SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) 3/7/97
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SI DIAMOND TECHNOLOGY, INC.
(Exact name of Registrant as specified in charter)
TEXAS 1-11602 76-0273345
(State of (Commission (IRS Employer
Incorporation) File Number) Identification Number)
12100 Technology Boulevard
Austin, Texas 78727
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (512) 331-6200
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On March 11, 1997, the Company issued 1,500 shares of its Series F
Preferred Stock in a transaction under Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), for which the Company
received $1,500,000 (less a 10% commission). As of March 21, 1997 the Company
also had a subscription for the issuance of an additional 200 shares of the
Series F Preferred Stock for which it will receive an additional $200,000 (less
a 10% commission). The Company has authorized the issuance of up to 2,500 shares
of Series F Preferred Stock. The Series F Preferred Stock does not pay any
dividends and has no voting rights except as otherwise required by law.
The shares of Series F Preferred Stock are convertible into shares of the
Company's common stock, par value $.001 (the "Common Stock"), at any time after
the earlier of (i) the effective date of a registration statement covering the
shares of Common Stock into which the Series F Preferred Stock is convertible
(the "Conversion Shares"), or (ii) 90 days after the date of issuance of the
Series F Preferred Stock. Each share of Series F Preferred Stock is convertible
into the number of shares of Common Stock determined by dividing (i) the product
of (a) the original Issue price of the shares of Series F Preferred Stock,
multiplied by (b) .04 times the number of years (or portion thereof) from the
date of issuance of the Series F Preferred Stock, by (ii) the Conversion Price
(as hereinafter defined). The "Conversion Price" shall be the lesser of (x)
$1.75 or (y) 80% of the ten-day average closing bid price of the Common Stock
prior to the conversion date. Upon conversion, if the Conversion Price is $.75
or less the Company shall have the right to redeem the Series F Preferred Stock
being converted in cash by paying the holder an amount equal to the number of
Conversion Shares it would have received had conversion taken place multiplied
by the Conversion Price. Each share of Series F Preferred Stock outstanding on
March 10, 1999 automatically shall be converted into Common Stock on such date
in accordance with the Conversion Price and the other terms of conversion then
in effect.
Under the Regulation D Subscription Agreement between the Company and the
purchasers of the Series F Preferred Stock (the "Reg D Subscription Agreement"),
the Company has agreed not to issue any debt or equity securities for cash in
private (non-registered) capital raising transactions for 90 days without
obtaining the prior written approval of holders of a majority of the Series F
Preferred Stock then outstanding. Notwithstanding this limitation, (i) the
Company may make an offering of convertible debentures pursuant to Regulation S
(see Item 9 below) and (ii) because the Company did not issue Series F Preferred
Stock with a stated value of $2,500,000 by March 20, 1997, the Company may after
such date make an offering or otherwise raise additional funds up to a net
amount to be received by the Company of $800,000.
The Company and the purchasers of the Series F Preferred Stock are also
parties to a Registration Rights Agreement. Pursuant to such agreement the
Company will file a registration statement within 30 days covering the resale of
the Conversion Shares. The Company is obligated to keep the registration
statement effective for one year. If the registration statement is not declared
effective within 90 days as a result of the Company's failure to file or failure
to diligently strive to have it declared effective by such date, the Company
shall pay the holders 1.5% of the stated value of the Series F Preferred Stock
sold per month until the registration statement is declared effective, payable
in Common Stock.
The Statement of Resolutions regarding the Series F Preferred Stock, the
Reg D Subscription Agreement and the Registration Rights Agreement are filed as
exhibits hereto and the foregoing description is qualified it its entirety by
reference thereto.
Item 7. Financial Statements and Exhibits
3.1 Statement of Resolutions Establishing and Designating the Company's
Series F Preferred Stock, as filed with the Secretary of State of the State of
Texas on March 10, 1997.
4.1 Form of Subscription Agreement by and between the Company and the
Holders of the Company's Eight Percent (8%) Convertible Debentures.
4.2 Form of the Company's Eight Percent (8%) Convertible Debentures.
4.3 Form of Regulation D Subscription Agreement by and between the
Company and the Holders of the Company's Series F Preferred Stock.
4.4 Form of Registration Rights Agreement by and between the Company and
the Holders of the Company's Series F Preferred Stock.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On March 7, 1997, the Company issued an 8% Convertible Debenture (the
"Debenture") in the principal amount of $555,555 pursuant to Regulation S
promulgated under the Securities Act. After commissions, the Company received
net proceeds of $500,000. The purchaser of the Debenture was Income Partnership
of America, Ltd., a Belize corporation (the "Purchaser"). The Debenture matures
on March 7, 1999. Interest will accrue and also be payable (either in cash or
Common Stock, at the Company's option) on the maturity date.
The Debenture is convertible into Common Stock at any time after 60 days.
The conversion price shall be 75% of the average of the closing bid price per
share of Common Stock on the NASDAQ Small Cap Market (or such other principal
market for such Common Stock as the case may be) for the 10 consecutive trading
days immediately prior to the conversion date.
The Purchaser, or its affiliates, also agreed to purchase an additional
Debenture, of the same principal amount and under identical terms and
conditions, within 60 days.
The Subscription Agreement between the Company and the Purchaser and the
Debenture are filed as exhibits hereto and the foregoing description is
qualified in its entirety by reference thereto.
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Pursuant to the Securities Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.
SI DIAMOND TECHNOLOGY, INC.
Dated: March 21, 1997 By: /s/ Douglas P. Baker
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Douglas P. Baker
Vice President and
Chief Financial Officer
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