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):
November 27, 2001
eMagin Corporation
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(Exact name of registrant as specified in its charter)
Delaware 000-24757 88-0378451
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(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Identification
Incorporation) Number)
2070 Route 52, Hopewell Junction, New York 12533
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(Address of principal executive offices) (zip code)
(845) 892-1900
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(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On November 27, 2001 (the "Closing Date"), eMagin Corporation
("eMagin") and an Investor Group ("Investors") entered into a Secured Note
Purchase Agreement (the "Secured Note Agreement") whereby Investors agreed to
lend eMagin $875,000 in exchange for (i) $875,000 9.00% per annum Secured
Convertible Promissory Note due on August 30, 2002 (the "Secured Note") and (ii)
Warrants (the "Warrants") exercisable for a period of three (3) years to
purchase 359,589 shares of common stock of eMagin. In order to induce the
Investors to enter in to the Secured Note and Warrants, The Travelers Insurance
Company ("Travelers") agreed to cap the warrants issuable under the August 20,
2001 Note Purchase Agreement to 451,842 shares of common stock of eMagin. The
Secured Note Agreement provides for eMagin to issue up to $1,500,000 aggregate
amount of Secured Notes.
Interest is payable on the Debentures at a rate of 9% per annum and is
payable at maturity or on the effective date of an early termination. The full
amount of the Secured Note is secured by a general interest in the assets of
eMagin pursuant to a Security Agreement (the "Security Agreement") dated
November 20, 2001. The Secured Note is convertible into common stock of eMagin
at a price of 105% of the closing price of the Secured Note upon the issuance of
a minimum of $10,000,000 of convertible debt or equity securities prior to the
maturity of the Secured Note, and registration under The Securities Act of 1933
of the underlying common stock to be issued pursuant to such conversion. The
Investors may convert the Secured Note and accrued interest into common stock of
eMagin at any time. Upon a change in control of eMagin, eMagin may call the
Secured Note and purchase all of the aggregate principal amount of the Secured
Note at a price equal to 250% of the principal amount plus accrued and unpaid
interest. If eMagin does not call the Secured Note within thirty (30) days of
the event of a change in control, the Investors may put the Secured Note to
eMagin at a price equal to 250% of the aggregate principal amount for a period
of thirty days following the call period.
The foregoing is not intended to be a full and complete description of
the transaction. Terms of the transaction are more fully described in the copies
of the Secured Note Purchase Agreement, the form of Secured Convertible
Promissory Note, the form of Stock Purchase Warrant and the Registration Rights
Agreement attached as exhibits to this Form 8-K.
The Company disseminated the attached press release on December 4,
2001, announcing a corporate restructuring and reduction of the Company's
workforce to 26 people.
On December 10, 2001, Mr. N. Dadomar Reddy and Mr. Martin Solomon
announced their resignation from the Board of Directors of eMagin Corporation,
effective December 10, 2001. Both Mr. Reddy and Mr. Solomon cited the heavy
burden of time required to participate in eMagin Corporation's business affairs.
Mr. Reddy and Solomon cited no issues with management policy or procedures.
ITEM 7. EXHIBITS.
Exhibit
Number Description
4.1 Secured Note Purchase Agreement entered into as of November
27, 2001, by and among eMagin Corporation and Investors.
4.2 Form of Secured Convertible Promissory Note due August 30,
2002.
4.3 Form of Stock Purchase Warrant to purchase common stock of
eMagin Corporation.
4.4 Registration Rights Agreement dated November 27, 2001 by and
between eMagin Corporation and Initial Investors.
4.5 Security Agreement dated as of November 20, 2001, by and
between eMagin Corporation, Verus International Ltd and the
Initial Investors.
99.1 Press Release of the Company dated December 4, 2001, announc-
ing a corporate restructuring.
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 hereunto duly authorized.
EMAGIN CORPORATION
By:
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Name: Andrew P. Savadelis
Title: Executive Vice President and
Chief Financial Officer
Dated: December 18, 2001