-----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, C1mEGHNZ6YXpzAPmvRIHCWtLBTzTgcCqrR+6G6RHmoPxflPbKsXfKMrRSG4fngdC IDhF+2C16dR7oPigTDPV7A== 0001157523-02-001029.txt : 20020913 0001157523-02-001029.hdr.sgml : 20020913 20020913161559 ACCESSION NUMBER: 0001157523-02-001029 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020913 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020913 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEVEL 8 SYSTEMS INC CENTRAL INDEX KEY: 0000945384 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 112920559 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26392 FILM NUMBER: 02763893 BUSINESS ADDRESS: STREET 1: 8000 REGENCY PARKWAY CITY: CARY STATE: NC ZIP: 27511 BUSINESS PHONE: 2122441234 MAIL ADDRESS: STREET 1: 8000 REGENCY PARKWAY CITY: CARY STATE: NC ZIP: 27511 FORMER COMPANY: FORMER CONFORMED NAME: ACROSS DATA SYSTEMS INC DATE OF NAME CHANGE: 19950517 8-K 1 a4249635.txt LEVEL 8 8-K FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): September 13, 2002 (September 5, 2002) ------------------------------------- Level 8 Systems, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 000-26392 11-2920559 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 8000 Regency Parkway, Cary, North Carolina 27511 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (919) 380-5000 ------------------------------ Not Applicable -------------- (Former name or former address, if changed since last report.) 1 Item 5. Other Events The Nasdaq Stock Market, Inc. ("Nasdaq") has notified Level 8 Systems, Inc. (the "Company") that it is not in compliance with the stockholders' equity requirement for continued listing on the Nasdaq National Market. For continued listing on the National Market, the Company must meet either the $10,000,000 stockholders' equity requirement, or, until November 1, 2002, have $4,000,000 in net tangible assets. As of June 30, 2002, the Company reported stockholders' equity and net tangible assets of $1,611,000. Consequently, Nasdaq notified the Company that it has failed to maintain the stockholder's equity continued listing requirement for the National Market, and that it would commence procedures to delist the Company's securities from the Nasdaq National Market unless the Company could provide a plan to regain compliance with the stockholder's equity requirement. On September 5, 2002, because the Company did not believe that it could meet the National Market stockholders' equity requirement in the short term, the Company applied for transfer to the Nasdaq SmallCap Market. The application to transfer to the SmallCap Market will allow the Company to continue to be listed on the National Market until a final determination regarding this application has been made by Nasdaq. The stockholders' equity requirement for continued listing on the SmallCap Market is $2,500,000. The Company believes that it qualifies for listing on the SmallCap Market in part as a result of the closing of the sale of Series C Preferred Stock on August 14, 2002. The attached pro forma balance sheet shows the effect of the Series C Preferred Stock sale as if it had taken place on July 31, 2002. If Nasdaq does not accept the Company's transfer application, delisting procedures will commence and the Company may appeal Nasdaq's determination. Accordingly, delisting from the National Market may occur in mid- to late October if the Company's SmallCap application is rejected and it is unable to successfully appeal Nasdaq's decision to delist. Additionally, on September 11, 2002, Nasdaq notified the Company that some of the provisions of its Series A2 Preferred Stock and related warrants and Series B2 Preferred Stock and related warrants, issued on August 29, 2002, may not be in compliance with certain qualitative listing standards of the Nasdaq Marketplace Rules. If Nasdaq accepts the Company's application to transfer to the SmallCap Market, the Company will receive the benefit of the SmallCap Market's 180-day period to regain compliance with the minimum bid price requirement of $1.00. If, at any time before January 13, 2003, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive trading days, the Company will regain compliance with the continued listing requirements. If the Company is unable to cure the minimum bid price deficiency or if its falls below the $2,500,000 stockholders' equity continued listing standard, it may be delisted from the Nasdaq SmallCap Market. If the Company is delisted from the National Market and/or the SmallCap Market, the Company's common stock may be eligible for trading on the OTC Bulletin Board or on other over-the-counter markets, although there can be no assurance that the Company's common stock will be eligible for trading on any alternative exchanges or markets. Among other consequences, moving from the Nasdaq National or SmallCap Markets, or delisting from the Nasdaq National or SmallCap Markets, may cause a decline in the stock price, reduced liquidity in the trading market for the common stock, and difficulty in obtaining future financing. Furthermore, a failure to be listed on the Nasdaq National Market or the SmallCap Market will obligate the Company to make certain cash payments to the holders of its Series A2 Preferred Stock and Series B2 Preferred Stock. 2 Item 7. Financial Statements and Exhibits Exhibit No. Description 99.1 Pro Forma Balance Sheet as of July 31, 2002 (filed herewith). 3 SIGNATURE 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. Date: September 13, 2002 LEVEL 8 SYSTEMS, INC. By: /s/ John P. Broderick --------------------------------------------- John P. Broderick Chief Financial and Operating Officer, Corporate Secretary 4 Exhibit Index Exhibit No. Description 99.1 Pro Forma Balance Sheet as of July 31, 2002 (filed herewith). 5 Exhibit 99.1
Level 8 Systems, Inc Pro Forma Balance Sheet as of July 31, 2002 As Reported Pro Forma (Unaudited) Adjustment Adjusted ASSETS Cash and cash equivalents 149,050 1,280,000(a) 1,429,050 Trade accounts receivable, net 999,313 999,313 Receivable from related party 265,228 265,228 Notes receivable 513,926 513,926 Prepaid expenses 817,280 817,280 Bank note guarantee 161,458 161,458 Other current assets 560,142 560,142 --------------------- ----------------- Total current assets 3,466,397 4,746,397 Property and equipment, net 655,158 655,158 Intangible assets, net - - Software product technology, net 10,211,315 10,211,315 Other assets 281,255 281,255 --------------------- ----------------- Total assets 14,614,126 15,894,126 ===================== ================= LIABILITIES & STOCKHOLDERS' EQUITY Short term debt 421,465 (150,000)(b) 271,465 Accounts payable 3,101,167 (60,000)(c) 3,041,167 Accrued expenses: Salaries, wages, and related items 601,971 601,971 Accrued restructuring 1,179,520 1,179,520 Merger related 1,778 1,778 Other 4,012,794 4,012,794 Due to related party - - --------------------- ----------------- Total current liabilities 10,688,721 10,478,721 Long-term debt, net of current maturities 2,700,000 (100,000)(d) 2,600,000 Warranty liability 296,000 296,000 Stockholders' equity Common stock 19,007 19,007 Preferred stock - Series A1 12 12 Preferred stock - Series B1 30 30 Preferred stock - Series C - 2(e) 2 Additional paid-in capital 200,577,301 1,589,999(f) 202,167,300 Accumulated other comprehensive loss (969,556) (969,556) Accumulated deficit (198,697,389) (198,697,389) --------------------- ----------------- Stockholders equity 929,363 2,519,363 --------------------- ----------------- Total liabilities and stockholders' equity 14,614,126 15,894,126 ===================== =================
(a) $1.28m cash received August, 2002 (b) $150k short term debt converted to equity (c) $60k accounts payable converted to equity (d) Less $100k cash received July,2002 (e) Series "C" Preferred shares (f) Funding received for Series "C" Preferred shares 6 -----END PRIVACY-ENHANCED MESSAGE-----