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) - December 10, 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.
Completion of a Private Placement.
On December 10, Data Race, Inc. (the "Company") completed a private
placement of 1,904,761 shares of its common stock (the "Common Shares"), and
warrants to purchase 571,429 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 $4,000,000. The Warrants are
exercisable at a price of $3.00 per share through December 10, 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 January 9, 2000,
or declared effective by April 8, 2000. 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 June 7, 2000.
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.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Description
------- -----------
10.1 Securities Purchase Agreement dated December 10, 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 December 10, 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 December 10, 1999, issued to
Cranshire Capital, L.P.
10.4 Warrant Agreement, dated December 10, 1999, issued to
Keyway Investments Ltd.
10.5 Warrant Agreement, dated December 10, 1999, issued to
Lionhart Investments Ltd.
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: December 15, 1999 By: /s/ Gregory T. Skalla
--------------------------------------
Gregory T. Skalla,
Senior Vice President-Finance, Chief
Financial Officer, Treasurer and
Secretary
EXHIBIT INDEX
Exhibit Description
------- -----------
10.1 Securities Purchase Agreement dated December 10, 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 December 10, 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 December 10, 1999, issued to
Cranshire Capital, L.P.
10.4 Warrant Agreement, dated December 10, 1999, issued to
Keyway Investments Ltd.
10.5 Warrant Agreement, dated December 10, 1999, issued to
Lionhart Investments Ltd.