================================================================================
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 5, 2004
AROTECH CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23336 95-4302784
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
632 BROADWAY, SUITE 1200, NEW YORK, NEW YORK 10012
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (646) 654-2107
(Former name or former address, if changed since last report)
================================================================================
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
On February 4, 2004, we entered into an agreement settling the
litigation brought against us in the Tel-Aviv, Israel district court by I.E.S.
Electronics Industries, Ltd. ("IES Electronics") and certain of its affiliates
in connection with our purchase of the assets of our IES Interactive Training,
Inc. from IES Electronics in August 2002. The litigation had sought monetary
damages in the amount of approximately $3 million.
Pursuant to the terms of the settlement agreement, in addition to
agreeing to dismiss their lawsuit with prejudice, IES Electronics agreed (i) to
cancel our $450,000 debt to them that had been due on December 31, 2003, and
(ii) to transfer to us title to certain certificates of deposit in the
approximate principal amount of $112,000. The parties also agreed to exchange
mutual releases. A summary of the settlement agreement is attached hereto as
Exhibit 99.1 hereto, and incorporated herein by reference. The above description
of the terms of the Agreement and of this transaction is qualified in its
entirety by reference to Exhibit 99.1.
In consideration of the foregoing, we are issuing to IES Electronics
(i) 450,000 shares of our common stock, and (ii) five-year warrants to purchase
up to an additional 450,000 shares of our common stock at a purchase price of
$1.91 per share. The last reported sale price for our common stock on February
4, 2004 as quoted on the Nasdaq National Market was $1.70 per share. Based on
the closing price of our stock on the date of the agreement, and without placing
a value on the warrant (the exercise price of which was above such closing
price), the expense of this settlement to us was approximately $200,000, which
we estimated to have been the approximate costs of the legal fees to defend this
action.
These securities were issued under a prospectus supplement dated
February 5, 2004 and filed with the SEC on that same date. The opinion of
Lowenstein Sandler PC filed as Exhibit 5.1 herewith relates to the validity of
the shares of Common Stock to be issued by us pursuant to the prospectus
supplement.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, we note that certain statements set forth in this
Current Report on Form 8-K may constitute forward-looking statements, as defined
in the Private Securities Litigation Reform Act of 1995. These statements are
subject to various risks and uncertainties that may cause actual results to vary
significantly. These risks and uncertainties include, but are not limited to,
risks relating to: product and technology development; the uncertainty of the
market for our products; changing economic conditions; delay, cancellation or
non-renewal, in whole or in part, of contracts or of purchase orders;
significant future capital requirements; and other risk factors detailed in our
most recent annual report on Form 10-K for the fiscal year ended December 31,
2002, as amended, our most recent Quarterly Report on Form 10-Q, and other
filings with the Securities and Exchange Commission. Readers should consider all
of these risk factors as well as other information contained in this report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits - The following documents are filed as exhibits to this
report:
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.1 Common Stock Purchase Warrant issued to I.E.S. Electronics
Industries, Ltd.
5.1 Legal Opinion of Lowenstein Sandler PC
99.1 Settlement Agreement with I.E.S. Electronics Industries, Ltd.
dated February 4, 2004 [ENGLISH SUMMARY OF THE HEBREW
ORIGINAL]
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.
AROTECH CORPORATION
(REGISTRANT)
By: /s/ Robert S. Ehrlich
-------------------------
Name: Robert S. Ehrlich
Title: Chairman, President and CEO
Dated: February 5, 2004
3
EXHIBIT INDEX
The following exhibits are filed with the Current Report on Form 8-K.
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.1 Common Stock Purchase Warrant issued to I.E.S. Electronics
Industries, Ltd.
5.1 Legal Opinion of Lowenstein Sandler PC
99.1 Settlement Agreement with I.E.S. Electronics Industries, Ltd.
dated February 4, 2004 [ENGLISH SUMMARY OF THE HEBREW
ORIGINAL]