UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 21, 2005
SILVERSTAR HOLDINGS, LTD.
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(Exact Name of Registrant as Specified in Charter)
Bermuda 0-27494 N/A
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
Clarendon House, Church Street, Hamilton, HM CX, Bermuda
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (441) 295-1422
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On October 21, 2005, Silverstar Holdings, Ltd. (the "Registrant")
entered into a Securities Purchase Agreement (the "Agreement") with DKR
SoundShore Oasis Holding Fund Ltd. (the "Purchaser"), pursuant to which the
Purchaser will invest $5,000,000 in the Registrant. The Company intends to use
the proceeds from the investment for potential acquisitions or working capital.
Upon closing of the Agreement, the Registrant will issue to the
Purchaser a Variable Rate Secured Convertible Debenture (the "Debenture") in the
principal amount of $5,000,000, due on or before the third anniversary of the
closing. The Debenture will be convertible at any time, at the option of the
Purchaser, into shares of common stock of the Registrant, par value $0.01 per
share (the "Common Stock") at a conversion price of $1.738 per share. The
Registrant will pay interest on the aggregate unconverted and then outstanding
principal amount of the Debenture at an annual rate equal to the Prime Rate (as
defined in the Debenture) plus 1.5%, or such lesser rate as set forth in the
Debenture. The Registrant will pay down the Debenture in 27 equal monthly
installments commencing on July 1, 2006. The Registrant will have the right to
redeem the Debenture at any time pursuant to the terms and conditions of the
Debenture.
The Registrant will also issue to the Purchaser a Common Stock Purchase
Warrant (the "Warrant") pursuant to which the Purchaser will be entitled to
purchase from the Registrant up to 791,139 shares of Common Stock at an exercise
price of $1.896 per share at any time before the fifth anniversary of the
closing.
The Registrant's obligations under the Debenture will be secured by a
lien on all assets of the Registrant in favor of the Purchaser pursuant to a
Security Agreement among the Registrant, all of the subsidiaries of the
Registrant and the Purchaser, and guaranteed by all the subsidiaries of the
Registrant pursuant to a Subsidiary Guarantee made by the Registrant's
subsidiaries in favor of the Purchaser. In addition, the obligations of the
Registrant under the Debenture will be guaranteed by Mr. George Karfunkel
pursuant to a Personal Guarantee between Mr. Karfunkel and the Purchaser. The
consummation of the foregoing transactions is subject to customary closing
conditions.
Pursuant to the Agreement, the Registrant agreed to hold a special
meeting of shareholders (which may also be at the annual meeting of
shareholders) at the earliest practical date following the closing date, and in
any event within 60 calendar days following the closing date, for the purpose of
obtaining approval as may be required by the applicable rules and regulations of
the Nasdaq SmallCap Market from the shareholders of the Registrant with respect
to the foregoing transactions, including the issuance of the shares of Common
Stock issuable upon exercise of the Warrant and conversion of the Debenture in
excess of 19.99% of the issued and outstanding Common Stock of the Registrant on
the closing date.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth in Item 1.01 of this Current Report on Form
8-k is hereby incorporated by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Securities Purchase Agreement, dated October 21, 2005, between
the Registrant and the Purchaser.
SIGNATURES
Pursuant to the requirements of 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: October 26, 2005 SILVERSTAR HOLDINGS, LTD.
By: /s/ Clive Kabatznik
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Name: Clive Kabatznik
Title: Chief Executive Officer