UNITED STATES
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
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DATE OF REPORT: APRIL 7, 2003
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(DATE OF EARLIEST EVENT REPORTED)
TECHTEAM GLOBAL, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-16284 38-2774613
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(STATE OR OTHER JURISDICTION OF (COMMISSION FILE (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION) NUMBER) NUMBER)
27335 WEST 11 MILE ROAD
SOUTHFIELD, MICHIGAN 48034
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(248) 357-2866
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
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On April 8, 2003, TechTeam Global, Inc. (the "Company")
completed a private placement of 689,656 shares of newly created
Series A Convertible Preferred Stock ("Series A Preferred Stock")
with ChrysCapital II, LLC, ("CCII") a Mauritius limited liability
company, in consideration for five million six dollars ($5,000,006)
or $7.25 per share. The transaction is documented in the Securities
Purchase Agreement ("SPA") between the parties. Series A Preferred
Stockholders are currently entitled to a Board seat, and CCII has
agreed, through its representative on the Board, to provide advice
and guidance to the Company regarding the Company's expansion into
India and elsewhere in Asia. The transaction is exempt from
registration requirements under section 5 of the Securities Act of
1933 ("Act") under section 4(2) of the Act, as amended, and Rule
506 of Regulation D promulgated by the U.S. Securities and Exchange
Commission. The SPA is attached hereto as Exhibit 10.1, and
incorporated by reference.
A description of the Series A Preferred Stock is set forth
in detail in the Certificate of Designations filed by the Company
on April 7, 2003, with the Secretary of State for the State of
Delaware, ("Certificate of Designations"). The Certificate of
Designations set the authorized number of shares of Series A
Preferred Stock at 689,656. Certificate of Designations is attached
hereto as Exhibit 3.5 and incorporated herein by reference. The
powers, rights, restrictions and limitations include:
RIGHTS SHARED WITH COMMON STOCK. The holder(s) of
Series A Preferred Stock ("Holder") has the right to vote
each share of its Series A Preferred Stock as if it were
converted to the Company's Common Stock ("Common Stock")
on the record date for determination of a common
stockholder's entitlement to vote. The Holder will also
participate, on the same basis, in any dividends or other
distributions made to the holders of Common Stock.
CLASS VOTING RIGHTS. The Holder has the right to
vote as a class on (i) any amendment of the Company's
Certificate of Incorporation which adversely affects the
rights of the Holder, including authorizing or creating of
any class of stock ranking senior to Series A Preferred
Stock; (ii) any increase in the amount of Series A
Preferred Stock, or the increase in the authorized amount
of any class of stock ranking equal to or senior to the
Series A Preferred Stock; and (iii) the redemption of any
capital stock of the Company, but not including any stock
repurchase program approved by the Company's Board of
Directors.
CONVERSION. The Holder of Series A Preferred
Stock may convert its Series A Preferred Stock share into
Common Stock ("Conversion Shares") at any time after the
first anniversary of the initial issuance thereof on a one
share of Series A Preferred Stock for one share of Common
Stock basis. The conversion ratio is subject to adjustment
if there is a dilutive issuance as defined in the
Certificate of Designations.
REDEMPTION. Any of the shares of Series A
Preferred Stock that are not
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converted three years after the initial issuance will
be redeemed at the original purchase price (subject
to adjustment for a dilutive issuance). The holder
also has a "put right" to force the redemption of its
shares of Series A Preferred Stock at a price equal
to the Redemption Price, exercisable for a period of
ninety (90) days after the occurrence of certain
events, including but not limited to (i) the removal
of William F. Coyro, Jr. without cause, as Chief
Executive Officer of the Company by the Board of
Directors; or (ii) the Company's net cash is less
than six million five hundred thousand dollars
($6,500,000). In the event of a change of control, if
the Holder does not convert to Common Stock, the
Series A Preferred Stock will automatically be
redeemed.
LIQUIDATION PREFERENCE. In the event of any
liquidation, dissolution or winding up of the affairs of
the Company, the Holder will receive in preference to the
holders of Common Stock, an amount equal to the initial
purchase price (subject to adjustment as set forth above).
RESTRICTIONS ON TRANSFER. CCII cannot transfer
any of its Series A Preferred Stock within the first year
after issuance. CCII can transfer up to 50% of its Series
A Preferred Stock during the second year and an unlimited
percentage of the Series A Preferred Stock during the
third year to qualified investors who are not engaged in a
business competitive to the Company. If Series A Preferred
Stock are transferred to non-affiliates of CCII, the new
holder will not have (1) right to vote as common stock, or
(2) the put right if Dr. Coyro is removed as Chief
Executive Officer without cause. Further, a subsequent
holder cannot transfer their Series A Preferred Stock
without the consent of the Company. The Company is also
granted a right of first offer to purchase any shares the
holder wishes to sell.
In connection with the SPA, the Company and CCII also
entered into a Registration Rights Agreement ("RRA") under which
CCII and/or its assignee, after the first year anniversary of April
8, 2003, have been granted certain demand and "piggyback"
registration rights with respect to the Conversion Shares. The RRA
is attached hereto as Exhibit 10.2.
The Company's Board of Directors also expanded the size of
its membership to 10 seats to accommodate the seat granted under
this transaction. CCII, as the holder of Series A Preferred Stock,
has elected Brahmal Vasudevan, age 35. Mr. Vasudevan currently
serves as General Partner of ChrysCapital II, LLC and Managing
Director of ChrysCapital Investment Advisors [S] Pte Ltd, which
manages and advises various ChrysCapital funds including
ChrysCapital II, LLC. Mr. Vasudevan has held both positions since
2000. Between 1997 and 2000, Mr. Vasudevan was Director of
Marketing at ASTRO, a leading multi-channel DBS pay-TV operator in
Southeast Asia. Mr. Vasudevan holds an MBA from the Harvard
Business School and graduated with First-class honors in
Aeronautical Engineering from Imperial College, University of
London.
On April 9, 2003, the Company issued a press release
regarding the transaction; a
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copy of which is attached as Exhibit 99.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
3.5 Certificate of Designations of the Series A Convertible Preferred
Stock dated April 7, 2003
10.1 Securities Purchase Agreement between TechTeam Global, Inc. and
ChrysCapital II, LLC dated April 8, 2003 (excluding Exhibits and
Schedules thereto*)
10.2 Registration Rights Agreement between TechTeam Global, Inc. and
ChrysCapital II, LLC dated April 8, 2003
99.1 Press Release of TechTeam Global, Inc., dated April 9, 2003
SIGNATURE
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 thereunto duly authorized.
TECHTEAM GLOBAL, INC.
By: /s/ Michael A. Sosin
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Michael A. Sosin, Secretary
Date: April 9, 2003
* Exhibits and Schedules have been purposefully omitted. Copies will be
provided to the Securities and Exchange Commission ("SEC") upon request.
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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3.5 Certificate of Designations of the Series A Convertible Preferred Stock dated
April 7, 2003
10.1 Securities Purchase Agreement between TechTeam Global, Inc. and ChrysCapital II,
LLC dated April 8, 2003 (excluding Exhibits and Schedules thereto *)
10.2 Registration Rights Agreement between TechTeam Global, Inc. and ChrysCapital II,
LLC dated April 8, 2003
99.1 Press Release of TechTeam Global, Inc. dated April 9, 2003.
* Exhibits and Schedules have been purposefully omitted. Copies will be
provided to the SEC upon request.
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