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 Securites Exchange
Act of 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) September 23, 1997
CINEMASTAR LUXURY THEATERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
California 0-25252 33-0451054
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(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION IDENTIFICATION NO.)
431 College Boulevard
Oceanside, California 92057-5435
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (760) 630-2011
ITEM 1. CHANGE OF CONTROL OF REGISTRANT
On September 23, 1997, Registrant entered into a definitive agreement
for CinemaStar Acquisition Partners, L.L.C. ("CAP") to acquire a majority equity
interest in Registrant through a $15 Million purchase of newly issued shares of
Registrant's common stock.
Pursuant to a Stock Purchase Agreement, CAP will purchase 17,684,464
shares of common stock for a purchase price of $0.848202 per share. CAP also
will receive at closing warrants to purchase 1,630,624 shares of common stock at
an exercise price of $0.848202 per share. The Stock Purchase Agreement is filed
as Exhibit 4.1 to this Report and is incorporated herein by reference. The form
of Warrant to Purchase Common Stock is filed as Exhibit 4.2 to this Report and
is incorporated herein by reference.
Upon Execution of the Stock Purchase Agreement, CAP received an
additional warrant to purchase one million shares of common stock at an exercise
price of the lower of $0.848202 or the previous five day trading price of
Registrant's common stock. The Warrant to Purchase Common Stock is filed as
Exhibit 4.3 to this Report and is incorporated herein by reference.
Pursuant to the terms of the Stock Purchase Agreement, Registrant
may be obligated to issue additional shares of common stock to CAP with
respect to certain expenses, liabilities and operating losses of Registrant
arising or disclosed after August 31, 1997 or arising prior to August 31,
1997 and not disclosed or quantified before August 31, 1997.
Registrant's board of directors will be reconstituted to reflect the
majority interest of CAP.
Completion of the transaction is subject to certain other conditions
including shareholder approval. Registrant plans to hold a special shareholder
meeting on a date to be announced. Registrant anticipates the transaction will
be completed in December 1997.
Concurrent with the signing of the Stock Purchase Agreement,
Registrant received a $3 million bridge loan from an affiliate of CAP to
complete existing projects and to pay off certain indebtedness. The bridge loan
is convertible into three million shares of common stock of Registrant at $1.00
per share. The Converitible Secured Promissory Note evidencing the bridge loan
is filed as Exhibit 4.4 to this Report and is incorporated herein by reference.
Registrant's obligations under the Convertible Secured Promissory Note are
secured by Registrant's grant of a security interest in Registrant's assets at
the Mission Grove 14 theater complex and Mission Marketplace 13 theater complex,
and Registrant's grant of deeds of trust secured by the leases of those two
theater complexes. The Security Agreement is filed as Exhibit 4.5 to this
Report and is incorporated herein by reference. The Leasehold Deeds of Trust
are filed as Exhibits 4.6 and 4.7 and are incorporated herein by reference.
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In connection with the bridge loan, Registrant issued a warrant to the lender
to purchase three million shares of common stock at an exercise price of
$0.848202 per share, and a second warrant to purchase 1.5 million shares at
an exercise price of $0.848202 per share. The second warrant will be
cancelled upon the completion of the equity financing. The warrants are
filed as Exhibits 4.8 and 4.9 to this Report and are incoporated herein by
reference.
The issuance of the shares of common stock and warrants contemplated
in the transaction will cause an anti-dilution adjustment of Registrant's
publicly traded warrants, resulting in a significant reduction in the exercise
price of such warrants and a significant increase in the number of shares which
can be acquired upon exercise of the warrants.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
4.1 Stock Purchase Agreement, dated as of September 23, 1996, by and
among CinemaStar Luxury Theaters, Inc., Reel Partners, L.L.C.,
and CinemaStar Acquisition Partners, L.L.C.
4.2 Form of Warrant to Purchase Common Stock
4.3 Warrant to Purchase Common Stock, dated September 23, 1997
4.4 Convertible Secured Promissory Note, dated September 23, 1997.
4.5 Security Agreement between CinemaStar Luxury Theaters, Inc. and
Reel Partners, L.L.C., dated September 23,1997
4.6 Leasehold Deed of Trust between CinemaStar Luxury Theaters, Inc.
and Reel Partners, L.L.C., dated as of September 22, 1997.
4.7 Leasehold Deed of Trust between CinemaStar Luxury Theaters, Inc.
and Reel Partners, L.L.C., dated as of September 22, 1997.
4.8 Warrant to Purchase Common Stock, dated September 23, 1997
4.9 Warrant to Purchase Common Stock, dated September 23, 1997
4.10 Press Release, dated September 24, 1997
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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 hereunto duly authorized.
Dated: September 24, 1997 CINEMASTAR LUXURY THEATERS, INC.
By: /s/ JOHN ELLISON
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John Ellison
President and Chief Executive Officer
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EXHIBIT INDEX
Exihibit
Number Description
4.1 Stock Purchase Agreement, dated as of
September 23, 1996, by and among
CinemaStar Luxury Theaters, Inc., Reel
Partners, L.L.C., and CinemaStar
Acquisition Partners, L.L.C.
4.2 Form of Warrant to Purchase Common Stock
4.3 Warrant to Purchase Common Stock, dated
September 23, 1997
4.4 Convertible Secured Promissory Note,
dated September 23, 1997.
4.5 Security Agreement between CinemaStar
Luxury Theaters, Inc. and Reel Partners,
L.L.C., dated September 23, 1997
4.6 Leasehold Deed of Trust between
CinemaStar Luxury Theaters, Inc. and
Reel Partners, L.L.C., dated as of
September 22, 1997.
4.7 Leasehold Deed of Trust between
CinemaStar Luxury Theaters, Inc. and
Reel Partners, L.L.C., dated as of
September 22, 1997.
4.8 Warrant to Purchase Common Stock, dated
September 23, 1997
4.9 Warrant to Purchase Common Stock, dated
September 23, 1997
4.10 Press Release, dated September 24, 1997
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