-----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, S/fNc/VkhxURIkv81ZVa5/uT8BgS8dw8G328jLWN8SfN5tTA1VI5awJwW7iEZsmf bonmnVk0WcjcxEHA1HMX8w== 0001092306-02-000020.txt : 20020414 0001092306-02-000020.hdr.sgml : 20020414 ACCESSION NUMBER: 0001092306-02-000020 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020114 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DHB CAPITAL GROUP INC /DE/ CENTRAL INDEX KEY: 0000899166 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 113129361 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13112 FILM NUMBER: 02518267 BUSINESS ADDRESS: STREET 1: 555 WESTBURY AVE CITY: CARLE PLACE STATE: NY ZIP: 11514 BUSINESS PHONE: 5166212552 MAIL ADDRESS: STREET 1: 555 WESTBURY AVE CITY: CARLE PLACE STATE: NY ZIP: 11514 8-K 1 form8k.txt FORM 8-K DATED JANUARY 14, 2002 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) January 14, 2002 DHB INDUSTRIES, INC. ____________________ (Exact name of registrant as specified in its charter) DELAWARE 0-22429 11-3129361 ____________________________ ______________ ______________________ (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 555 WESTBURY AVE., CARLE PLACE, NEW YORK 11514 ________________________________________ __________ (Address of principal executive offices) (Zip Code) (516) 997-1155 ______________ Registrant's telephone number, including area code Item 5. OTHER EVENTS On January 14, 2002, David H. Brooks, the principal stockholder of the Company, exchanged $3 million of the approximately $10 million of indebtedness due him for 500,000 Shares of the newly authorized Series A Convertible Preferred Stock ("Preferred Stock"). The Preferred Stock has a dividend rate of $.72 per share per annum, an amount equal to the amount that would have been paid as interest on the exchanged indebtedness. Shares of the Preferred Stock are convertible, on a one-to-one basis, at the option of the holder, into shares of Common Stock. Notwithstanding the foregoing, each share of Preferred Stock shall automatically convert into one share of DHB Industries' Common Stock on March 15, 2002, if the Company's independent auditors do not certify to the Board of Directors by such date that the Company had a Stockholders' Equity of at least $4 million on December 31, 2001. The shares of Preferred Stock are redeemable at the option of the Company on December 15, 2002 and on each December 15th thereafter. The Company entered into the agreement in order to meet the listing standards of The American Stock Exchange that the Company has a minimum stockholders' equity of not less than $4 million. The Company has made application to the Exchange for listing; however, there can be no assurance that the Company's application will be approved. Item 7. EXHIBITS See Exhibits Index on page 3 of this report. 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 thereto duly authorized. DHB Industries, Inc. (Registrant) Date: January 28, 2002 By: /s/ DAVID H. BROOKS ______________________________ Name: David H. Brooks Title: Chief Executive Officer EXHIBIT INDEX Exhibit No. Description ___________ ___________ 3.3 Amendment to Certificate of Incorporation changing name to DHB Industries, Inc., filed with Delaware Secretary of State on July 24, 2001. 3.4 Certificate of Designations and Preference,filed with Delaware Secretary of State on December 26, 2001. 4.2 Stock Subscription Agreement between the Registrant and David H. Brooks, dated December 14, 2001. 99.1 Pro Forma Financial Statements as of September 30, 2001, giving effect to Preferred Stock offering described in Item 5 of this Form 8-K, and other equity activity. EX-3.3 3 certamendcertofinc.txt AMENDMENT TO CERTIFICATE OF INCORPORATION ... EXHIBIT 3.3 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF DHB CAPITAL GROUP INC. DHB Capital Group Inc. (the "Corporation"), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: 1. That by unanimous written consent, the Board of Directors of the Corporation duly adopted resolutions setting forth a proposed amendment to the Certificate of Incorporation declaring said amendment to be advisable and directing that the amendment be considered at the next Annual Meeting of the Stockholders of the Corporation. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Certificate of Incorporation be amended to change the name of the Company from DHB Capital Group Inc. to DHB Industries, Inc. and that for that purpose to amend Article First thereof to read in its entirety as follows: FIRST:The name of the corporation is DHB Industries, Inc. 2. That thereafter, the Annual Meeting of Stockholders of the Corporation was duly called and held on July 20, 2001, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares required by statute were voted in favor of the amendment. 3. That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said DHB Capital Group Inc. has caused this Certificate to be signed by David H. Brooks, its Chairman and Chief Executive Officer, and attested by Dawn M. Schlegel, its Secretary, this 20th day of July, 2001. DHB Capital Group Inc. /s/ DAVID H. BROOKS _____________________________ David H. Brooks, Chairman and Chief Executive Officer ATTEST: By /s/ DAWN H. SCHLEGEL ___________________________ Dawn H. Schlegel, Secretary EX-3.4 4 certofdesignation.txt CERTIFICATE OF DESIGNATIONS AND PREFERENCE ... EXHIBIT 3.4 CERTIFICATE OF DESIGNATIONS AND PREFERENCES DHB INDUSTRIES, INC. A DELAWARE CORPORATION The undersigned, David H. Brooks and Dawn Schlegel certify that: 1. They are respectively the duly elected and duly serving, President and Secretary, respectively, of DHB Industries, Inc. ("DHB", a Delaware corporation (the "Corporation"). 2. The Certificate of Incorporation of this Corporation includes the following provision: "FOURTH: Authorized Shares 1. The aggregate number of shares which the Corporation shall have authority to issue is 105,000,000 of which 5,000,000 shares of the par value of $.001 per share shall be designated "Preferred Shares" and 100,000,000 shares of the par value of $0.001 per share, shall be designated "Common Shares." 2. Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Shares as Preferred Shares of any series and, in connection with the creation of each such series, to fix by the resolution or resolutions providing for the issue of shares thereof, the number of shares of each series, and the designations, powers, preferences, and rights, and the qualifications, limitations and restrictions, of such series to the full extent now or hereafter permitted by the laws of the State of Delaware." 3. The Board of Directors of the Corporation has authorized the sale and issuance of Five Hundred Thousand (500,000) Shares of Preferred Stock in a single series, Series A Preferred Stock. 4. The rights, preferences, privileges, restrictions and other matters relating to the Five Hundred Thousand (500,000) shares of Series A Preferred Stock are as follows: Section I. Designation. Five Hundred Thousand (500,000) shares of Preferred Stock shall be designated and known as the "Series A Convertible Preferred Stock." The balance of the shares of Preferred Stock may be divided into such number of series as the Board of Directors may determine with such rights, preferences privileges and restrictions as the Board of Directors may determine in connection herewith. Section II. Dividends. (a) The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the assets of the Corporation which are legally available therefor, and prior and in preference to any declaration or payment of any dividend on any share of Common Stock, cash dividends in an amount per share of Seventy Two ($.72) annually, payable on the 15th day of December, 2002, and the 15th day of December each year thereafter unless earlier converted or redeemed. If the Board of Directors declares dividends on the Common Stock in excess of the dividend preference of the Series A Convertible Preferred Stock, the holders of Series A Convertible Preferred Stock shall participate in such excess dividend in the same proportion to which they would be entitled if their Series A Convertible Preferred Stock were converted into shares of Common Stock. (b) Dividends shall not accrue or accumulate on any share of Preferred Stock, except to the extent they are declared but unpaid. Accumulation of declared but unpaid dividends shall bear no interest. Section III. Redemption. On or after December 15, 2002, and on each December 15th thereafter, the Corporation shall have the right, at its option and by resolution of its Board of Directors, at any time it may lawfully do so, to redeem all or any portion of the outstanding shares of the Series A Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock to be so redeemed shall be redeemed against payment of an amount in cash equal to Six Dollars ($6.00) per Share, plus, in each case, all declared and unpaid dividends thereon to the date fixed for redemption. Dividends shall accrue at the rate of Eighteen Cents ($.18) per fiscal quarter. In the event the Corporation elects to redeem less than all of the outstanding shares of the Series A Convertible Preferred Stock, it shall effect such redemption ratably according to the number of shares of Series A Convertible Preferred Stock held by each holder of the then outstanding Series A Convertible Preferred Stock. Notice of such redemption (the "Redemption Notice") specifying the date fixed for said redemption (the "Redemption Date"), the redemption price, the place where the amount to be paid upon redemption is payable and the date on which such holder's Conversion Rights (as hereinafter defined) as to such shares terminate and calling upon such holder to surrender his certificate or certificates representing the shares to be redeemed to the Corporation in the manner and at the place to be designated in such Redemption Notice, shall be mailed, postage prepaid, at least Fifteen (15) days but not more than ninety (90) days prior to said Redemption Date to the holders of record of the Series A Convertible Preferred Stock at their respective addresses as the same shall appear on the books of the Corporation. On or after the Redemption Date, each holder of shares of the Series A Convertible Preferred Stock to be redeemed shall surrender his certificate or certificates representing such shares to the Corporation in the manner and at the place designated in the Redemption Notice, and thereupon the amount payable upon redemption shall be paid to the order of the person whose name appears on such certificate or certificates as the owner thereof. In the event that less than all of the shares represented by such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares. All shares of redeemed stock shall be cancelled and retired and not reissued. If the Redemption Notice shall have been so mailed, and if, on or before the Redemption Date specified in such notice, all funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the account of the holders of the shares to be redeemed, so as to be and continue to be available therefor, then, on and after said Redemption Date, notwithstanding that any certificate for shares so called for redemption shall not have been surrendered for cancellation, the shares represented thereby shall be deemed to be no longer outstanding, the right to receive dividends thereon shall cease, and all rights with respect to such shares of Series A Convertible Preferred Stock so called for redemption shall forthwith cease and terminate, except the right of the holders thereof to receive out of the funds set aside in trust the amount payable on redemption thereof but without any interest thereon. No redemption of the Series A Convertible Preferred Stock may be effected if, as a consequence thereof, the Shareholders Equity of the Corporation shall be reduced below Five Million ($5,000,000). If the funds of the Corporation legally available for redemption on any Redemption Date are insufficient to redeem the total number of shares to be redeemed on such date, those funds which are legally available will be used to redeem the maximum possible number of shares ratably among the holders of such shares to be redeemed. The shares of stock not redeemed shall remain outstanding and entitled to all the rights and preferences provided herein. Section IV. Preference on Liquidation. (a) SERIES A PREFERENCE. In the event of any liquidation, dissolution, involuntary or voluntary corporate reorganization under the federal bankruptcy laws or similar state laws, or winding up of the Corporation, the holders of shares of the Series A Convertible Preferred Stock then outstanding shall be entitled to be paid out of the assets and surplus funds of the Corporation available for distribution to its shareholders, and before any payment shall be made to the holders of any shares of Common Stock, an amount equal to Six dollars ($6.00) per share plus declared and unpaid dividends thereon to the date fixed for distribution. If upon any such liquidation, dissolution, bankruptcy or winding up of the Corporation the assets and surplus funds of the Corporation available for distribution to its shareholders shall be insufficient to pay the holders of the Series A Convertible Preferred Stock the full amounts to which they are entitled, the holders of the Series A Convertible Preferred Stock shall share ratably in the distribution of such assets and surplus funds in proportion to the full preferential amounts to which each such holder is otherwise entitled. (b) COMMON STOCK PREFERENCE. In the event payments provided for in subparagraph (a) above shall have been made, the holders of Common Stock shall be entitled to be paid out of the assets and surplus funds of the Corporation available for distribution to its shareholders Six Dollars ($6.00) per share plus declared and unpaid dividends thereon to the date fixed for the distribution. If, after payment shall have been made pursuant to subparagraph (a) above, the assets and surplus funds of the Corporation available for distribution to its shareholders shall be insufficient to pay the holders of Common Stock the full amounts to which they are each entitled, the holders of the Common Stock shall share ratably in the distribution of such assets and surplus funds in proportion to the full preferential amounts to which each such holder is otherwise entitled to receive. (c) ADDITIONAL DISTRIBUTIONS. In the event payments provided for in subparagraphs (a) and (b) above shall have been made, the holders of Preferred Stock and Common Stock shall be entitled to share PRO RATA on a per share basis (treating each share of Preferred Stock as if converted into one share of Common Stock) in all remaining assets and surplus funds of the Corporation available for distribution to its shareholders. (d) The merger or consolidation of the Corporation into or with another corporation or other entity or any other corporate reorganization in which the Corporation shall not be the continuing or surviving entity of such consolidation, merger or reorganization, the sale of all or substantially all the assets of the Corporation, or a transaction or series of related transactions by the Corporation in which in excess of fifty percent (50%) of the Corporation's voting power is transferred, shall be deemed to be a liquidation, dissolution or winding up of the Corporation. Section V. Conversion. The holders of the Series A Convertible Preferred Stock shall have conversion rights as follows (the "Conversion Rights"): (a) RIGHT TO CONVERT. Each share of Series A Convertible Preferred Stock shall be convertible, at the option of the holder thereof, except as hereunder provided, without payment of additional consideration, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such stock, into fully-paid and nonassessable shares of Common Stock. (b) CONVERSION RATIO. Each Series A Convertible Preferred Stock shall be convertible into one Share of Common Stock, ("Conversion Ratio"). The Conversion Ratio shall not be subject to adjustment. (c) AUTOMATIC CONVERSION. Each share of Series A Convertible Preferred Stock shall automatically be converted into one share of Common Stock on March 15, 2002, unless prior to such date the independent auditors of the Corporation certify to the Board of Directors that as of December 31, 2001 the Corporation had a Shareholders Equity of not less than Four Million ($4,000,000) Dollars. (d) MECHANICS OF CONVERSION. Before any holder of the Series A Convertible Preferred Stock shall be entitled to convert the same into full shares of Common Stock, he shall surrender the certificate or certificates therefore, duly endorsed, at the office of the Corporation or of any transfer agent for such stock, and shall give written notice to the Corporation at such office that he elects to convert the same. The Corporation shall, as soon as practicable thereafter, issue and deliver to such holder, at such office and in his name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock into which such converted shares of stock were convertible on the Conversion Date, as hereinafter defined. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of the Series A Convertible Preferred Stock (the "Conversion Date"). The person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of the Conversion Date. Section VI. Voting Rights. The holder of each share of Series A Convertible Preferred Stock, including any Parity Stock hereafter designated, shall have the right to one vote for each share of Common Stock into which such shares of Series A Convertible Preferred Stock could then be converted (with any fractional share determined on an aggregate conversion basis being rounded to the nearest whole share), and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any shareholders' meeting in accordance with the bylaws of the Corporation, and shall be entitled to vote, together with holders of Common Stock, with respect to any question upon which holders of Common Stock have the right to vote. IN WITNESS WHEREOF, the undersigned have executed this certificate as of the 14th day of December 2004. DHB INDUSTRIES, INC. By: /s/ DAVID H. BROOKS ___________________________ David H. Brooks, Chairman and CEO By: /s/ DAWN M. SCHLEGEL ___________________________ Dawn Schlegel, Secretary, Treasurer & Chief Financial Officer EX-4.2 5 stocksubsagree.txt STOCK SUBSCRIPTION AGREEMENT BETWEEN ... EXHIBIT 4.2 STOCK SUBSCRIPTION AGREEMENT DHB INDUSTRIES, INC. This Stock subscription Agreement ("Agreement") is made and entered into this 14th day of December, 2001 by and between DHB Industries, Inc. a Delaware Corporation having its principal place of business at 555 Westbury Avenue, Carle Place, New York 11554 ("DHB" or the "Company") and David H. Brooks ("Brooks") a principal Shareholder of DHB, residing at 20 Red Ground Road, Old Westbury, New York 11568. WHEREAS, DHB has applied for listing of its Common Stock for trading on the American Stock Exchange (the "Exchange"); WHEREAS, the Exchange requirements for listing include, inter alia, that DHB have minimum Shareholders Equity of not less than Four Million ($4,000,000) Dollars; WHEREAS, DHB expects that it meets the minimum Shareholders Equity requirement, and that such Equity will be reflected by its audited financial statements as of December 31, 2001; WHEREAS, DHB is indebted to Brooks to the extent of Ten Million Dollars ($10,000,000) constituting the remaining balance of a restated Promissory Note dated September 24, 2001, (the "Note"). WHEREAS, Brooks is willing to subscribe to new Equity Securities of DHB to the extent of Three Million ($3,000,000) of such Note amount. WHEREAS, Brooks has received information from the Company which describes the Company's offer to issue and sell shares of its no par value Series A Convertible 12% Redeemable Preferred Stock ("Preferred Stock") to him; WHEREAS, the terms and conditions of the Preferred Stock are set forth in the Certificate of Designations and Preferences attached hereto as Exhibit A (the "Certificate"); and WHEREAS, the Preferred Stock will be convertible under certain circumstances, into shares of the Company's $.001 value Common Stock ("Common Stock") on a one to one basis. AGREEMENT In consideration of the foregoing and the representations, warranties, conditions and covenants contained herein, the Company and Brooks hereby mutually agree with one another as follows: 1. SALE AND PURCHASE OF THE SERIES A SHARES. 1.1 On the basis of the representations, warranties and covenants contained herein, and subject to the terms and conditions of this Agreement, the Company agrees to issue and sell to Brooks, and Brooks agrees to purchase from the Company, 500,000 Shares of the Series A Preferred Stock for Three Million ($3,000,000) Dollars. 1.2 On the closing of the sale of the Series A Preferred Shares, Brooks will surrender the Note to the Company, and receive (i) a new Note dated the date of closing in the amount of Seven Million Dollars ($7,000,000); (ii) an interest payment on the Note amount from September 24, 2001 to the date of closing; and (iii) Five Hundred Thousand (500,000) Shares of Series A Preferred Stock. 1.3 The closing of the transactions required hereunder shall take place as promptly as practicable after the filing of the Certificate of Designations and Preferences with the Secretary of State, State of Delaware reflecting the designations and preferences of the Series A Preferred Stock, and in all events not later than December 31, 2001 unless the parties shall otherwise agree. 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents, warrants to Brooks, and agrees with Brooks as follows: 2.1 ORGANIZATION. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted and carry out the transactions contemplated hereunder. The Company is duly qualified to transact business and is in good standing in each jurisdiction of the United States in which the failure so to qualify would have a material adverse effect on its business or properties. 2.2 CAPITALIZATION. The authorized capital of the Company consists, or will consist to the First Closing, of: (a) Preferred Stock. 5,000,000 shares of par value $.001 Preferred Stock, 500,000 shares of which have been designated Series A Convertible Preferred Stock, none of which have been issued or are outstanding, prior to the transactions contemplated herein. The rights, preferences and privileges of the Preferred Stock are as set forth in the Amended and Restated Articles, Exhibit A hereto. (b) Common Stock. 100,000,000 shares of Common Stock,of which 31,396,947 shares are issued and outstanding. (c) All outstanding shares of Preferred Stock to be issued to Brooks will be, when issued, duly authorized and validly issued, are fully paid and nonassessable, and issued in compliance with all applicable federal and state securities laws. 2 (d) Except for the shares of Preferred Stock which will be issued pursuant to this Agreement, which shares will be convertible into 500,000 shares of Common Stock, there are no outstanding conversion rights, rights of first refusal, preemptive rights or other rights or agreements for the purchase or acquisition from the Company of any of the securities of the Company or rights thereto, and no outstanding options and warrants other than those which were outstanding as of the 30th day of September, 2001. 2.3 AUTHORIZATION. All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder including the issuance, sale and delivery of the Series A Shares and the reservation of the Common Stock issuable upon conversion of the Series A Shares (the "Conversion Shares") has been taken or will be taken prior to the Closing. Upon execution and delivery, this Agreement will be a valid and binding obligation of the Company, enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other laws of general application relating to or affecting enforcement of creditors' rights and by general equitable principles. 2.4 VALIDITY OF SECURITIES. The Series A Shares have been duly authorized and reserved, and upon issuance in accordance with the terms of this Agreement and the Amended and Restated Articles of Incorporation will be validly issued and outstanding, fully paid and nonassessable. The Common Conversion Shares have been duly authorized and reserved, and upon issuance in accordance with the terms of the Certificate, will be validly issued and outstanding, fully paid and nonassessable. 2.5 CONSENTS. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority or any third party on the part of the Company is required in connection with the valid execution and delivery of this Agreement, or the offer, sale or issuance of securities of the Company hereunder, except as has already been obtained, or as is required to be obtained as a condition to the Closing. 2.6 LITIGATION. To the best of the Company's knowledge, there is no action, suit, proceeding or investigation pending or overtly threatened against the Company which questions the validity of this Agreement or the right of the Company to enter into it, or to consummate the transactions contemplated hereby, or which might result, either individually or in the aggregate, in any material adverse changes in the assets, condition, affairs or prospects of the Company, financially or otherwise, nor is the Company aware that there is any basis for the foregoing. The Company is not subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which names the Company as a party. 3. REPRESENTATIONS AND WARRANTIES OF BROOKS. Brooks hereby represents and warrants to the Company that: 3 3.1 INVESTMENT REPRESENTATIONS. (1) He is experienced in evaluating and investing in securities. (2) He has first hand knowledge of the Company's business, management and financial affairs. (3) He understands that no federal or state agency has passed upon his investment in the Series A Shares or made any finding or determination as to the advisability or fairness of an investment by him in the Series A Shares. (4) He may be required to bear the economic risk of investment in the Series A Shares for an indefinite period of time because the Series A Shares and the Common Conversion Shares have not been registered under the Act and, therefore, cannot be sold unless they are either subsequently registered under the Act or an exemption from such registration is available. (5) He understands that, upon issuance of the Series A Shares, and any subsequent issuance of the Common Conversion Shares, the Company will place a stop-transfer order in its stock books and direct its transfer agent to place such an order in its books respecting transfer of such shares and that the certificates representing such shares shall bear the legends set forth in Section 3.3 hereinafter. (6) He is acquiring the Series A Shares for investment for his own account and not with the view to, or for resale in connection with, any distribution thereof. He understands that the Series A Shares and the Common Conversion Shares have not been registered under the Act by reason of a specified exemption from the registration provisions of the Act, which requires, among other things, the BONA FIDE nature of the Investor's investment intent as expressed herein. 3.2 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the representations set forth above, Brooks further agrees not to make any disposition of all or any portion of the Series A Shares or the Common Conversion Shares unless and until: (1) There is then in effect a Registration Statement under the Act covering such proposed disposition and such disposition is made in accordance with such Registration Statement; or (2) Brooks shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and counsel for the Company opines in writing to the Company, in form and substance reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Act. 4 3.3 LEGENDS. It is understood that the certificate(s) representing the Series A Shares and the certificate(s) representing the Common Conversion Shares may bear one or all of the following legend: "These securities have not been registered under the Securities Act of 1933. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required. Brooks hereby understands and agrees that the Company shall have no obligation to remove the legends set forth in this Section 3.3 unless and until the securities covered thereby have been registered or can be sold pursuant to Rule 144(k) promulgated under the Act. 4. MISCELLANEOUS. 4.1 SURVIVAL OF WARRANTIES. The warranties, representations and covenants of the parties contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the respective Closing. 4.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 4.3 GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the State of New York applicable to agreements between residents of such state entered into and to be performed entirely within such state. 4.4 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 4.5 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 4.6 NOTICES. Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified or telex, or seven (7) days after deposit with a domestic Post Office, by registered mail, postage prepaid and addressed to the party to be notified at the address indicated for such party herein, or at such other address as such party may designate by ten (10) days' advance written notice to the other party: 4.7 COUNSEL. The Company has employed legal counsel in connection with the preparation of this Agreement. Brooks has been advised of the advisability 5 to have the Agreement reviewed by counsel of his own choosing representing his independent interests in the transaction. 4.8 ENTIRE AGREEMENT; AMENDMENT. This is the entire Agreement of the parties with respect hereto, and the same may not be amended otherwise than by a writing signed by the parties to be changed. WHEREFORE, the parties hereto, have duly executed this Agreement as of the date first above written, each intending that it be and become their full and final agreement with respect hereto. DHB INDUSTRIES, INC. By: /s/ DAWN M. SCHLEGEL _______________________ Dawn M. Schlegel, Secretary, Treasurer & Chief Financial Officer By: /s/ DAVID H. BROOKS _______________________ David H. Brooks, Purchaser 6 EX-99.1 6 exhibit99-1.txt PRO FORMA FINANCIAL STATEMENTS AS OF ... PARITZ & COMPANY, P.A. DHB INDUSTRIES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS WITH ACCOUNTANTS' REVIEW REPORT SEPTEMBER 30, 2001 Board of Directors DHB Industries, Inc. and Subsidiaries We have reviewed to the pro forma adjustments reflecting the transactions described in Note 1 and the application of those adjustments to the historical amounts in the accompanying pro forma balance sheet of DHB Industries, Inc. and Subsidiaries as of September 30, 2001. These historical financial statements are derived from the historical unaudited financial statements of DHB Industries, Inc. and Subsidiaries which were reviewed by us. Such pro forma adjustments are based on management's representations as discussed in Note 1. Our review was conducted in accordance with standards established by the American Institute of Certified Public Accountants. All information contained in the accompanying financial statement is the representation of management of DHB Industries, Inc. and Subsidiaries. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is an expression of an opinion regarding the financial statement taken as a whole. Accordingly, we do not express such an opinion. The objective of this pro forma financial information is to show what the significant effects on the historical information might have had been had the transactions occurred at an earlier date. However, the pro forma financial statement is not necessarily indicative of the related effects on the financial position that would have been attained had the above mentioned transactions occurred at an earlier date. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statement in order for it to be in conformity with generally accepted accounting principles. January 24, 2002 Hackensack, New Jersey
DHB INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ============================================================================================================================ UNAUDITED PRO FORMA PRO FORMA SEPTEMBER 30, 2001 ADJUSTMENTS SEPTEMBER 30, 2001 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 191,869 $ 450,000 $ 641,869 Accounts receivable, less allowance - for doubtful accounts of $719,705 9,926,917 - 9,926,917 Inventories 21,518,141 - 21,518,141 Prepaid expenses and other current assets 1,583,345 2,033,345 ----------- ---------- ----------- TOTAL CURRENT ASSETS 33,220,272 450,000 33,670,272 ----------- ---------- ----------- PROPERTY AND EQUIPMENT, NET 1,902,395 450,000 1,902,395 ----------- ---------- ----------- OTHER ASSETS: Investments in non-marketable securities 941,750 - 941,750 Deferred tax assets 409,300 - 409,300 Deposits and other assets 297,809 - 297,809 ----------- ---------- ----------- TOTAL OTHER ASSETS 1,648,859 - 1,648,859 ----------- ---------- ----------- TOTAL ASSETS $36,771,526 $ 450,000 $37,221,526 =========== ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $13,684,746 $ - $13,684,746 Accrued expenses and other current liabilities 2,310,528 - 2,310,528 Current maturities of long-term debt 881,260 - 881,260 ----------- ---------- ----------- TOTAL CURRENT LIABILITIES 16,876,534 - 16,876,534 ----------- ---------- ----------- LONG-TERM LIABILITIES: Revolving credit agreement-financial institution 8,206,363 - 8,206,363 Long-term debt, net of current maturities 1,051,196 - 1,051,196 Note payable - stockholder 10,000,000 (3,000,000) 7,000,000 ----------- ---------- ----------- TOTAL LONG-TERM DEBT 19,257,559 (3,000,000) 16,257,559 ----------- ---------- ----------- TOTAL LIABILITIES 36,134,093 (3,000,000) 33,134,093 ----------- ---------- ----------- STOCKHOLDERS' EQUITY: Convertible Preferred Stock, $6.00 par value 5,000,000 shares authorized 500,000 shares issued and outstanding 3,000,000 3,000,000 Common stock, $.001 par value, 100,000,000 shares authorized. 31,396,947 shares issued and outstanding 31,397 150 31,547 Additional paid-in capital 23,769,036 449,850 24,218,886 Accumulated deficit (23,097,295) - (23,097,295) Other comprehensive income (65,705) - (65,705) ----------- ---------- ----------- TOTAL STOCKHOLDERS' EQUITY 637,433 3,450,000 4,087,433 ----------- ---------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $36,771,526 $ 450,000 $37,221,526 =========== ========== ===========
See accountants' review report DHB INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2001 (Unaudited) ================================================================================ 1. CONSOLIDATED FINANCIAL STATEMENTS The consolidated balance sheet has been derived from the unaudited consolidated balance sheet contained in the Company's Form 10-Q and is presented for comparative purposes. All amounts are subject to year-end adjustments and audit, but the Company believes all adjustments, consisting only of normal and recurring adjustments necessary to present fairly the financial condition for the interim period, have been made. Footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with published rules and regulations of the Securities and Exchange Commission. This consolidated financial statement should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Form 10-K for the most recent fiscal year. 2. PRO FORMA ADJUSTMENTS The accompanying pro forma financial statement gives effect to the following transactions as if they had occurred as of September 30, 2001. (1) Convertible Preferred Stock On December 14, 2001, the Company authorized the issuance of 500,000 shares of Convertible Preferred Stock to the Chairman of the Board and principal shareholder of the Company, at a price of $6 per share. Payment for these shares was received on January 14, 2002, by the reclassification of part of the stockholder's loan payable account. Annual cumulative dividends at a rate of 12% per annum, accruing from the date of issuance, are payable in cash. The Convertible Preferred Stock is redeemable by the Company on December 15, 2002 or any December 15th thereafter, unless such redemption shall result in the shareholders' equity of the Company falling below $5,000,000. (2) Warrants On December 11, 2001, an unrelated party exercised 150,000 warrants at $3 per share for the common stock of the Company. -----END PRIVACY-ENHANCED MESSAGE-----