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
August 5, 1997
Date of Report (Date of earliest event reported)
ACCENT SOFTWARE INTERNATIONAL LTD.
(Exact name of registrant as specified in charter)
Israel 0-26394 N/A
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation or
Organization)
28 Pierre Koenig Street, Jerusalem 91530, Israel
(Address of principal executive offices) (Zip Code)
011-972-2-679-3723
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
ITEM 5. Other Events
On August 5, 1997, the Company completed a financing arrangement with CC
Investments LDC (the "Investor"), pursuant to Rule 505 of Regulation D of the
Securities Act of 1933. Rule 505 was available because the issuance was to
fewer than 35 nonaccredited investors. The Company received $2,000,000 in
cash before expenses (approximately $1,850,000 net of expenses) and, in
return, issued the Investor an unsecured debenture carrying 6% annual
interest and convertible into the Company's Ordinary Shares at the lesser of
135% of the average closing bid price for the five-day period preceding the
closing date or 75% of the average closing bid price of the Ordinary Shares
for the five-day period preceding the date of conversion. The debenture
automatically converts into Ordinary Shares on August 5, 1999, and may be
converted anytime after November 2, 1997. The Company, at its option, may
require the Investor to convert the debenture into Preferred Shares of the
Company at any time prior to November 3, 1997. Terms of the Preferred Shares
will be identical to the debentures. Conversion of the debentures (or
Preferred Shares) will result in dilution to the Company's current
shareholders. Assuming the Company's share price remains at its August 5,
1997, level of $1.62 per share, the debentures (or Preferred Shares) will be
convertible into approximately 1,646,000 Ordinary Shares and the percentage
dilution will amount to approximately 12%. If the share price increases from
its August 5 level, the conversion price will increase and there would be a
corresponding decrease in the number of shares into which the debentures
would be converted and in the amount of dilution which would be experienced
by the shareholders. If the share price decreases from its August 5 level,
the conversion price will decrease and there would be a corresponding
increase in the number of shares into which the debentures would be converted
and in the amount of dilution which would be experienced by the shareholders.
There can be no assurance that the share price will either increase or
decrease.
The Investor was also granted warrants to purchase 250,000 Ordinary Shares
of the Company at an exercise price of $2.80 and additional warrants to purchase
50,000 Ordinary Shares at an exercise price of $3.20. The placement agents for
the transaction were The Shemano Group, Inc., San Francisco, California, and
Equity Management Partners, Atlanta, Georgia. The placement agents were granted
warrants to purchase 300,000 Ordinary Shares at an exercise price equal to 115%
of the closing bid price on the day of closing. The warrants are valid for five
years. Exercise of all 600,000 warrants granted to the Investor and to the
placement agents will result in a percentage dilution to existing shareholders
of approximately 5%.
Pursuant to the terms of the registration rights agreement which was part
of the financing arrangement, the Company is required to file a registration
statement on Form S-3 for the Ordinary Shares reserved for issuance upon
conversion of the debenture (or Preferred Shares) and exercise of the warrants
within 15 days of the closing which took place on August 5, 1997.
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EXHIBITS
10. Securities Purchase Agreement, dated August 5, 1997, between CC
Investments LDC and Accent Software International Ltd., which includes a
Convertible Debenture, two Warrants and a Registration Rights Agreement, all
dated August 5, 1997, as exhibits thereto.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACCENT SOFTWARE INTERNATIONAL LTD.
DATE: August 19, 1997 By: /s/ Robert J. Behr
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Robert J. Behr
Chief Financial Officer
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