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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 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 October 23, 1995
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Dense-Pac Microsystems, Inc.
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(Exact name of registrant as specified in its charter)
California
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(State or other jurisdiction of incorporation)
0-14843 33-0033759
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(Commission File Number) (IRS Employer Identification No.)
7321 Lincoln Way, Garden Grove, California 92641
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 898-0007
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
Pursuant to a Loan Agreement dated October 12, 1994, the Company
borrowed $1.8 million from Euroventures Benelux II B.V., a major shareholder,
and $200,000 from Trude C. Taylor, a director of the Company. The loan was due
in five years, required quarterly interest payments at the rate of 8% per year,
and was secured by all of the Company's assets. As additional consideration
for the loan, the lenders received five year warrants to purchase an aggregate
of 1,000,000 shares of common stock at an exercise price of $2.00 per share.
The exercise price could be paid in cash or by cancellation of amounts
outstanding under the loan.
In October 1995, Trude C. Taylor exercised his warrants to purchase
100,000 shares in consideration for cancellation of $100,000 of his loan to
Dense-Pac and a cash payment of $100,000. Euroventures exercised its 900,000
warrants for a cash payment of $1.8 million. In consideration for
Euroventures' agreement to exercise its warrants for cash in lieu of
cancellation of debt, the Company agreed to renegotiate the terms of
Euroventures' $1.8 million loan and to issue additional warrants to
Euroventures. Euroventures agreed to reduce the interest rate of the loan from
8% to 5% per annum over the remaining four years of the loan and to subordinate
its security interest in accounts receivable in order to permit the Company to
obtain future bank financing. The Company agreed to issue 375,000 four year
warrants. The exercise price of the warrants will be determined on the
occurrence of certain events by August 1, 1996 and will be based on the market
value of the common stock on the applicable date.
The warrants will be redeemable by the Company when the Company's stock
price reaches an amount equal to the warrant exercise price plus $2.00 for 20
consecutive trading days. The warrant exercise price will subject to downward
adjustment should the Company sell common stock at a price per share which is
less than the warrant price. In addition, Euroventures has the right to
require the Company to register the shares underlying the warrants under the
Securities Act of 1933, as amended.
The terms of the remaining $100,000 loan payable to Mr. Taylor were not
changed.
The $1.9 million cash proceeds from the warrant exercises will be used
for general working capital purposes.
Item 7. Financial Statements and Exhibits.
(c) The following exhibits are filed herewith:
10.1 Addendum to Loan Agreement effective as of October 23,
1995, between Dense-Pac Microsystems, Inc. and
Euroventures Benelux II B.V.
10.2 Warrant Agreement dated as of October 23, 1995,
between Dense-Pac Microsystems, Inc. and Euroventures
Benelux II B.V.
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SIGNATURES
Pursuant to 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.
DENSE-PAC MICROSYSTEMS, INC.
Dated November 6, 1995 By /S/ William M. Stowell
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William M. Stowell,
Vice President-Finance