SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): November 14, 2001
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DYNATEC INTERNATIONAL, INC.
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(Exact name of registrant as specified in charter)
Utah 0-12806 87-0367267
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
P.O. Box 95943, 10424 S. 2700 W. South Jordan, UT 84095
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 973-9500
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3820 W. Great Lakes Dr., S.L.C., UT 84120
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(Former name or former address, if changed since last report.)
Item 3. Bankruptcy or Receivership
On November 14, 2001, Dynatec International, Inc. (the "Company"), and
two of its wholly owned subsidiaries, Softalk, Inc.("Softalk"), and Arnco
Marketing, Inc., ("Arnco"), filed voluntary petitions under Chapter 11 of the
United States Bankruptcy Code (the "Code") in the United States Bankruptcy Court
("Bankruptcy Court") for the Central District of Utah.
The Company's bankruptcy petition is intended to allow for the
reorganization of the Company's business and assets. The Bankruptcy Court
assumed jurisdiction over the Company's assets as of the date of the Company's
bankruptcy petition. The Company, as a debtor-in-possession, intends to remain
in possession of its assets and to continue to manage and operate its businesses
and properties, subject to the provisions of the Code and the supervision and
orders of the Bankruptcy Court, while seeking to formulate a plan of
reorganization.
There can be no assurance, however, that the Company will remain a
debtor-in-possession and that a trustee will not be appointed to operate the
Company's business. Furthermore, no assurance can be given that the Company will
retain control of its assets during the pendency of the bankruptcy case or that
the Bankruptcy Court will approve the plan of reorganization in the form
proposed by the Company. The Company's current business relationships and
arrangements and the Company's ability to negotiate future business arrangements
may be adversely affected by the filing of the bankruptcy petition by the
Company.
Item 5. Other Events
In order to avoid cessation of the Company's operations due to a lack
of capital, on September 17, 2001, the Company entered into a Distribution
Agreement (the "Softalk Distribution Agreement") with an unaffiliated third
party, Softalk LLC, a New York limited liability company ("Softalk LLC"). Under
the Distribution Agreement, Softalk LLC became the exclusive distributor of the
Company's Softalk telephone accessory product line, which includes, among other
products, the Company's Softalk telephone shoulder rest products, and the
Twisstop cord minder products. Softalk LLC is obligated to pay to the Company
amounts equal to the Company's cost of products plus 22% for products sold by
Softalk LLC, subject to certain adjustments as set forth in the Agreement.
Additionally, Softalk LLC began purchasing certain raw materials used in
connection with the manufacture of the Company's telephone accessory product
line, which raw materials have been used and will continue to be used by the
Company in manufacturing its products since the date of the Distribution
Agreement.
The Company covenanted in the Distribution Agreement to transfer
responsibility for manufacturing the Company's products to Softalk LLC. Between
October 1 and November 15, 2001, the Company moved the equipment and inventory
associated with the Softalk business to a facility procured by Softalk LLC
located in New York. Softalk LLC presently is in the process of re-assembling
the manufacturing equipment and will commence manufacturing operations as soon
as possible.
The Company intends to enter into similar distribution agreements with
entities affiliated with Softalk LLC (but not affiliated with the Company) that
will transfer substantially all of the responsibility for manufacturing and
selling the Company's flashlight product line currently marketed through its
Nordic Technologies, Inc. subsidiary, and the telephone headset and amplifier
product line currently operated through the Company's Softalk Communications,
Inc. subsidiary. Those distribution agreements have not been finalized and there
can be no assurance that such agreements ever will be finalized.
In connection with the Company's appointment of Softalk LLC as its
exclusive distributor and manufacturing agent, the Company has relocated its
headquarters from its former combination warehouse and executive office facility
located at 3820 Great Lakes Drive, Salt Lake City, Utah, to an office suite at
10424 S. 2700 W. South Jordan, Utah 84095. The Company was able to negotiate the
termination of its prior lease, which had a remaining term of approximately 18
years and required monthly rent of $27,500. The new office space is comprised of
902 square feet of office space and will require monthly rent payments of
$1,000. The Company will conduct no manufacturing operations at its new
facilities, but will continue administrative and limited marketing operations.
The new offices are owned by and leased from one of the Company's directors,
Reed Newbold. The Company believes that the terms of the lease are at least as
favorable to the Company as could have been obtained from an unaffiliated third
party.
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.
Dated: November 27, 2001
DYNATEC INTERNATIONAL, INC.
By: /s/ Frederick W. Volcansek, Sr.
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Frederick W. Volcansek, Sr.
Chairman and Chief Executive Officer