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): September 25, 2003
China Cable and Communication, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 2-98997-NY 11-2717273
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
Suite 805, One Pacific Place, 88 Queensway, Hong Kong
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (852) 2891-3130
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Item 5. Other Events And Regulation FD Disclosure.
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On September 25, 2003, the Company completed the sale of 2,758,621 shares
of the Company's restricted 8% Convertible Preferred Stock, par value $.0001 per
share (the "Preferred Stock"), to Gryphon Master Fund, L.P., a Bermuda limited
partnership (the "Purchaser"), for $1.45 per share or an aggregate purchase
price of $4,000,000. The purchase price is equal to 90% of the moving average
closing price of the Company's common stock for the 60 trading days immediately
prior to the entering into of the agreement. In connection with this
transaction, the Company also issued to the Purchaser warrants to purchase up to
827,586 shares of the Company's restricted common stock for $2.18 per share
until September 24, 2008 (the "Warrants"). The sale of the Preferred Stock and
the Warrants to the Purchaser was made in a private placement transaction in
reliance upon an exemption from registration under Section 4(2) of the
Securities Act of 1933. The Company intends to use the proceeds from this
transaction for working capital purposes and for possible future acquisitions,
of which there is no assurance.
The Preferred Stock accrues dividends at the rate of 8% of the purchase
price per share per annum, payable when, as and if declared by the Board of
Directors on September 30 and March 31 of each year commencing with March 31,
2004. The Preferred Stock is senior to the common stock with respect to the
payment of dividends, redemption payments and rights upon liquidation,
dissolution or winding up of the affairs of the Company. Upon liquidation, the
Preferred Stock is entitled to receive a liquidation preference equal to the
purchase price plus the amount of accrued and unpaid dividends. The Company may
redeem the Preferred Stock at any time after September 25, 2004 if the market
price of the common stock for a period of any 20 out of 30 trading days equals
or exceeds 200% of the conversion price then in effect. The conversion price
currently in effect is equal to the purchase price of $1.45 per share. Until
redeemed, the Preferred Stock can be converted into common stock at a rate per
share equal to the purchase price, subject to adjustment.
The Warrants may be exercised until September 24, 2008 at an exercise price
of $2.18 per share. If the Company fails to have a registration statement in
effect covering the resale of the shares underlying the Preferred Stock and
issuable upon exercise of the Warrants, then beginning after September 25, 2004,
the Purchaser may exercise the Warrants on a "cashless" basis utilizing the
equity value of a portion of the Warrants to pay the Purchase Price for the
exercise of other portions of the Warrants.
In connection with the sale of the Preferred Stock and Warrants, the
Company and the Purchaser entered into a Registration Rights Agreement. Pursuant
to this agreement, the Company agreed to file and to use its best efforts to
become effective a registration statement covering the resale of the shares of
common stock issuable upon conversion of the Preferred Stock and exercise of the
Warrants. If the registration statement is not filed within 30 days after
September 25, 2003 and is not declared effective by the Securities and Exchange
Commission within 120 days after September 25, 2003, the Company agrees to pay
the Purchaser liquidated damages equal to 2% of the purchase price of the
Preferred Stock for each 30-day period after that date until the registration
statement is declared effective. The Company will pay all expenses incurred in
connection with the registration statement.
Item 7. Financial Statements and Exhibits.
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Exhibit Index
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Exhibit
Number Description
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4.1 Certificate of Designations of 8% Convertible Preferred Stock
10.1 Securities Purchase Agreement dated September 24, 2003 between
the Registrant and Gryphon Master Fund, L.P.
10.2 Warrant For Purchase Of Common Stock dated September 24, 2003 to
Gryphon Master Fund, L.P.
10.3 Registration Rights Agreement dated September 24, 2003 between
the Registrant and Gryphon Master Fund, L.P.
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 hereunto duly authorized.
Date: 26 September 2003 CHINA CABLE AND COMMUNICATION, INC.
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By: /s/ Raymond Kwan
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Raymond Ying-Wai Kwan
Chief Executive Officer
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