-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JFmDB5x3la3DriQAz0JeaqZ9Y0/7OkOWni432I7hvoJ+oybAS/DuaVCwWaCm0GnL +GNr1J/YFI6DUCdkYBzLzw== 0001125282-02-001328.txt : 20020425 0001125282-02-001328.hdr.sgml : 20020425 ACCESSION NUMBER: 0001125282-02-001328 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20020425 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RAE SYSTEMS INC CENTRAL INDEX KEY: 0001084876 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 770588488 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-58813 FILM NUMBER: 02621330 BUSINESS ADDRESS: STREET 1: 1339 MOFFETT PARK DRIVE CITY: SUNNYVALE STATE: CA ZIP: 95112 BUSINESS PHONE: 408-752-0723 FORMER COMPANY: FORMER CONFORMED NAME: NETTAXI INC DATE OF NAME CHANGE: 19990422 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GARDNER MICHAEL CENTRAL INDEX KEY: 0001133352 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O BAYTREE CAPITAL ASSOCIATES INC STREET 2: 40 WALL ST SUITE 58 CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 2125041700 MAIL ADDRESS: STREET 1: C/O BAYTREE CAPITAL ASSOCIATES INC STREET 2: 40 WALL ST SUITE 58 CITY: NEW YORK STATE: NY ZIP: 10005 SC 13D 1 b317993_sc13d.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 RAE SYSTEMS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.01 Par Value Per Share --------------------------------------- (Title of Class of Securities) 75061P102 --------------------------------------- (CUSIP Number) Michael Gardner, c/o Baytree Capital Associates, LLC, 40 Wall Street, Suite 58, New York, NY 10005 (212) 509-1700 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 9, 2002 ------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. Check the following box if a fee is being paid with the statement [_]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7). CUSIP No. 75061P102 13D Page 1 of 3 Pages ________________________________________________________________________________ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Michael Gardner SS# ###-##-#### ________________________________________________________________________________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] ________________________________________________________________________________ 3 SEC USE ONLY ________________________________________________________________________________ 4 SOURCE OF FUNDS OO No funds were expended by the reporting person. ________________________________________________________________________________ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] Not Applicable ________________________________________________________________________________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States ________________________________________________________________________________ 7 SOLE VOTING POWER NUMBER OF 3,224,309 of 3,224,309 shares beneficially owned in the aggregate SHARES _________________________________________________________________ 8 SHARED VOTING POWER OWNED BY Not Applicable EACH _________________________________________________________________ REPORTING 9 SOLE DISPOSITIVE POWER PERSON 3,224,309 of 3,224,309 shares beneficially owned in the aggregate WITH _________________________________________________________________ 10 SHARED DISPOSITIVE POWER Not Applicable ________________________________________________________________________________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,224,309 shares ________________________________________________________________________________ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] ________________________________________________________________________________ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.2% ________________________________________________________________________________ 14 TYPE OF REPORTING PERSON IN ________________________________________________________________________________ Page 2 of 3 Pages Item 1. Security and Issuer. This statement on Schedule 13D (the "Statement") relates to the common stock, $0.01 par value per share of RAE Systems, Inc., a Delaware corporation, with its principal executive offices at 1339 Moffett Park Drive, Sunnyvale, CA 94089. Item 2. Identity and Background. This Statement is being filed by Michael Gardner, whose business address is 40 Wall Street, Suite 58, New York, NY 10005 c/o the Baytree Capital Associates, LLC. During the last five years Mr. Gardner has not (i) been convicted in a criminal proceeding or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or state securities laws or finding any violation with respect to such laws. Mr. Gardner is a citizen of the United States. Item 3. Source and Amount of Funds or Other Consideration. Mr. Gardner acquired all of his common stock of RAE Systems, Inc. listed in number 11 above pursuant to a merger transaction by which all of the outstanding shares of common stock of Nettaxi.com, Inc. were exchanged for shares of common stock of RAE Systems, Inc. Pursuant to the terms of such merger transaction, upon the effectiveness the merger, all of the outstanding options and warrants to purchase shares of common stock of Nettaxi.com, Inc. were converted into options and warrants to purchase shares of common stock of RAE Systems, Inc. The aforementioned merger transaction became effective on April 9, 2002. Mr. Gardner did not expend any personal funds to acquire the common stock of RAE Systems, Inc. listed in number 11 above. On April 9, 2002, Mr. Gardner acquired a warrant to purchase 1,750,000 shares of RAE Systems, Inc. common stock for $1.21 per share. The aforementioned warrants were granted in connection with services rendered by Mr. Gardner pursuant to a consulting agreement by and between Mr. Gardner and Nettaxi.com, Inc (see Item 6 below). Item 4. Purpose of Transaction. All RAE Systems, Inc. securities owned by Mr. Gardner have been acquired by Mr. Gardner for investment purposes only. Item 5. Interest in Securities of the Issuer. As of the Date of the Event which required the filing of this Statement, April 9, 2002, Mr. Gardner owned 1,222,139 shares of RAE Systems, Inc. common stock and the following warrants: a warrant to purchase 1,750,000 shares of RAE Systems, Inc. common stock, immediately exercisable, for a purchase price of $1.21 per share, a warrant to purchase 61,729 shares of RAE Systems, Inc. common stock, exercisable immediately, for a purchase price of $1.985 per share and a warrant to purchase 190,353 shares of RAE Systems, Inc. common stock, exercisable immediately, for a purchase price of $22.68 per share. The RAE Systems, Inc. securities owned by Mr. Gardner as of April 9, 2000 represented approximately 7.2% of the issued and outstanding shares of RAE Systems, Inc. common stock. 2 Page 3 of 3 Pages Mr. Gardner had sole power to vote and dispose of each of the 1,222,139 shares of RAE Systems, Inc. common stock beneficially owned by him and the sole power to dispose of the 2,002,170 warrants to purchase RAE Systems, Inc. common stock held in Mr. Gardner's name. In the sixty days prior to the date of this filing Mr. Gardner did not engaged in any transactions involving RAE Systems common stock. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. On August 1, 2002, Mr. Gardner amended a management consulting agreement he had entered into with Nettaxi.com, Inc. on October 30, 2000, whereby Mr. Gardner agreed to render consulting advice to Nettaxi.com, Inc. with respect to financial, corporate and general business development matters (the "Consulting Agreement"). In consideration for on-going services to be rendered by Mr. Gardner pursuant to the amended Consulting Agreement, RAE Systems, Inc. issued to Mr. Gardner a warrant to purchase 1,750,000 shares of RAE Systems, Inc. common stock at an exercise price of $1.21per share. Item 7. Material to be Filed as Exhibits. Attached hereto is Exhibit 1, the amended Consulting Agreement by and between Mr. Gardner and Nettaxi.com, Inc. dated August 1, 2001. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: April 23, 2002 --------------- Michael Gardner EX-1 3 b317993_ex1.txt EXHIBIT 1 BAYTREE CAPITAL ASSOCIATES, LLC MERCHANT BANKERS THE TRUMP BUILDING AT 40 WALL STREET NEW YORK, NEW YORK 10005 212/509-1700 - FACSIMILE 212/363-4231 August 1, 2001 Nettaxi. Com 2165 S. Bascom Avenue Campbell, California 95008 Attn: Mr. Robert Rositano, Jr. CEO Dear Mr. Rositano: This letter agreement (this "Agreement") confirms the terms and Conditions of the semi-exclusive engagement (as described below) of Baytree Capital Associates, LLC ("Baytree") by Nettaxi.com ("Nettaxi") and its affiliates to render certain financial advisory and investment banking services to Nettaxi and any person, corporation or other entity formed by or affiliated with such person (the "Company") which participates in, or which was formed for the purpose of effecting a Transaction (as hereinafter defined). In the context of this Agreement, "Transaction" shall mean, whether effected in one transaction or a series of transactions, any merger, consolidation, reorganization, recapitalization or other business combination pursuant to which the business of Nettaxi is combined with that of another entity (the "Merger Candidate"), whether or not Nettaxi is the surviving entity in such business combination. 1. SERVICES. Pursuant to the terms and conditions set forth in this Agreement, Baytree will assist Nettaxi in negotiating and effecting a Transaction. In this regard, Baytree proposes to undertake certain activities on behalf of Nettaxi including the following: (a) assist the Company in preparing the public entity for a potential merger Transaction, including assisting in the negotiation of satisfying of all current and contingent liabilities from the Company's assets; (b) use its best efforts to identify a Merger Candidate; (c) advise Nettaxi as to the structure and form of the Transaction; (d) assist Nettaxi in obtaining appropriate information and performing its due diligence regarding the Merger Candidate; (e) counsel Nettaxi with respect to, and conducting, negotiations with, the Merger Candidate regarding the Transaction; and (f) arranging for consummation of the Transaction. Any obligations pursuant to this Paragraph 1 shall survive the termination or expiration of this Agreement. 2. COMPENSATION; EXPENSES. It shall be the Company's obligation to bear all of its expenses in connection with the Transaction, which expenses shall include, but are not limited to the following: printing and duplication costs, postage and mailing expenses with respect to the transmission of offering materials, registrar and transfer agent fees, expenses related to a fairness opinion, expenses related to proxy solicitation, accounting fees and issue and transfer taxes, if any, and reasonable out of pocket expenses of Baytree including, but not limited to, its travel expenses, attorneys' fees and professional expenses. For its role pursuant to this Agreement, Baytree or its nominee shall receive compensation (i) in the amount of 5% of the total amount of the Transaction (the "Consideration," as defined below) up to $3,000,000 and 2% of the remaining amount of the Transaction, payable, at the election of Baytree, in cash or common stock of the Company at a purchase price equal to the average of the closing bid prices of the Company's common stock as quoted on the Over the Counter Bulletin Board for the fifteen (15) trading days immediately preceding June 1, 2001, calculated at $0.21 per share (the "Common Stock Valuation"); and (ii) a warrant exercisable to purchase up to 5% of the common stock of the Company at a purchase price equal to the Common Stock Valuation. Baytree shall be entitled to customary piggy-back and demand registration rights. For the purposes of this Agreement, "Consideration" shall mean the total market value on the day of the closing of stock, cash, assets and all other property (real or personal) exchanged or received, directly or indirectly by the Company or any of its security holders in connection with any Transaction. All consideration shall be deemed paid at the closing. Any obligation pursuant to this Paragraph 2 shall survive the termination or expiration of this Agreement. 3. EXCLUSIVITY. In consideration for the foregoing, Baytree will have the semi-exclusive right to present a Transaction to the Company's board of directors (the "Board") for a period of 90 days from the date of this Agreement. The Company may elect to proceed with a Transaction presented by another source, provided that the Board has approved the Transaction. In the event the Company elects to proceed with a Transaction presented by another source during the ninety (90) day period referenced above, Baytree shall be entitled to one-half of the compensation described in paragraph 2 above and shall provide those services outlined in sub-paragraphs 1(a) and 1(c) through (f). 4. REPRESENTATIONS, WARRANTIES, AND COVENANTS. (a) Nettaxi represents and warrants and shall cause the Company to so represent and warrant that this Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms. The Company further represents and warrants that consummation of the transactions contemplated herein will not conflict with or result in a breach of any of the terms, provisions or conditions of any written agreement to which it is a party. (b) Baytree represents and warrants that this Agreement has been duly authorized, executed and delivered by it and constitutes its valid and binding agreement enforceable against it in accordance with its terms. Baytree further represents and warrants that consummation of the transactions contemplated herein will not conflict with or result in a breach of any of the terms, provisions or conditions of any written agreement to which it is a party. (c) Nettaxi represents, warrants, and covenants that at the time of the Transaction contemplated herein there shall be no liens, encumbrances or security interest in any assets of Nettaxi (or any subsidiaries or affiliates) (except for existing liens and security interests), said unencumbered assets shall include but not be limited to the intellectual or proprietary property of Nettaxi which property shall include but not be limited to, any and all copyrights issued to, titled to, or claimed by Nettaxi. (c) Nettaxi represents that prior to completion of the Transaction, it shall have obtained audited financial statements covering the prior three (3) years of its operations, such financial statements shall have been prepared by an independent CPA firm licensed to practice before the SEC and which has completed its peer review process. Nettaxi acknowledges that the above condition shall be a condition precedent to Baytree performing its services under this Agreement. (d) Baytree represents and warrants that it has not been the subject of any enforcement proceedings by the Securities Exchange Commission ("SEC"), has not consented to any form of decree, or been sanctioned by the SEC or been found liable by any court or administrative agency of any Federal or State securities law violation. 5. TERM. Baytree agrees to attempt to fulfill its obligations under this Agreement within ninety (90) days from the date of this Agreement. In the event a bona fide term sheet is presented to the Board, the term is extended until the Board has acted upon it. If the Board has not elected to proceed with a Transaction, or if a term sheet for a proposed Transaction is not presented by Baytree to the Board, within such ninety (90) day time period (or extended time period), Nettaxi may terminate this Agreement and shall have no further obligations to Baytree under this Agreement other than the reimbursement of its expenses as described in paragraph 2. 6. INFORMATION. Nettaxi recognizes and confirms that in performing its obligations under this Agreement, Baytree and other persons who participate in the Investment will be using and relying on data, material, and other information (the "Information") or ("Offering Materials") furnished by Nettaxi and the Merger Candidate or their respective employees and representatives. In connection with Baytree's activities on Nettaxi's behalf, Nettaxi will cooperate with Baytree and will furnish Baytree with all information concerning Nettaxi, the Transaction and, to the extent available to Nettaxi, the Merger Candidate, which Baytree deems appropriate and will provide Baytree with access to Nettaxi's officers, directors, employees, independent accountants and legal counsel for the purpose of performing Baytree's obligations pursuant to this agreement. To the extent that Nettaxi has access to the officers, directors, employees, independent accountants and legal counsel of the Merger Candidate, it will provide such access to Baytree for the purpose of performing Baytree's obligations pursuant to this Agreement. Nettaxi hereby agrees and represents that all Information (a) furnished directly by Nettaxi to Baytree pursuant to this Agreement, and (b) contained in any filing by Nettaxi with any court or governmental or regulatory agency, commission or instrumentality (each, an "Agency") shall, at all times during the period of the engagement of Baytree hereunder, be accurate and complete in all material respects and that, if the Information provided by Nettaxi becomes materially inaccurate, incomplete or misleading during the term of Baytree's engagement hereunder, the Company shall so advise Baytree in writing. Accordingly, Baytree assumes no responsibility for the accuracy and completeness of the Information. In rendering its services hereunder, Baytree will be using and relying upon the Information without independent verification thereof or independent evaluation of any of the assets or liabilities of Nettaxi or the Merger Candidate. All Information that is not publicly available will be confidential and proprietary information belonging to Nettaxi and Baytree shall have no interest of any kind in such information by virtue of the Agreement. No information shall be revealed, or used (except in the performance of Baytree's duties under this Agreement) by Baytree unless legally compelled as determined in good faith by counsel to Baytree and with reasonable notice given to Nettaxi. 7. DISCLOSURE. Nettaxi agrees that, except as required by law, rule or regulation, it will not disclose and will cause the Company not to disclose the services or advice to be provided by Baytree under this Agreement publicly or to any third party without the prior written approval of Baytree. 8. GOVERNING LAW AND SEVERABILITY. This agreement shall be governed by the laws of the State of New York. If any provision of this Agreement shall be held or made invalid by a statute, rule, regulation, decision of a tribunal or otherwise, the remainder of this Agreement shall not be affected thereby and, to this extent, the provisions of this Agreement shall be deemed to be severable. 9. AUTHORIZATION. Nettaxi and Baytree represent and warrant that each has all requisite power and authority, and all necessary authorizations, to enter into and carry out the terms and provisions of this Agreement. 10. JURISDICTION. The parties shall agree that the Courts of the State of New York shall have jurisdiction with respect to any dispute, claim or controversy of whatever nature arising out of or relating to this Agreement. 11. SUCCESSORS. This Agreement and all rights, liabilities and obligations hereunder shall be binding upon and inure to the benefit of each party's successors but may not be assigned without the prior written approval of the other party. Any such approval shall not be unreasonably withheld. 12. HEADINGS. The descriptive headings of the Paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. 13. NO BROKERS. Nettaxi represents and warrants to Baytree that there are no brokers, representatives or other persons which have an interest in or claim for compensation due to Baytree from any transaction contemplated herein. 14. NOTICES. Any notice or other communication to be given to Nettaxi hereunder may be given by delivering the same in writing to the address set forth above, and any notice or other communication to be given to Baytree may be given by delivering the same to Baytree Capital Associates, LLC, 40 Wall Street, New York, New York 10005, Attention: Michael Gardner, Principal, or in each case, such other address of which a party shall have received notice. Any notice or other communication hereunder shall be deemed given three days after deposit in the mail if mailed by certified mail, return receipt requested, or on the day after deposit with an overnight courier service for next day delivery, or on the date personally delivered. 15. FINAL AGREEMENT. This Agreement constitutes the entire agreement among the parties and supersedes and replaces any agreement entered into between the parties prior to the date hereof, including but not limited to that certain letter agreement between the parties dated May 7, 2001. Please confirm that the foregoing correctly sets forth our agreement by signing the enclosed letters in the space provided and returning them to us for execution, whereupon we will send you a fully executed original letter which shall constitute a binding agreement as of the date first above written. Very truly yours, Baytree Capital Associates, LLC By: \s\Michael Gardner -------------------- Michael Gardner Agreed to and Accepted as of the above date NETTAXI.COM By: \s\ Robert Rositano, Jr. -------------------------- Robert Rositano Jr., CEO -----END PRIVACY-ENHANCED MESSAGE-----