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
Date of earliest event reported: December 20, 1996
Able Telcom Holding Corp.
(Exact name of registrant as specified in charter)
Florida 0-21986 65-0013218
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
1601 Forum Place, Suite 1110, West Palm Beach, Florida 33401
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (561) 688-0400
Item 5. Other Events.
On December 20, 1996, in a private placement transaction (the "Private
Placement") exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933, as amended (the "Act"), the Registrant sold to each of Credit
Suisse First Boston Corporation and Silverton International Fund Limited
(collectively, the "Purchasers") 500 shares (the "Series A Preferred Shares") of
its Series A Preferred Stock, par value $.10 per share, and issued to each
purchaser a contingent warrant (the "Warrant") to purchase 100,000 shares of the
Registrant's common stock, par value $.001 per share ("Common Stock"). The
Purchasers each paid the Registrant $3,000,000 for the Series A Preferred Shares
and the Warrant. The Private Placement was effected pursuant to a Series A
Preferred Stock Agreement by and among the Purchasers and the Registrant dated
December 20, 1996 (the "Agreement"). Pursuant to the Agreement, so long as the
Series A Preferred Shares are issued and outstanding, if the Registrant conducts
a private offering of any equity securities, each of the Purchasers that holds
Series A Preferred Shares has a right of first refusal to purchase all of such
equity securities for cash at an amount equal to the price for which such
securities are proposed to be sold. The Warrants are exercisable one year from
the effective date of the Private Placement provided that the Series A Preferred
Stock is not converted to Common Stock prior to the first anniversary of the
Private Placement.
In connection with the Agreement, on December 20, 1996, the Registrant
filed Articles of Amendment (the "Articles") to its Articles of Incorporation
designating the Series A Preferred Stock. Pursuant to the Articles, cumulative
dividends on the Series A Preferred Shares accrue at an annual rate of 5% of the
"Liquidation Preference" (as defined below) and are payable quarterly in arrears
in cash or through a dividend of additional shares of Series A Preferred Stock,
at the option of the Registrant. In the event of a liquidation, dissolution or
winding up of the Registrant, the holders of Series A Preferred Stock are
entitled to receive a preferential distribution of the assets of the Registrant
equal to $6,000.00 per share of Series A Preferred Stock (the "Liquidation
Preference").
Holders of Series A Preferred Stock have the right to convert their shares
at any time after April 30, 1997 into shares of Common Stock ("Conversion
Shares"). The number of Conversion Shares is to be determined by dividing the
Liquidation Preference per share by the lesser of (i) $9.82 (the "Fixed
Conversion Price") or (ii) by application of an applicable percentage discount
(ranging from 10% to 20% depending on the date of the conversion notice) to the
average closing bid price of a share of Common Stock for the three trading days
immediately preceding the date of the conversion notice (the "Floating
Conversion Price"). The lesser of the Fixed Conversion Price or the Floating
Conversion Price is hereinafter referred to as the "Conversion Factor."
Upon the occurrence of certain enumerated events in the Articles (a
"Redemption Event"), holders of shares of Series A Preferred Stock have the
right to sell such holder's shares of Series A Preferred Stock to the Registrant
at a price equal to the Liquidation Preference (plus any accrued and unpaid
dividends or distributions thereon) for each share being redeemed plus the
product of the number of shares of Common Stock into which such shares are then
convertible multiplied by an amount equal to the difference between (i) the
average closing bid price of Common Stock for the three trading days immediately
following the date of the redemption notice and (ii) the Conversion Factor.
At any time after December 20, 1997 and provided that there exists an
effective registration statement covering the Conversion Shares, the Registrant
has the right to redeem all of the outstanding shares of Series A Preferred
Stock at a purchase price equal to the Liquidation Preference (plus any accrued
and unpaid dividends or distributions thereon) if the closing bid price of the
Common Stock for each of five consecutive trading days prior to the date of the
redemption notice is at or greater than 150% of the Fixed Conversion Price (as
adjusted pursuant to the Articles). The Registrant also has a right to redeem
shares of Series A Preferred Stock, if the closing bid price of Common Stock is
less than $4.50 per share for five consecutive trading days and the Registrant
receives a conversion notice within three days thereafter, at a price equal to
the difference between (i) the average closing bid price of Common Stock for the
three trading days immediately following the date of the redemption notice and
(ii) the Conversion Factor.
Provided that the purchasers have not converted the Series A Preferred
Stock to Common Stock, the Warrants are exercisable after December 20, 1997 at a
purchase price per share equal to $9.82; provided, however, if there does not
exist an effective registration statement covering the shares issuable upon the
exercise of the Warrants, the Purchasers may exercise the Warrant in whole or in
part in exchange for the number of shares of Common Stock equal to the product
of (i) the number of shares as to which the Warrant is being exercised
multiplied by (ii) a fraction, the
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numerator of which is the "Market Price" (as defined in the Warrant) less $9.82,
and the denominator of which is the Market Price. The number of shares issuable
upon exercise of the Warrant will be reduced by 200 for each share of Series A
Preferred Stock that such holder was issued in connection with the Private
Placement that is converted into Common Stock prior to the first anniversary of
the Private Placement. If the Registrant delivers a redemption notice with
respect to the Series A Preferred Stock, the Registrant shall also deliver
notice to the holders of the Warrants stating that such holders have ninety (90)
days to exercise the Warrant at a purchase price equal to $9.82 per share, or
the Registrant will redeem the Warrant with respect to any shares of Common
Stock issuable upon exercise of the Warrant ("Warrant Stock") not so converted,
at a price equal to $.01 per underlying share of Warrant Stock. The Registrant
may then redeem the Warrant with respect to any portion thereof that has not
been converted into shares of Warrant Stock.
In connection with the sale of the Series A Preferred Shares, the
Purchasers and the Registrant entered into a Registration Rights Agreement dated
December 20, 1996. Pursuant to the Registration Rights Agreement, the Registrant
has agreed to file a registration statement with the Securities and Exchange
Commission (the "Commission") relating to (i) the Conversion Shares and (ii)
shares of Common Stock issuable upon exercise of the Warrants (collectively, the
"Registrable Shares"), and has agreed to use its best efforts to cause such
registration statement to be declared effective by the Commission on or before
ninety days after the date on which the Registrant files its Form 10-K (but in
no event later than May 14, 1997). If the registration statement is not
effective by such date, the Company has agreed to pay to the Investors the
aggregate sum of $4,000 per day until the earlier to occur of (i) the effective
date of the registration statement or (ii) the sixtieth day following date. The
failure by the Company to register the Conversation Shares pursuant to an
effective registration statement by the later of 150 from the date that the
Company files its Annual Report on Form 10-K or July 14, 1996 constitutes a
Redemption Event. If any time after April 1, 1997 (i) the Company does not have
an effective registration statement covering the Registrable Shares, (ii) the
Purchasers have exercised their rights in the event of a Redemption Event and,
(iii) within fifteen days of such exercise the Company has not delivered the
redemption price, then holders of at least fifty-one percent of the aggregate
amount of Series A Preferred Shares, Registrable Shares and Warrants not yet
registered and sold have the right to make one demand to register the
Registrable Shares. In addition, the holders of Registrable Shares, Preferred
Stock and Warrants have piggyback registration rights each time the Company
proposes to register any shares of Common Stock under the Act for its own
account or on behalf of any other securities holder, subject to a pro rata
cutback in the event of an underwritten offering.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
3.1 Amendment to Articles of Incorporation of the Registrant
filed with the Secretary of State of the State of Florida on
December 20, 1996
10.1 Series A Stock Purchase Agreement by and among Credit
Suisse First Boston Corporation, Silverton International
Fund Limited and the Registrant dated December 20, 1996
10.2 Registration Rights Agreement by and among Credit
Suisse First Boston Corporation, Silverton International
Fund Limited and the Registrant dated December 20,
1996.
10.3 Form of Warrant
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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 thereunto duly authorized.
ABLE TELCOM HOLDING CORP.
By: /s/Daniel L. Osborne
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Daniel L. Osborne
Chief Accounting Officer
Dated: December 31, 1996