UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 25, 2005
PATIENT SAFETY TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 811-05103 13-3419202
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification Number)
100 Wilshire Blvd., Ste. 1500, Santa Monica, CA 90401
(Address of principal executive offices) (zip code)
(310) 752-1416
(Registrant's telephone number, including area code)
Copies to:
Marc J. Ross, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
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):
[ ] 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))
EXPLANATORY NOTE: This amended current report on Form 8-K/A is being filed to
clarify that, as reported under Item 2.01 hereof, the Registrant's acquisition
of SurgiCount Medical, Inc. was an asset acquisition. The Registrant deleted the
disclosure that it intends to file an amendment to the current report on Form
8-K to include the financial statements for SurgiCount Medical, Inc., since
parts (a) and (b) of Item 9.01 are not applicable.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
As described in its current report on Form 8-K filed with the
Securities and Exchange Commission (the "SEC") on November 9, 2004, Franklin
Capital Corporation (n/k/a Patient Safety Technologies, Inc.) ("Franklin")
entered into a Subscription Agreement with several accredited investors relating
to the sale and issuance by Franklin of shares of its common stock (the
"Shares") and five-year warrants (the "Warrants") to purchase additional shares
of its common stock (the "Warrant Shares") in one or more closings of a private
placement (the "Private Placement") exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the
Subscription Agreement, Franklin agreed to register for resale all of the Shares
and Warrant Shares issuable upon exercise of the Warrants sold and issued to
investors in connection with the Private Placement within 90 days of the initial
closing of the Private Placement. Likewise, Franklin and the investors agreed
that, in the event that Franklin did not file a registration statement for the
Shares and Warrant Shares issuable upon exercise of the Warrants sold and issued
to investors in connection with the Private Placement within 120 days of the
initial closing of the Private Placement, Franklin would be obligated to pay
each investor, as liquidated damages, cash in the amount of 1% of the aggregate
purchase price paid by such investor in connection with the Private Placement
for each month until the registration statement is filed.
On March 2, 2005, Franklin and certain investors holding a majority of
the Shares and Warrant Shares issuable upon exercise of the Warrants sold and
issued to investors in connection with the Private Placement (the "Amending
Investors") entered into an amendment to the Subscription Agreement to extend
the deadlines relating to Franklin's obligations to file the registration
statement and to pay liquidated damages in the event of a failure to file the
registration statement. Pursuant to the amendment, Franklin is now obligated to
file the registration statement within 180 days of the initial closing of the
Private Placement and to begin paying liquidated damages to the investors in the
amount set forth above in the event that the registration statement is not filed
within 180 days of the initial closing of the Private Placement.
Other than in respect of the Subscription Agreement and the amendment
to the Subscription Agreement described under this Item 1.01, no material
relationship exists between, on the one hand, Franklin and its affiliates,
directors or officers (or any associate of any of Franklin's directors or
officers) and, on the other hand, the Amending Investors.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
As described in Franklin's current report on Form 8-K filed with the
SEC on February 9, 2005, Franklin entered into an Agreement and Plan of Merger
and Reorganization, dated as of February 3, 2005 (the "Merger Agreement"), with
SurgiCount Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Franklin (the "Merger Subsidiary"), SurgiCount Medical, Inc., a
California corporation ("SurgiCount"), and Brian Stewart and Dr. William
Stewart, the holders of 100% of the outstanding capital stock of SurgiCount
(collectively, the "Shareholders").
On February 25, 2005, Franklin completed the acquisition of SurgiCount
(the "Merger") pursuant to the terms of the Merger Agreement. SurgiCount was not
engaged in a business, but was used to hold certain assets. The assets acquired
by Franklin in connection with the Merger consist primarily of intellectual
property rights, including one U.S. patent and one European patent, relating to
SurgiCount's Safety-Sponge(TM) System for faster and more accurate counting of
surgical sponges. The consideration paid to the Shareholders in connection with
the Merger consisted of $340,000 in cash and 190,000 shares of Franklin's common
stock (the "Common Stock"). In addition, in the event that prior to the fifth
anniversary of the closing of the Merger the cumulative gross revenues of
SurgiCount exceed $500,000, the Shareholders are entitled to receive an
additional 16,667 shares (for a total of 216,667 shares) of Common Stock.
Likewise, in the event that prior to the fifth anniversary of the closing of the
Merger the cumulative gross revenues of SurgiCount exceed $1,000,000, the
Shareholders will be entitled to receive an additional 16,667 shares (for a
total of 233,334 shares) of Common Stock.
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An additional 10,000 shares of Common Stock otherwise issuable to the
Shareholders pursuant to the Merger Agreement were deposited into an escrow
account to be held for a period of six months following the completion of the
Merger to secure certain rights to indemnification from the Shareholders based
on breaches or inaccuracies of the representations and warranties made by the
Shareholders in connection with the Merger.
Other than in respect of the Merger, no material relationship exists
between, on the one hand, Franklin and its affiliates, directors or officers (or
any associate of any of Franklin's directors or officers) and, on the other
hand, the Shareholders.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
As described above, on February 25, 2005, in connection with the
completion of the Merger pursuant to the Merger Agreement, Franklin sold and
issued to the Shareholders an aggregate of 190,000 shares of Common Stock. An
additional 10,000 shares of Common Stock otherwise issuable to the Shareholders
pursuant to the Merger Agreement were deposited into an escrow account to be
held for a period of six months following the completion of the Merger to secure
certain rights to indemnification from the Shareholders based on breaches or
inaccuracies of the representations and warranties made by the Shareholders in
connection with the Merger.
In addition, in the event that, prior to the fifth anniversary of the
closing of the Merger, the cumulative gross revenues of SurgiCount exceed
$500,000, the Shareholders are entitled to receive an additional 16,667 shares
(for a total of 216,667 shares) of Common Stock. Likewise, in the event that,
prior to the fifth anniversary of the closing of the Merger, the cumulative
gross revenues of SurgiCount exceed $1,000,000, the Shareholders will be
entitled to receive an additional 16,667 shares (for a total of 233,334 shares)
of Common Stock.
The foregoing issuances were made in reliance upon the exemption
provided in Section 4(2) of the Securities Act and the safe harbor of Rule 506
under Regulation D promulgated under the Securities Act. No form of general
solicitation or general advertising was conducted in connection with the Private
Placement. Each of the certificates representing shares of Common Stock sold and
issued in connection with the Merger contains a restrictive legend preventing
the sale, transfer or other disposition of such shares, unless registered under
the Securities Act, and each Shareholder was informed by Franklin of these
restrictions prior to the issuance of the shares.
ITEM 7.01 REGULATION FD DISCLOSURE
On March 2, 2005, Franklin issued a press release announcing the
completion of the Merger. A copy of that press release is being furnished as
Exhibit 99.1 to this current report on Form 8-K.
The information in this Item 7.01 of this current report on Form 8-K,
together with the information in Exhibit 99.1, is being furnished and 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 liabilities of that Section.
Such information shall not be deemed incorporated by reference into any
registration statement or other document filed with the SEC.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits
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EXHIBIT
NUMBER DESCRIPTION
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99.1 Press release issued on March 2, 2005 (Incorporated by reference to
Form 8-K, filed with the Securities and Exchange Commission on March
3, 2005)
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
PATIENT SAFETY TECHNOLOGIES, INC.
Dated: May 12, 2005 By: /s/ Milton "Todd" Ault, III
----------------------------
Name: Milton "Todd" Ault, III
Title: Chief Executive Officer
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