Item
1.01. Entry into a Material Definitive Agreement
On
January 19, 2007, EarthShell Corporation (the “Company”) filed a voluntary
petition for relief under Chapter 11 of the U.S. Bankruptcy Code (the “Code”) in
the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).
Also on that date, the Company has entered into a definitive Asset Purchase
Agreement (the “Agreement”) with EarthShell Acquisition Corp. (the “Purchaser”),
a newly formed Delaware corporation owned and controlled by affiliates of
our
licensee, Renewable Products, Inc. (“RPI”), to sell substantially all of the
Company’s assets for approximately $1.0 million, subject to certain offsets and
adjustments, including but not limited to the amounts advanced to the Company
under debtor-in-possession (“DIP”) financing arrangements to be filed with the
Bankruptcy Court for Court approval. The Company intends to file the Agreement
with the Bankruptcy Court shortly. The Agreement, and the consummation of
the
sale of assets and other transactions contemplated thereby, is subject to
proposed bidding procedures and a potential auction of the assets pursuant
to
Section 363 of the U.S. Bankruptcy Code and pursuant to bidding procedures
that
must be approved by the Bankruptcy Court. The Company and the Purchaser intend
to file a motion with the Bankruptcy Court shortly that will request that
the
Bankruptcy Court enter an order establishing bidding procedures (the “Bidding
Procedures Order”). The Bidding Procedures Order will provide that the Purchaser
is the “stalking horse” for substantially all the assets at the auction. The
Agreement calls for the payment of a break up fee to the Purchaser of $300,000
in certain circumstances if a sale to another purchaser is consummated.
The
Company entered into the Agreement after exhaustive, but unsuccessful, efforts
to secure commitments for additional funding, either interim or long term,
to
sustain its operations. As previously reported, the Company has exhausted
its
cash resources, and therefore is not able to pay its obligation to its secured
creditor or meet other on-going obligations. The Company determined that
the
best course of action in order to maximize the value to its stakeholders
was to
file for protection under the Bankruptcy Code and to seek an orderly liquidation
of its assets via an auction process supervised by the Bankruptcy Court.
In
order
to participate in the auction process, one which is intended to result in
the
availability of more favorable bids from other interested parties, each
potential bidder must be “qualified” and submit a bid in the manner and by the
date and time established by the Bankruptcy Court in the Bidding Procedures
Order. The Company and the Purchaser intend to file a motion with the
Bankruptcy Court to establish bidding procedures, including the auction date
in
the event there are multiple qualified bids. The Company intends to file
the
definitive Bidding Procedures Order as an exhibit to a report on Form
8-K.
Consummation
of the transaction contemplated by the Agreement is subject to higher and
better
offers, approval of the Bankruptcy Court and customary closing
conditions.
Item
1.02. Termination of a Material Definitive Agreement
By
a
letter dated January 8, 2007, RPI and the Company terminated that certain
Agreement and Plan of Merger, dated as of June 17, 2005 and amended as of
February 17, 2006, among the Company, EarthShell Triangle, Inc., RPI and
ReNewable Products, LLC.
Item
1.03. Bankruptcy or Receivership
On
January 19, 2007, EarthShell Corporation filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court
for
the District of Delaware (case no 07-10086). The filing was made as part
of, and
to facilitate the consummation of, the transactions contemplated by the
Agreement (described above under Item 1.01 of this Report, which description
is
incorporated by reference herein).
Item
2.04. Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
On
December 30, 2005, the Company entered into a financing transaction with
Cornell
Capital Partners (“Cornell”) and issued a Secured Convertible Debenture, (the
“Debenture”) and that certain Registration Rights Agreement (“RRA”), of even
date with the Debenture (the Debenture, RRA and all other agreements, contacts,
instruments or other items delivered in connection with the Debenture are
collectively referred to as the “Transaction Documents”). The Company previously
reported an event of default under the financing agreements with Cornell.
Under
the terms of the Debenture and other Transaction Documents, the announcement
that the Company is unable to pay its obligations as they become due constitutes
another event of default under the financing agreements with Cornell.
Item
5.02. Departure of Directors or Principal Officers; Appointment of Principal
Officers
In
connection with the bankruptcy filing and to minimize expenditures to conform
to
the limited resources available to it through the DIP financing that has
been
provided by RPI, the Company has reduced its paid staff to one full time
employee, Mr. William E. Mooney, who as been appointed to serve as acting
Chief
Operating Officer.
Item
9.01. Financial Statements and Exhibits
(c)
Exhibits.
| 2.1 |
Asset
Purchase Agreement by and among EarthShell Corporation and EarthShell
Acquisition Corp dated as of January 19,
2007.
|
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.
| |
|
|
| |
EARTHSHELL
CORPORATION |
| |
(Registrant) |
|
|
|
| Date:
January 22, 2007 |
By: |
/s/ D.
Scott
Houston |
| |
Name:
D. Scott Houston |
| |
Title:
Chief Financial Officer |