SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K/A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act
November 17, 2006
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Date of Report
(Date of earliest event reported)
Reflect Scientific, Inc.
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(Exact name of registrant as specified in its charter)
UTAH 00031377 870642556
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
1270 South 1380 West
Orem, Utah 84058
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(Address of Principal Executive Offices)
(801-226-4100
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(Registrant's Telephone Number)
N/A
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(Former Name or Former Address if changed Since Last Report)
Check the appropriate box below if the Form 8K 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 14a12 under the Exchange Act
(17 CFR 240.14a12)
[ ] Precommencement communications pursuant to Rule 14d2(b) under the
Exchange Act (17 CFR 240.14d2(b))
[ ] Precommencement communications pursuant to Rule 13e4(c) under the
Exchange Act (17 CFR 240.13e4(c))
Item 1.01 Entry into a Material Definitive Agreement
(a) Effective as of November 17, 2006, the Registrant ("Reflect," the
"Company," "we," "our," "us" and words of similar import) entered into an
Agreement and Plan of Merger (the "Merger Agreement" and the "Merger") among
Reflect; Cryometrix, Inc., a California corporation and whollyowned subsidiary
of Reflect ("Merger Subsidiary"); All Temp Engineering Inc., a California
corporation ("All Temp"); J F Dain & E L Dain CO T Tee Dain Family Revocable
Trust U/A Dated 12/17/2001 (the "Dain Trust") and Nicholas J. Henneman
("Henneman"), the sole All Temp Shareholders (collectively, the "All Temp
Shareholders"); and John F. Dain, individually ("Dain"). Pursuant to the
Merger Agreement, on January 19, 2007, All Temp merged with and into the
Merger Subsidiary with the Merger Subsidiary being the surviving corporation.
A copy of the Agreement of Merger filed with the Secretary of State of the
State of California accompanies this Current Report and is incorporated herein
by reference. See Item 9.01, Exhibit 2.2.
Under the Merger Agreement, Reflect:
1. Issued to the All Temp Shareholders an aggregate of 2,000,000 shares
of its common stock that are "restricted securities" as defined in Rule 144,
1,000,000 shares to each, with no registration rights to have these securities
included in a registration statement filed with the Securities and Exchange
Commission.
2. Will pay the All Temp Shareholders a pro-rata running royalty
totaling 5.0% of the gross annual revenues earned after Closing (the
"Royalty") on All Temp's business that will be maintained as a separate
division within the Surviving Corporation (the "Royalty Business Segment").
The Royalty shall be paid so long as Reflect owns and operates the Royalty
Business Segment of All Temp and on revenues earned, providing it does not
result in the Royalty Business Segment earnings as measured by earnings before
interest and taxes ("EBIT") of less than 10%, and accordingly, such Royalty
shall be paid in accordance with Exhibit 1.3(c) to the Merger Agreement. The
foregoing royalty shall be paid quarterly within 45 days following the close
of each quarter and assumes the Royalty Business Segment of All Temp that will
be maintained separately within the Surviving Corporation ("Company Business
Division") is profitable as represented by the All Temp Shareholders.
Reflect shall maintain complete and accurate financial and other records
necessary to comply with Section 1.3(c) of the Merger Agreement. Reflect shall
submit written summary financial reports on a quarterly basis to the All Temp
Shareholders. The All Temp Shareholders shall have the right to, through
independent accountants of their own choosing and at their own expense, audit
the financial and other records of Reflect respecting the Company Business
Division at reasonable times, at least once per fiscal year, to determine
compliance with Section 1.3(c) of the Merger Agreement. In the event such
audit reveals that Reflect has not accurately or adequately complied with
Section 1.3(c) of the Merger Agreement, the costs of said audit shall be borne
by Reflect. Reflect shall provide Company Business Division with an adequate
operating budget reasonably required to allow the Company Business Division to
maximize revenues which operating budget shall be no less than as is
consistent with All Temp's historical operating budget. If, within three (3)
years of the closing, the Company Business Division is transferred (by means
of a sale of assets, merger, sale of stock or otherwise), the All Temp
Stockholders shall receive a cash payment of Six Hundred Thousand Dollars
($600,000) less any accumulated royalties payable under the Merger Agreement,
which will partially reimburse the All Temp Shareholders for loans they are
forgiving in connection with this transaction. However, no payment shall be
made if the Company Business Division is terminated or liquidated due to non
performance.
Reflect(s Board of Directors unanimously approved the Merger and related
agreements. During the course of its deliberations regarding the Merger, the
Board of Directors considered a number of factors relevant to the Merger, such
as All Temp(s business history, financial condition and intellectual property,
the terms of the Merger, and historical information concerning All Temp(s
business, financial performance and condition, operations, technology,
management and competitive position; and also considered a number of the
Company's key needs, including, but not limited to:
* Reflect(s desire to expand its services offerings, either through
internal development or by licensing or acquiring complimentary or new
technologies; and
* its desire to attract and retain talented technical personnel
to compliment these new developments or technologies.
Reflect(s Board of Directors also assessed the value of the Merger to its
shareholders in light of various factors and potential benefits of the Merger,
including:
* the current intrinsic value of the combined companies;
* strategic and financial advantages to the combined businesses that may
result from the Merger, such as potential improvements in their ability
to access financial markets and acquisition purposes;
* potential for future appreciation of Reflect(s common stock;
* potential risks associated with the Merger; and
* the longterm interests of Reflect and its shareholders;
* information concerning the business prospects and potential operations
and financial condition of Reflect and All Temp, both individually
and on a combined basis;
* the terms of the Merger Agreement, including that the Merger will likely
qualify as a tax free reorganization to Reflect for federal income
tax purposes;
* projected relative ownership interests of Reflect(s shareholders and
All Temp shareholders in Reflect immediately following the Merger;
* the likelihood that the Merger would be consummated; and
* Reflect(s desire to find an attractive candidate for a reorganization or
merger that would be beneficial to it and its shareholders and provide
products that current clients and customers would be interested in
purchasing, as well as others.
A copy of the Merger Agreement accompanied the Company's 8-K Current
Report dated November 17, 2006, which was filed on November 22, 2006; the
foregoing summary is modified in its entirety by such reference. See Item
9.01, Exhibit 2.1.
Item 2.01 Completion of Acquisition or Disposition of Assets.
(a) On January 19, 2007, All Temp merged with and into the Merger
Subsidiary with the Merger Subsidiary being the surviving corporation.
(b) Pursuant to the Merger Agreement, and as of January 4, 2007, All
Temp, with limited exceptions, transferred all of its Accounts Payables and
Accounts Receivables to Reflect, and Reflect assumed, with limited exceptions,
all such Accounts Payables and Accounts Receivables from that date forward.
Additionally, Reflect acquired certain assets of All Temp consisting of: (1)
Six heavy duty service trucks; (2) machinery and equipment consisting of sheet
metal fabrication tooling, calibration equipment and welding equipment; (3)
office equipment consisting of desk, chairs, files, conference facilities, fax
machines and copy machines; (4) computer equipment consisting of computer work
stations, laptop computers and servers; (5) software consisting of server
system software, manufacturing design software and Office Suite; and (6)
leasehold improvements consisting of build out for multiple workstations.
(c) See Item 1.01.
(d) See Item 1.01.
Item 7.01 Regulation FD Disclosure
See Exhibit 99.1, Press Release dated November 20, 2006, a copy of which
accompanied the Company's 8-K Current Report dated November 17, 2006, which
was filed on November 22, 2006.
See Exhibit 99.2, Press Release dated January 23, 2007, a copy of which
accompanies this Current Report and is incorporated herein by reference. See
Item 9.01, Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired:
These financial statements will be filed within seventy-five (75) days
of the date of Closing, or on or before April 4, 2007.
(b) Pro Forma Financial Information.
The pro forma financial statements will be filed within seventy-five
(75) days of the date of Closing, or on or before April 4, 2007.
(c) Registrant(s Exhibits:
Attached:
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2.2 Agreement of Merger filed with the State of California
99.2 Press Release dated January 23, 2007, regarding completion of
Agreement and Plan of Merger
Previously Filed:
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2.1 Agreement and Plan of Merger
99.1 Press Release dated November 20, 2006, regarding signing of
Agreement and Plan of Merger
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
REFLECT SCIENTIFIC, INC.
Date: January 23, 2007 /s/ Kim Boyce
Kim Boyce
President and Director