8K -- 2006-03-30 -- Q4 and YE 2005 earnings, warrant shares issuance, warrant
repricing and reload, and Nasdaq delisting notice and appeal
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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 Exchange Act of
1934
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Date
of Report (Date of earliest event reported):
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March
27, 2006
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AROTECH
CORPORATION
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(Exact
name of registrant as specified in its
charter)
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Delaware
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0-23336
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95-4302784
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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1229
Oak Valley Drive, Ann Arbor, Michigan
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48108
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
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(800)
281-0356
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354
Industry Drive, Auburn, Alabama 36830
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(Former
name or former address, if changed since last
report)
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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:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Potential
persons who are to respond to the collection of
information
contained in this form are not required to respond
unless
the form displays a currently valid OMB control
number.
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Item 1.01 Entry
into a Material Definitive Agreement.
Pursuant
to the terms of Amendment Agreements dated March 27, 2006 and March 28, 2006,
Arotech Corporation (the “Company”) and certain of its existing warrant holders
(“Investors”) agreed to amend certain of the Investors’ existing warrants
(consisting of 415,200 warrants to purchase common stock at a price of $2.20
per
share, 797,872 warrants to purchase common stock at a price of $1.88 per share,
274,748 warrants to purchase common stock at a price of $1.45 per share, 125,000
warrants to purchase common stock at a price of $1.4375 per share, and 2,502,658
warrants to purchase common stock at a price of $1.38 per share - a total of
4,115,478 warrants) to provide for an exercise price equal to $0.40, in exchange
for (i) immediate exercise by the Investors of all such warrants, with the
exercise price being deposited in a collateral account to secure the Company’s
obligation to repay its 8% secured convertible debentures due in September
2006,
and (ii) the issuance to the Investors of a total of 1,646,192 warrants,
expiring on March 31, 2008, with an exercise price equal to $0.594 per
share.
The
foregoing description of the Amendment Agreements and the warrants issued
pursuant thereto is qualified in its entirety by reference to the agreements
and
instruments themselves, the forms of which are attached to this report as
Exhibits 4.1 and 4.2 hereto and are incorporated herein by
reference.
Item
2.02 Results
of Operations and Financial Condition.
On
March
30, 2006, Arotech Corporation (the “Registrant”) publicly disseminated an
earnings release (the “Release”) announcing our financial results for the year
and quarter ended December 31, 2005. A copy of the Release is attached as
Exhibit 99.1 hereto.
The
information included in the attached Exhibit 99.1 is being furnished pursuant
to
Item 2.02 of Form 8-K, insofar as it discloses historical information regarding
the Registrant’s results of operations and financial condition as of and for the
year and quarter ended December 31, 2005. In accordance with General
Instructions B.2 of Form 8-K, the information in this Current Report on Form
8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of
Section
18
of the Securities Exchange Act of 1934, as amended, or otherwise subject to
the
liability of that section, nor shall it be deemed incorporated by reference
in
any filing under the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such a filing.
Item
3.01 Notice
of Delisting or Failure to Satisfy a Continued Listing Rule or Standard;
Transfer of Listing.
On
March
28, 2006, we received a
Nasdaq
Staff Determination indicating that we were not in compliance with the minimum
bid price requirement for continued listing set forth in Marketplace
Rule 4450(a) and that our securities are, therefore, subject to delisting
from the Nasdaq National Market at the opening of business on April 6, 2006.
The
letter also stated that we may request a review of the Staff Determination
to a
Nasdaq Listing Qualifications Panel.
We
have
requested a review of the Staff Determination by a Nasdaq Listing Qualifications
Panel. Although there can be no assurance that the Panel will grant our request
for continued listing, the request for review will stay the delisting of our
stock from the Nasdaq National Market pending the Panel’s decision. In the event
the Panel does not grant our request for continued listing, we would apply
to
transfer our common stock to the Nasdaq Capital Market. We
currently
satisfy the relevant requirements for initial inclusion on such market as set
forth in Marketplace Rule 4310(c). If an application to transfer to the Nasdaq
Capital Market were approved, we would have until September 22, 2006 to
demonstrate compliance with the $1.00 minimum bid continued listing requirements
of the Nasdaq Capital Market.
On
March
30, 2006, we announced the above by press release, a copy of which is attached
hereto as Exhibit 99.1.
Item
3.02 Unregistered
Sales of Equity Securities.
1. Pursuant
to the terms of our senior secured notes due March 31, 2008 (the “Notes”), we
are obligated to repay the principal amount of the Notes over the term of the
Notes, with the principal amount being amortized in twelve payments payable
at
our option in cash and/or by requiring the conversion of a portion of the Notes
into shares of our common stock, provided certain conditions are
met.
In
this
connection, we elected on March 1, 2006 to make the second payment of
$1,458,333.34, which is due on March 31, 2006, by requiring the conversion
of a
portion of the Notes into shares of our common stock. Pursuant to the terms
of
the Notes, the
price
used to determine the number of shares to be issued upon such conversion will
be
calculated using an 8% discount to the average trading price of our common
stock
during 17 of the 20 consecutive trading days ending two days before the
installment
payment
date. This calculation resulted in a volume weighted average price of $0.44,
which after application of the 8% discount resulted in a discounted price of
$0.4048 per share (a total of 3,602,604 shares of our common stock after
rounding).
The
Notes
further provide that within two trading days after we send notice of an election
to convert a portion of the Notes into shares of our common stock, we must
issue
to the holders of our Notes a number of shares of
our
common stock equal to the quotient of (x) the amount of the Note being paid
in
stock, divided by (y) the conversion price of $1.00 per share, rounded up to
the
nearest whole share of common stock. Accordingly, on March 1, 2005, we issued
an
aggregate of 1,458,335 shares of our common stock to the holders of the Notes.
The
remaining shares issuable upon such conversion were required to be issued by
the
installment payment date of March 31, 2006. Accordingly, on March 31, 2006,
we
issued an aggregate of 2,144,269
additional shares of our common stock to the holders of the Notes. Subsequent
to
this issuance and the issuance referred to in Item 1.01 above, we had
101,750,593
shares
of common stock issued and out-standing.
We
issued
the above securities in reliance on the exemption from registration provided
by
Section 4(2) of the Securities Act as transactions by an issuer not involving
a
public offering. The issuance of these securities was without the use of an
underwriter.
2. Item
1.01
above is hereby incorporated by reference into this Item 3.02.
We
issued
the above securities in reliance on the exemption from registration provided
by
Section 4(2) of the Securities Act as transactions by an issuer not involving
a
public offering. The issuance of these securities was without the use of an
underwriter.
Item
9.01 Financial
Statements and Exhibits.
As
described above, the following Exhibits are furnished as part of this Current
Report on Form 8-K:
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Exhibit
Number
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Description
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4.1
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Form
of Amendment Agreement between the Company and various investors
dated
March 27, 2006 and March 28, 2006
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4.2
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Form
of Warrant
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99.1
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Press
release dated March 30, 2005
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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.
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AROTECH
CORPORATION
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(Registrant)
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By:
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/s/
Robert S. Ehrlich
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Name:
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Robert
S. Ehrlich
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Title:
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Chairman
and CEO
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Dated: March
30,
2006