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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 7, 1998
SI DIAMOND TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in its Charter)
Texas
(State or Other Jurisdiction of Incorporation)
1-11602 76-0273345
(Commission File No.) (I.R.S. Employer Identification No.)
3006 Longhorn Boulevard
Suite 107
Austin, Texas 78758
(Address of Principal Executive Offices)
(512) 339-5020
(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events
On November 11, 1998, Electronic Billboard Technology, Inc. ("EBT"), a
wholly-owned subsidiary of SI Diamond Technology, Inc. ("SIDT") entered into a
Marketing Agent Agreement (the "Marketing Agreement") with Vision Mark, L.L.C.,
a Texas limited liability company ("Vision Mark"). Pursuant to the Marketing
Agreement, EBT appointed Vision Mark as a nonexclusive marketing representative.
In connection with the Marketing Agreement, SIDT entered into a Consulting and
Advisory Services Compensation Agreement ("Compensation Agreement") with C & A
Services, L.L.C. ("C & A"). Pursuant to the Compensation Agreement, Billy Jeff
Clement has the right to be added to the Board of Directors of SIDT. SIDT also
agreed that at such time as EBT shall enter into a letter of intent for the
installation of certain of its operating systems resulting from Vision Mark's
representation of EBT, SIDT shall issue C & A 300,000 shares of its Common
Stock.
SIDT also issued warrants to purchase SIDT Common Stock to C & A, which
shall be exercisable upon the achievement of certain goals as described below:
(1) Once EBT has received revenue from arrangements pursuant to the
Marketing Agreement in the aggregate of $10,000,000, and for each
successive and cumulative $10,000,000 increment of revenue achieved
pursuant to the Marketing Agreement, C & A may exercise warrants to
purchase up to 250,000 shares of SIDT Common Stock at a purchase price
equal to 50% of the average closing price of SIDT Common Stock on the
five business days next preceding the date of the achievement of each
$10,000,000 increment in revenue from the Marketing Agreement.
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(2) Within 60 days following each annual anniversary of the Marketing
Agreement, if the aggregate revenue from the Marketing Agreement is at
least equal to $10,000,000 for each such annual period, C & A shall
have the additional right thereafter to exercise warrants to purchase
shares of SIDT Common Stock with respect to each such annual
determination. If the amount of revenue received pursuant to the
Marketing Agreement is equal to, but not less than 25% of, the
aggregate revenue of SIDT for each such annual period, C & A may
exercise warrants to purchase up to 100,000 shares of SIDT Common
Stock at a purchase price equal to 75% of the average closing price of
SIDT Common Stock on the five business days next preceding the last
business day of each such annual period. For each additional 1% above
25% that the revenue received pursuant to the Marketing Agreement
contributed to the aggregate SIDT annual revenue for such annual
period, C & A may exercise warrants to purchase up to 100,000 such
additional shares of SIDT Common Stock, in incremental amounts of
4,000 shares of SIDT Common Stock each for each such additional 1% of
revenue that the Marketing Agreement contributed to the aggregate
revenue of SIDT for such annual period. These warrants may be
exercised at a purchase price equal to the average closing price of
SIDT Common Stock on the five business days next preceding the last
business day of such annual period, less a percentage equal to the sum
of 25% plus an additional 1% for each additional 1% over and above 25%
(not to exceed, in the aggregate, 50%) that the revenue achieved
pursuant to the Marketing Agreement contributed to the aggregate SIDT
revenue for such annual period.
(3) SIDT has also issued warrants to C & A to purchase an additional
2.300,000 shares of SIDT's Common Stock upon the receipt by EBT of
each of $100,000,000 and $200,000,000, respectively, of cumulative
revenue from the Marketing Agreement (for a maximum of 4,600,000
shares). The purchase price for the shares subject to these warrants
shall be equal to 50% of the
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average closing price on the five business days next preceding the date on the
achievement of each of $100,000,000 and $200,000,000 of such cumulative revenue
by EBT.
Notwithstanding anything contained in the Compensation Agreement, the
number of shares of SIDT Common Stock received by C & A shall not exceed
10,000,000 shares, subject to adjustment in certain circumstances.
The Company also announced that the proposed transaction in which EBT
Acquisition Company was going to buy the assets of Electronic Billboard
Technology, Inc. was terminated by mutual agreement of both parties.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
4.1 Regulation D Subscription Agreement dated as of November 11,
1998, by and between the Company and C & A Services, L.L.C.,
for the issuance of warrants to purchase shares of Common
Stock of the Company.
10.1 Consulting and Advisory Services Compensation Agreement by
and between the Company and C & A Services, L.L.C., dated as
of November 11, 1998.
10.2 Marketing Agent Agreement by and between Electronic
Billboard Technology, Inc. and Vision Mark, L.L.C., dated as
of November 11, 1998.
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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, thereunto duly authorized.
SI DIAMOND TECHNOLOGY, INC.
By: /s/Douglas P. Baker
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Douglas P. Baker
Vice President
and Chief Financial Officer
Dated: December 7, 1998