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 11, 2006
Patient
Safety Technologies, Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or Other Jurisdiction
of
Incorporation)
|
333-124594
(Commission
File
Number)
|
13-3419202
(I.R.S.
Employer
Identification
Number)
|
1800
Century Park East, Ste. 200, Los Angeles, CA 90067
(Address
of principal executive offices) (zip code)
(310)
895-7750
(Registrant's
telephone number, including area code)
100
Wilshire Blvd., Ste. 1750, Santa Monica, CA 90401
(310)
752-1416
(Former
name or former address, if changed since last report)
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):
| 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)
|
| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item
1.01 Entry Into a Material Definitive Agreement.
Loan
From Ault Glazer Bodnar Acquisition Fund LLC
On
January 11, 2006, Ault Glazer Bodnar Acquisition Fund LLC (“AGB Acquisition
Fund”) loaned Patient Safety Technologies, Inc. (the “Company”) $150,000. As
consideration for the loan, the Company issued AGB Acquisition Fund a secured
promissory note in the principal amount of $150,000 (the “Secured Note”) and
entered into a security agreement granting AGB Acquisition Fund a security
interest in the Company’s personal property and fixtures, inventory, products
and proceeds as security for the Company’s obligations under the Secured
Note.
The
Secured Note accrues interest at the rate of 7% per annum, which together with
principal is due to be repaid on March 11, 2006. At the option of the Company,
payments of principal and interest may be paid by exchange of any securities
owned by the Company valued on the day before March 11, 2006.
Ault
Glazer Bodnar & Company, Inc. is the managing member of AGB Acquisition
Fund. The Company’s former Chairman and Chief Executive Officer, Milton “Todd”
Ault, III, is Chairman and Chief Executive Officer of Ault Glazer Bodnar &
Company, Inc. The Company’s Chief Financial Officer, William B. Horne, is also
Chief Financial Officer of Ault Glazer Bodnar & Company, Inc. The Company’s
President and Secretary, Lynne Silverstein, is Secretary and a director of
Ault
Glazer Bodnar & Company, Inc. Melanie Glazer, Manager of the Company’s
subsidiary Ault Glazer Bodnar Capital Properties, LLC, is also a director of
Ault Glazer Bodnar & Company, Inc. The Company’s management believes the
loan from AGB Acquisition Fund is on terms at least as favorable as could be
obtained from an unrelated third party.
Loan
From Steven Caspi
On
January 12, 2006, Steven J. Caspi (“Caspi”) loaned $1,000,000 to Automotive
Services Group, LLC (“ASG”), an Alabama limited liability company which is 50%
owned by the Company’s wholly owned subsidiary Ault Glazer Bodnar Merchant
Capital, Inc. (“AGB Merchant Capital”). As consideration for the loan, ASG
issued Caspi a promissory note in the principal amount of $1,000,000 (the “Caspi
Note”) and granted Caspi a mortgage on certain real estate owned by ASG and a
security interest on all personal property and fixtures located on such real
estate as security for the obligations under the Caspi Note. In addition, the
Company entered into an agreement guaranteeing ASG’s obligations pursuant to the
Caspi Note. The Caspi Note accrues interest at the rate of 10% per annum, which
together with principal is due to be repaid on March 13, 2006.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
See
Item
1.01 above.
Item
5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On
January 12, 2006, Richard Bertran was appointed President of the Company’s
wholly owned subsidiary SurgiCount Medical, Inc. (“SurgiCount”). From July 18,
2005 until January 12, 2005, Mr. Bertran was SurgiCount’s Executive Vice
President of Sales and Marketing. From September 2002 until July 2005, Mr.
Bertran was Director of North American Sales for eNGENUITY Technology, a company
in the visualization and simulation software industry. From 1988 to 1998, Mr.
Bertran served as Western Regional Sales Manager for Maxxim Medical, a company
that creates and packages custom surgical packs.
As
described in a Form 8-K filed by the Company on November 2, 2005, Mr. Bertran
is
employed by SurgiCount pursuant to an employment agreement entered into as
of
October 31, 2005 and effective as of July 18, 2005. Mr. Bertran’s annual base
compensation is $200,000. In addition, Mr. Bertran is entitled to receive:
(a)
options to purchase 200,000 shares of the Company’s common stock with a strike
price of $5.00 per share, which options will vest annually over three years;
and
(b) 10,000 restricted shares of the Company’s common stock as a signing bonus.
Mr. Bertran also may receive the following stock options upon accomplishing
milestones: (a) options to purchase 50,000 shares of the Company’s common stock
when SurgiCount reaches $5 million in sales; and (b) options to purchase 50,000
shares of the Company’s common stock when Mr. Bertran accomplishes certain other
unspecified milestones to be mutually agreed upon among Mr. Bertran,
SurgiCount’s Chief Executive Officer and Health West Marketing Incorporated, a
consultant to the Company. Mr. Bertran is also entitled to participate in all
of
SurgiCount’s employee benefit plans in effect from time to time. The employment
agreement has an initial term of three years and will automatically renew for
successive one-year periods unless sooner terminated. Mr. Bertran and SurgiCount
have the right to terminate Mr. Bertran’s employment agreement at any time
during the employment term for any reason. SurgiCount may also terminate the
employment agreement at any time for “cause” (as defined in the employment
agreement). If the employment agreement is voluntarily terminated by Mr. Bertran
or if SurgiCount terminates the agreement for cause, then all unvested stock
options and/or unearned milestone bonuses will be forfeited and all obligations
of the parties will end except SurgiCount must continue to reimburse Mr. Bertran
for reasonable out-of-pocket business expenses related to his employment with
SurgiCount, Mr. Bertan must continue to maintain the confidentiality of any
confidential information about SurgiCount and SurgiCount may be required to
indemnify Mr. Bertran for certain liabilities in connection with his employment.
If SurgiCount voluntarily terminates the employment agreement without cause,
then: (a) if the termination date is before 15 months after the effective date
of the employment agreement, SurgiCount must pay Mr. Bertran severance
compensation in cash equal to 15 months of base compensation, plus award the
milestone option grants to the extent the milestones are met within the
employment term; (b) if the termination date occurs within the final 15 months
of the initial term, SurgiCount must pay Mr. Bertran severance compensation
in
cash through the remaining initial term of the agreement; and (c) all unvested
stock options will become automatically vested.
Except
as
described above, there has been no transaction during the last two years, or
any
proposed transaction, to which the Company was or is to be a party, and in
which
Mr. Bertran had or is to have a direct or indirect material interest. There
are
no family relationships between Mr. Bertran and the Company’s directors,
executive officers or persons nominated or charged by the Company to become
directors or executive officers.
Item
9.01 Financial Statements and Exhibits.
(c)
Exhibits
|
Exhibit
Number
|
|
Description
|
|
4.1
|
|
Secured
Promissory Note in the principal amount of $150,000 issued January
11,
2006 to Ault Glazer Bodnar Acquisition Fund
|
|
4.2
|
|
Promissory
Note in the principal amount of $1,000,000 issued January 12, 2006
by
Automotive Services Group, LLC to Steven J. Caspi
|
|
10.1
|
|
Security
Agreement by and between Ault Glazer Bodnar Acquisition Fund and
Patient
Safety Technologies, Inc.
|
|
10.2
|
|
Real
Estate Mortgage dated January 12, 2006 in favor of Steven J.
Caspi
|
|
10.3
|
|
Continuing
Guaranty dated January 12, 2006 of Patient Safety Technologies in
connection with the $1,000,000 Promissory Note issued January 12,
2006 by
Automotive Services Group, LLC to Steven J. Caspi
|
|
10.4
|
|
Employment
Agreement dated October 31, 2005 between SurgiCount Medical, Inc.,
Patient
Safety Technologies, Inc. and Richard Bertran (Incorporated by reference
to the Company’s Form 8-K filed with the Securities and Exchange
Commission on November 2, 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.
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Patient
Safety Technologies, Inc. |
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| Dated:
January 17, 2006 |
By: |
/s/ Louis
Glazer, M.D. |
| |
Name:
Louis
Glazer, M.D., Ph.G. |
| |
Title:
Chief
Executive Officer |