UNITED STATES
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
September 18, 1997
Date of Report (Date of earliest event reported)
COVOL TECHNOLOGIES, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 0-27803 87-0547337
(State or other juris- (Commission File (IRS Employer
diction of incorporation) Number) Identification No.)
3280 North Frontage Road
Lehi, Utah, 84043
(Address of principal (Zip Code)
executive offices)
(801) 768-4481
(Registrant's telephone number, including area code)
Item 5. Other Events
Private Placement of Preferred Stock and Warrants
As of September 18, 1997, and in reliance on Section 4(2) and
Regulation D ("Regulation D") of the Securities Act of 1933, as amended, Covol
Technologies, Inc. (the "Company") privately sold 104,294 Units to three
"accredited investors" as that term is defined under Rule 501 of Regulation D,
for an aggregate purchase price of approximately $2,200,000. Each Unit consisted
of (i) three shares of the Company's Series B Convertible Preferred Stock, par
value $.001 per share (the "Preferred Stock"), and (ii) a warrant to acquire one
share of Company common stock, par value $.001 per share (the "Common Stock") at
a price of $8.00 per share. The purchase price for each Unit was $21.00. The
Warrant is exercisable at any time on or before September 30, 1999.
The Preferred Stock sold as part of a Unit was issued pursuant to the
terms of a Certificate of Designation filed with the Delaware Secretary of State
(the "Certificate of Designation"), a copy of which is included as an Exhibit to
this report. Under the Certificate of Designation, the Preferred Stock (i)
accrues dividends on a daily basis at a rate equal to the 2-year treasury bond
rate plus one and one-half percent (initially 7.29% per annum but subject to a
one-time adjustment on March 18, 1998) on the liquidation value ($7.00) of each
share from the date of issuance until paid or converted (with no compounding of
dividends being authorized) payable semi-annually in the discretion of the
Company, (ii) is redeemable by the Company at any time after 30 days' written
notice, (iii) has no voting rights unless specifically authorized by the
Delaware General Corporate Law, (iv) is convertible by the Company at any time
after September 30, 1998. The Units were privately placed pursuant to
Subscription Agreements between the Company and the accredited investors.
In connection with the sale of the Series B Preferred Stock, the
Company issued as a finders fee to two accredited investors warrants to acquire
an aggregate of 62,576 shares of the Company's Common Stock at a price of $8.00
per share at any time prior to September 30, 1999. Statements related to the
foregoing offering are neither offers to sell nor solicitations of offers to
buy.
Private Placement of Common Stock and Warrants
As of September 30, 1997, the Company accepted subscriptions for the
purchase of 100,000 Units pursuant to a Confidential Private Placement
Memorandum, dated August 28, 1997 (the "Memorandum"), at a price of $35.00 per
Unit with an aggregate purchase price of $3,500,000. Each Unit consisted of five
(5) shares of Common Stock of the Company together with a warrant to purchase
one (1) additional share. The exercise price of the warrant is $8.00 per share
and the warrant must be exercised by April 30, 1998. Pursuant to the terms of
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the Memorandum, the Company has granted to purchasers of the Units piggyback
registration rights on the shares of Common Stock underlying the Units and the
shares of Common Stock which have or may become issuable from the exercise of
the warrant.
Effective as of September 30, 1997, the Company also conditionally
accepted additional subscriptions for $600,000 pursuant to the Memorandum (the
"Conditional Subscriptions"). Because the Conditional Subscriptions result in a
total offering of approximately 117,143 Units at an aggregate purchase price of
approximately $4,100,000, the Conditional Subscriptions are subject to the
appropriate approval by the prior purchasers under the Memorandum to an increase
in the maximum offering amount under the Memorandum from 100,000 Units (at an
aggregate purchase price of $3,500,000) to approximately 117,143 Units (at an
aggregate offering price of approximately $4,100,000). If the appropriate
approvals are not obtained, the Conditional Subscriptions will be rejected and
the offering under the Memorandum will remain closed with respect to the
subscriptions for $3,500,000 already received and accepted by the Company
effective as of September 30, 1997. If the appropriate approvals are obtained,
the Conditional Subscriptions will be closed separately from the prior
subscriptions as soon as practical after the approval is obtained.
In connection with the sale of the Units under the Memorandum, the
Company has agreed to issue to three accredited investors finder fees in the
form of warrants to acquire an aggregate of up to 166,667 shares of the
Company's Common Stock (up to 195,241 shares if the Conditional Subscriptions
are approved), at a purchase price of $8.00 per share at any time prior to
October 31, 1999. Statements related to the foregoing offering are neither
offers to sell nor solicitations of offers to buy.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Listed below are the exhibits furnished in accordance with
Item 601 of Regulation S-K.
3.1.3 Certificate of Designation, Number, Voting Powers,
Preferences and Rights of the Company's Series B
Convertible Preferred Stock
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
COVOL TECHNOLOGIES, INC.
(Registrant)
/s/ Stanley M. Kimball
-------------------------
Date: October 27, 1997 By: Stanley M. Kimball
Title: Chief Financial Officer