SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act
April 4, 2006
-------------
Date of Report
(Date of earliest event reported)
Reflect Scientific, Inc.
------------------------
(Exact name of registrant as specified in its charter)
UTAH 000-31377 87-0642556
----- --------- ----------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
970 Terra Bella Avenue
Mountain View, California 94043
-------------------------------
(Address of Principal Executive Offices)
(650) 960-0300
--------------
(Registrant's Telephone Number)
N/A
---
(Former Name or Former Address if changed Since Last Report)
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 14-a-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))
Item 1.01 Entry into a Material Definitive Agreement
(a) Effective as of April 4, 2006, the Registrant ("Reflect," the
"Company," "we," "our," "us" and words of similar import) entered into a
Purchase Agreement (the "Agreement") among Reflect, JM SciTech, LLC, a limited
liability company organized under the laws of the State of Colorado, and doing
business as JMST Systems ("JMST"); David Carver, an individual ("Carver"); and
Julie Martin, an individual ("Martin")(JMST, Carver and Martin are sometimes
hereinafter referred to collectively as "Sellers"). Pursuant to the
Agreement, Reflect purchased and JMST sold all right, title and interest in
and to the JMST Technology (the "JMST Technology"), as described in the
Agreement; and Carver conveyed and assigned any rights he had in and to
certain patents (the "Carver Patents") and related intellectual assets as
described in the Agreement ("collectively, including the Carver Patents,
referred to herein as the "Carver Technology").
The following are the principal terms of the Agreement:
1. As consideration for the JMST Technology, Reflect will issue Two
Hundred Thousand (200,000) shares of its common stock that are "restricted
securities" as defined in Rule 144 of the Securities and Exchange Commission.
None of these shares were accorded registration rights of any kind.
2. As consideration for the Carver Technology, Reflect has paid to
Carver the sum of Two Hundred Fifty Thousand Dollars ($250,000.00).
3. Certain royalty payments, as outlined in the Agreement, will be
paid based on gross annual revenue derived from the Carver Technology and will
be payable in equivalent shares of Reflect common stock that are "restricted
securities" until a maximum of Five Hundred Thousand (500,000) shares has been
paid. Such shares of common stock will be valued at $3.00 per share for all
purposes of paying these royalty payments. None of these shares were accorded
registration rights of any kind.
4. Certain new products will also be subject to royalty payments in a
similar manner as stated in paragraph 3 above. None of these shares were
accorded registration rights of any kind.
In late March, 2006, Reflect offered and sold 400,000 shares of its
common stock that are "restricted securities" as defined in Rule 144 to
"accredited investors" only, to finance this acquisition. These shares were
sold at a price of $0.80 per share for total aggregate proceeds of $320,000.
The offering was completed and closed on or about March 27, 2006. None of
these shares were accorded registration rights of any kind.
As of the closing of the Agreement, and including our currently
outstanding shares and the issuance of the 400,000 shares to investors in the
private offering outlined above, there are or will be on issuance, 26,130,002
post-Agreement outstanding shares of Reflect common stock.
A copy of the Agreement, including all material exhibits and related
instruments, accompanies this Current Report, which, by this reference, is
incorporated herein; the foregoing summary is modified in its entirety by such
reference. See Item 9.01, Exhibit 2.1.
As a part of the execution and delivery of the Agreement, Reflect and
Carver executed a Consultant Agreement (the "Consultant Agreement") pursuant
to which Carver agreed to provide the services and complete the work described
in the Consultant Agreement for a monthly basic fees of $8,000 until
completion of the services provided therein or until otherwise terminated as
described in the Consultant Agreement. Carver also agreed that certain
"Confidential Information" as defined therein is proprietary to the Company
and shall remain the sole property of the Company. A copy of the Consultant
Agreement, including all material exhibits and related instruments,
accompanies this Current Report, which, by this reference, is incorporated
herein; the foregoing summary is modified in its entirety by such reference.
See Item 9.01, Exhibit D to Exhibit 2.1.
Additionally, as part of the execution and delivery of the Agreement,
Carver executed an Assignment Agreement regarding the assignment of certain
patents as described therein (the "Patent Assignment") to the Company. A copy
of the Patent Assignment, including all material exhibits and related
instruments, accompanies this Current Report, which, by this reference, is
incorporated herein; the foregoing summary is modified in its entirety by such
reference. See Item 9.01, Exhibit 2.2.
Also, as part of the execution and delivery of the Agreement, Reflect
and Martin executed a Letter Agreement (the "Letter Agreement") pursuant to
which the Company agreed to provide limited cash assistance for future lease
payments at the JMST business offices in Colorado Springs, Colorado. The
Company has agreed to pay to Martin a maximum of $3,000 per month for a
maximum of three (3) consecutive months during which time Martin and JMST will
use their best efforts to identify and engage a sublessee to assume the lease
and lease obligations of Martin and JMST. A copy of the Letter Agreement,
including all material exhibits and related instruments, accompanies this
Current Report, which, by this reference, is incorporated herein; the
foregoing summary is modified in its entirety by such reference. See Item
9.01, Exhibit 2.3.
Item 2.01 Completion of Acquisition or Disposition of Assets.
(a) See Item 1.01 above.
(b) The Company acquired all right, title and interest in and to the
JMST Technology and the Carver Technology (including the Carver
Patents) as described in the Agreement.
(c) The JMST Technology was transferred and assigned by JMST; and the
Carver Technology (including the Carver Patents) was transferred
and assigned by Carver.
(d) The consideration for the JMST Technology will be the issuance
to the Members of JMST of a total of 200,000 shares of Reflect
common stock that are "restricted securities" as defined in Rule
144 of the Securities and Exchange Commission; and the
consideration paid for the Carver Technology (including the Carver
Patents) was $250,000.
Item 7.01 Regulation FD Disclosure
See the Press Release, Exhibit 99.1, that was disseminated on April 5,
2006, which, by this reference, in incorporated herein. See Item 9.01.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
No Financial Statements of JMST are required.
(b) Pro Forma Financial Information.
No Financial Statements of JMST are required.
(c)(I) Registrant's Exhibits:
Attached:
---------
2.1 Purchase Agreement
Exhibit A Technology
Exhibit B Consent of Directors of Reflect
Exhibit C Action by Members of JM SciTech, LLC
Exhibit D Carver Consultant Agreement
2.2 Assignment Agreement
2.3 Letter Agreement
99.1 Press Release
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.
REFLECT SCIENTIFIC, INC.
Date: 04/04/2006 /s/Kim Boyce
---------- ------------------------
Kim Boyce
President and Director