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) - June 25, 1999
Data Race, Inc.
(Exact name of registrant as specified in its charter)
TEXAS
(State or other jurisdiction of incorporation)
0-20706 74-2272363
(Commission File Number) (I.R.S. Employer
Identification No.)
12400 Network Blvd.
San Antonio, Texas 78249
(210) 263-2000
(Address of Principal Executive Offices and Telephone Number,
Including Area Code)
Item 5. Other Events.
(a) Completion of a Private Placement.
On June 25, 1999, Data Race, Inc. (the "Company") completed a private
placement of 2,132,955 shares of its common stock (the "Common Shares") and
warrants to purchase 639,888 shares of common stock (the "Warrants") to
Cranshire Capital, L.P., Keyway Investments Ltd., and Lionhart Investments Ltd.
(the "Investors"), for an aggregate price of $6,000,000. Each Investor
purchased one-third of the securities issued in the private placement. The
Warrants are exercisable at a price of $4.02 per share through June 25, 2001.
The Company intends to use the proceeds from the private placement primarily for
general corporate purposes.
The Company has agreed to file a registration statement under the
Securities Act of 1933, covering the resale of the Common Shares and the shares
of common stock issuable upon exercise of the Warrants. The Company will incur
certain penalties if the registration statement is not filed by July 23, 1999,
or declared effective by October 23, 1999. These penalties may be paid in cash
or, at the Investors' option, in common stock. In addition, if the Company
issues additional shares of common stock prior to the effective date of the
registration statement, then antidilution provisions contained in the securities
purchase agreement may require the Company to issue additional shares of common
stock to the Investors so as to prevent dilution of the Investors' investment in
the Company.
In connection with the private placement, the Company granted to the
Investors a right of first refusal to purchase additional securities issued by
the Company (subject to certain exceptions) prior to December 25, 1999.
As compensation for the investment by the Investors, the Company paid to a
placement agent a cash fee equal to 6% of the gross proceeds received by the
Company from the Investors.
THE SUMMARY OF THE PRIVATE PLACEMENT SET FORTH ABOVE IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE SECURITIES PURCHASE AGREEMENT, THE WARRANT
AGREEMENTS, AND THE REGISTRATION RIGHTS AGREEMENT EXECUTED BY THE COMPANY IN
CONNECTION WITH THE PRIVATE PLACEMENT. SUCH DOCUMENTS ARE FILED AS EXHIBITS TO
THIS FORM 8-K.
(b) Approval of a Stock Plan and Bonus Plan.
In April of 1999, the board of directors of the Company approved a
consultant and advisor stock plan, a copy of which is attached as an exhibit to
this Form 8-K. In addition, in February of 1999, the board of directors of the
Company approved a transaction bonus plan for the benefit of designated members
of senior management, a summary description of which is attached as an exhibit
to this Form 8-K.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Description
------- -----------
10.1 Securities Purchase Agreement, dated June 25, 1999, by and
among Data Race, Inc. and Cranshire Capital, L.P., Keyway
Investments Ltd., and Lionhart Investments Ltd., as the
Investors
10.2 Registration Rights Agreement, dated June 25, 1999, by and
among Data Race, Inc. and Cranshire Capital, L.P., Keyway
Investments Ltd., and Lionhart Investments Ltd., as the
Investors
10.3 Warrant Agreement, dated June 25, 1999, issued to Cranshire
Capital, L.P.
10.4 Warrant Agreement, dated June 25, 1999, issued to Keyway
Investments Ltd.
10.5 Warrant Agreement, dated June 25, 1999, issued to Lionhart
Investments Ltd.
10.6 Consultant and Advisor Stock Plan
10.7 Description of Transaction Bonus Plan
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.
DATA RACE, INC.
Date: July 7, 1999 By: /s/ Gregory T. Skalla
--------------------------------
Gregory T. Skalla,
Vice President-Finance, Chief Financial
Officer, Treasurer and Secretary
EXHIBIT INDEX
Exhibit Description
------- -----------
10.1 Securities Purchase Agreement, dated June 25, 1999, by and
among Data Race, Inc. and Cranshire Capital, L.P., Keyway
Investments Ltd., and Lionhart Investments Ltd., as the
Investors
10.2 Registration Rights Agreement, dated June 25, 1999, by and
among Data Race, Inc. and Cranshire Capital, L.P., Keyway
Investments Ltd., and Lionhart Investments Ltd., as the
Investors
10.3 Warrant Agreement, dated June 25, 1999, issued to Cranshire
Capital, L.P.
10.4 Warrant Agreement, dated June 25, 1999, issued to Keyway
Investments Ltd.
10.5 Warrant Agreement, dated June 25, 1999, issued to Lionhart
Investments Ltd.
10.6 Consultant and Advisor Stock Plan
10.7 Description of Transaction Bonus Plan