIBIT 99.2 EXHIBIT 99.2 DPAC and QuaTech Amend Reorganization Agreement and License Agreement GARDEN GROVE, Calif.--(BUSINESS WIRE)--Oct. 20, 2005--DPAC Technologies Corp. (OTCBB:DPAC): -- Reorganization agreement's amendment changes exchange ratio and extends agreement termination date to March 31, 2006. -- License agreement's amendment gives QuaTech an option to prepay exclusive license fees to DPAC for a one-time cash payment of $2.4 million. -- DPAC expects to file a Form S-4 registration statement and seek shareholder approval. DPAC Technologies Corp. (OTCBB:DPAC), Development Capital Ventures LP ("DCV") and QuaTech, Inc. (www.quatech.com) today announced that they have for the second time amended their agreement and plan of reorganization and have for the first time amended their license agreement. The reorganization agreement was originally entered into on April 26, 2005, and provides for DPAC to acquire all of the stock and options of QuaTech in exchange for issuing previously unissued shares of DPAC's common stock. The amendment to the agreement between DPAC and QuaTech establishes a new exchange ratio. The new exchange ratio was informally based on DPAC's shareholders as of immediately before the merger continuing to hold (as of immediately after the merger) 30% of the outstanding common stock of DPAC, before the potential dilutive effects of conversion of an outstanding bridge loan, which would result in current DPAC shareholders owning approximately 25.5% of the issued and outstanding shares immediately following the consummation of the merger. The merger shall be contingent on QuaTech consummating approximately $3.1 million in debt financing in accordance with the terms of nonbinding proposals it has obtained from lenders; however, it is no longer a condition that QuaTech repay its outstanding subordinated note in the original principal amount of $3.0 million. The amendment also extends the termination date of the reorganization agreement to March 31, 2006. The parties have also amended the license agreement between DPAC, DCV and QuaTech that was originally entered into on August 5, 2005. The amendment provides an option for QuaTech to elect to prepay all exclusive license fees for a one-time cash payment of $2.4 million, which the parties have agreed is the fair market value of the exclusive license. The exclusive license remains subject to DPAC shareholder approval. If QuaTech exercises its option to prepay the license fees, the cash will be held in escrow pending DPAC shareholder approval. If DPAC's shareholders approve the license agreement, and if the merger agreement is terminated for any reason, QuaTech has the option of rescinding its election to prepay and allow the license to convert to a non-exclusive license with the obligation to pay ongoing license fees to DPAC based on quantities shipped. In that event, the cash payment in escrow will be returned to QuaTech. If DPAC's shareholders do not approve the license agreement, and the merger agreement is terminated, the license shall automatically be converted to a non-exclusive license, with royalties payable in the normal course, and any prepaid license fees shall be returned. DPAC intends to file an S-4 registration statement with the Securities and Exchange Commission as soon as possible. The S-4 will seek DPAC shareholders approval of the proposed merger and exclusive license agreement, as well as certain other proposals, including a proposal to increase the number of authorized shares and a proposal to approve a reverse split of the company's common stock upon or after consummation of the merger with QuaTech. The Board of Directors has determined that shareholders of record as of December 15, 2005 shall be entitled to notice of and to vote on these matters at a DPAC annual shareholders' meeting to be held on February 3, 2006. About DPAC Technologies Located in Garden Grove, California, DPAC Technologies provides embedded wireless networking and connectivity products for machine-to-machine communication applications. DPAC's wireless products are used by major OEMs in the transportation, instrumentation and industrial control, homeland security, medical diagnostics and logistics markets to provide remote data collection and control. The Company's web site address is www.dpactech.com. Information concerning DPAC is filed by DPAC with the SEC and is available on the SEC website, www.sec.gov. About QuaTech QuaTech, a privately-held company, is an industry performance leader in device networking and connectivity solutions. Through design, manufacturing and support, QuaTech maintains the highest levels of reliability and performance. Satisfied customers include OEMs, VARs and System Integrators, as well as end-users in many industries, including banking, retail/POS, access control, building automation and security, and energy management. QuaTech is a leading supplier of data connectivity products to financial institutions, serving five of the top 10 U.S. banks. Founded in 1983 and headquartered in Hudson, Ohio, QuaTech sells and supports its solutions both directly and through a global network of resellers and distributors. www.quatech.com About Development Capital Ventures, LP Headquartered in Chantilly, Virginia, Development Capital Ventures is a Small Business Investment Company licensed and regulated by the Small Business Administration under the Small Business Act of 1958 as amended. Development Capital Ventures provides financing to manufacturing, distribution, and business-to-business service companies. Forward-Looking Statements This press release includes forward-looking statements. You can identify these statements by their forward-looking words such as "may," "will," "expect," "anticipate," "believe," "guidance," "estimate," "intend," predict," and "continue" or similar words or any connection with any discussion of future events or circumstances or of management's current estimates or beliefs. Forward-looking statements are subject to risks and uncertainties, and therefore results may differ materially from those set forth in those statements. A transaction as contemplated would require approvals of the Boards of Directors and shareholders of both parties and numerous other conditions. Full details of such a transaction will be provided to DPAC shareholders and filed with the SEC by DPAC as and when appropriate. There is no assurance possible, and none is intended, that the transaction will be completed at all or on the terms described. The transaction is and shall continue to be subject to certain conditions and contingencies until the transaction is completed. DPAC Technologies Corp. will provide further detailed information to its shareholder as and when required to solicit their consent. The transaction's costs and diversion of management attention could negatively impact results. The recent delisting of our shares could continue to have adverse effects on the liquidity of trading in the common stock and the price per share. Other factors that affect DPAC's business and its ability to conclude a merger transaction include, but are not limited to, that our Airborne(TM) products are new, that we sell to original equipment manufacturers for new product introductions by them, and that all of these are subject to risks and uncertainties regarding new product introductions such as uncertainty of market acceptance. The parties need additional financing to complete the transactions as envisioned. Such financing may not be available on favorable terms, and if available may result in issuance of warrants and additional dilution to holders of DPAC common stock. Also, there can be no assurance that such transaction will be completed or, if completed, that it will be successful. The transaction would involve a change of control, in that voting control of DPAC would be transferred to a former principal shareholder of QuaTech. Other factors that affect DPAC's business include, but are not limited to, the degree of market acceptance of our existing and planned wireless connectivity products, future business opportunities with these products, protection of licensed technology or proprietary rights, risks of litigation, our need for additional financing in order to realize our opportunities, other challenges related to completing our proposed merger with QuaTech, Inc., further challenges in subsequently combining our operations with QuaTech, Inc.'s own, and general market and economic conditions. More information about the risks and challenges faced by DPAC Technologies Corp. is contained in the Securities and Exchange Commission filings made by the Company on Form 10-K, 10-Q and 8-K. DPAC Technologies Corp. specifically disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, future developments or otherwise. Additional Information: DPAC and QUATECH strongly urge their respective shareholders to read the relevant documents related to this transaction as and when filed by DPAC with the SEC, including especially a proxy statement/prospectus related to this transaction, because they shall contain important information all the shareholders should consider. All DPAC's SEC filings are made available free of charge at the SEC website (www.sec.gov). Such documents, when filed, also are made available free of charge by DPAC. DPAC has filed Forms 8-K or 8-K/A on April 27, 2005, August 9, 2005, and October 20, 2005 containing the current agreements between DPAC and QUATECH. This news release is neither a solicitation of any proxies nor an offer of any securities of any kind whatsoever. No securities mentioned herein have been registered or authorized or approved by any federal or state securities regulator or commission. CONTACT: DPAC Technologies Corp. Stephen Vukadinovich or Kim Early, 714-898-0007 Steve.Vukadinovich@dpactech.com Kim.Early@dpactech.com -----END PRIVACY-ENHANCED MESSAGE-----