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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): February 14, 2001
LITHIUM TECHNOLOGY CORPORATION
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 1-10446 13-3411148
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State or Other Jurisdiction Commission IRS Employer
of Incorporation or Organization File Number Identification No.
5115 Campus Drive, Plymouth Meeting, PA 19462
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Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (610) 940-6090
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Former name or former address, if changed since last report:
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Item 5. Other Events.
On February 14, 2001, Lithium Technology Corporation ("LTC")
issued a press release updating the LTC stockholders on the status of
the pending merger with Ilion Technology Corporation, formerly Pacific
Lithium Limited (PLL). LTC reported that on October 2, 2000, PLL
domesticated into the U.S. as a private Delaware corporation and
changed its name to Ilion Technology Corporation (Ilion). LTC further
reported that the anticipated initial public offering and NASDAQ
listing of Ilion ("Ilion IPO") previously targeted for the fourth
quarter of 2000 was postponed due to market conditions and other
factors, and is expected to be undertaken as soon as practicable.
LTC went on to report that, as stated in LTC's September 30, 2000 Form
10-QSB filing with the Securities and Exchange Commission (the "SEC"),
a meeting of LTC shareholders to approve the merger will be held after
the Ilion IPO, and LTC expects that the merger with Ilion will be
closed within 90 days of the Ilion IPO.
LTC further reported that under the original terms of the Merger
Agreement, all outstanding shares of LTC stock would be exchanged for a
minimum of 3.5 million and a maximum of approximately 4.1 million
shares of Ilion stock depending upon the number of LTC warrants and
options exercised prior to the merger. To facilitate moving forward
with the Ilion IPO, and in turn to facilitate the closing of the
merger, Ilion and LTC determined that it was necessary to restructure
the merger transaction from a variable price arrangement to a fixed
price arrangement. Accordingly, LTC and Ilion entered into Amendment
No. 4 to the Merger Agreement on February 2, 2001.
LTC further noted that the following provisions of Amendment No. 4 to
the Merger Agreement will become effective only if and when Ilion files
a Registration Statement with the SEC relating to the Ilion IPO (the
"Registration Statement") and such provisions may be terminated by LTC
or Ilion by giving written notice to the other, if the IPO Registration
Statement has not been declared effective by the SEC on or before July
31, 2001, and upon any such termination the Merger Agreement shall be
restored to the same terms and conditions as if such provisions of
Amendment No. 4 had never become effective.
Merger Agreement Provisions if Amendment No. 4 is in Effect
Amendment No. 4 provides that in the merger LTC will merge with and
into Ilion and all of the outstanding shares of LTC's common stock will
be exchanged for an aggregate of the number of shares of Ilion common
stock determined by dividing $25 million by the Ilion Common Price (as
hereinafter defined), but in no event more than 5,000,000 shares or
less than 2,500,000 shares of Ilion Common (the "Merger Securities").
The term "Ilion Common Price" means the average of the daily closing
prices of Ilion Common as reported by the NASDAQ market during the
period of the thirty consecutive trading days on which Ilion's share
price is quoted on the NASDAQ market ending on the date of the second
to last trading day prior to the Closing Date of the merger. The Merger
Securities
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will be issued to LTC stockholders on a pro-rata basis.
Amendment No. 4 provides that in the event that any holder of LTC
warrants or options exercises any warrants or options prior to the
Merger, LTC will use all proceeds thereof (the "Exercise Funds") as
follows: (a) first, to pay a portion of the advances made by Ilion to
LTC pursuant to the Bridge Loan Financing Agreement in an aggregate
amount up to three hundred fifty thousand dollars ($350,000); (b)
second, to pay certain liabilities of LTC with respect to the accrued
salary due and owing to Mr. Thomsen, LTC's former Chairman and Chief
Executive Officer, in the aggregate amount of two hundred thousand
dollars ($200,000); and (c) third, to pay LTC's employee, operating and
administrative expenses, excluding capital costs ("LTC's Continuing
Costs").
Amendment No. 4 provides that from and after the Closing under the
Merger Agreement, the Merger Securities will be held in an escrow
established jointly by LTC and Ilion under the terms of which the
holders of the Merger Securities pursuant to the Merger Agreement will
not be permitted to sell or offer to sell or otherwise dispose of any
shares of common stock of Ilion without the prior written consent of a
designated IPO underwriter until the earlier of (1) the date of
termination of the offer, sale and disposition lock-up period which is
applied by the IPO underwriters to a majority of the Ilion shareholders
or (2) the date which is 180 days after the closing of the IPO.
Original Merger Agreement Provisions to be Restored if Amendment No. 4
is not in Effect
If LTC or Ilion were to restore the provisions contained in Amendment
No. 4 to their terms as if Amendment No. 4 had never become effective,
the following provisions would apply in lieu of those set forth in
Amendment No. 4:
In the Merger, LTC will merge with and into Ilion and all of the
outstanding shares of LTC's common stock will be exchanged for an
aggregate of 3.5 million shares of Ilion, subject to possible increase
of up to 625,028 additional shares of Ilion common stock under certain
circumstances relating to the number of LTC options and warrants
exercised prior to the Merger (the "Merger Securities"). The Merger
Securities will be issued to LTC stockholders on a pro-rata basis.
In the event that any holder of LTC warrants or options exercises any
warrants or options prior to the merger, LTC will use all proceeds
thereof (the "Exercise Funds") as follows: (1) the first three hundred
fifty thousand dollars ($350,000) will be used by LTC to finance the
operations of LTC in lieu of obtaining financing under the Bridge Loan
Financing Agreements and (2) the second two hundred thousand dollars
($200,000) will be used by LTC to pay a portion of the accrued salary
due and owing to Mr. Thomas Thomsen, LTC's former Chairman and Chief
Executive Officer. Any Exercise Funds in excess of the foregoing five
hundred fifty thousand dollars ($550,000) (the "Excess Exercise Funds")
will be used by LTC to pay LTC's Continuing Costs directly by LTC. To
the extent LTC pays its Continuing Costs through the Excess Exercise
Funds rather than through Bridge Loan Financing funds the Merger
Securities to be distributed to LTC
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stockholders in the Merger shall be increased on the following basis:
one share of Ilion Common Stock will be added to the 3,500,000 Merger
Securities for every $2.25 of Excess Exercise Funds received by LTC
(the "Additional Merger Securities").
There are no lock-up provisions contained in the Merger Agreement prior
to Amendment No. 4.
Item 7. Exhibits.
2.7 Amendment No. 4 to Agreement and Plan of Merger dated February 2, 2001
between LTC and Ilion Technology Corporation.
99.5 Press Release, dated February 14, 2001.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LITHIUM TECHNOLOGY CORPORATION
By: /s/ David J. Cade
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David J. Cade
Chairman and Chief Executive Officer
Date: February 14, 2001