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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):
August 4, 1999
MDI ENTERTAINMENT, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-24919 73-1515699
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(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
201 Ann Street
Hartford, Connecticut 06103
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including
area code: (860) 527-5359
(Former Address, if changed since last report)
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Item 5: Other Events
MDI Entertainment, Inc. (the "Company") received gross proceeds of
$1,750,000 on August 4, 1999 from the private sale to an investor of 2,027
shares of Series A Convertible Preferred Stock (the "Preferred Stock"),
representing approximately 20% of the outstanding common stock of the Company on
an as converted basis. The Preferred Stock has a liquidation preference of
$1,750,000, pays a dividend at the rate of 10% per annum, payable in cash or
common stock at the discretion of the Company, and is convertible into an
aggregate of 2,027,000 shares of the Company's common stock, subject to
adjustment under certain circumstances. As long as 2,027 shares of the Preferred
Stock remain outstanding, the holders of a majority of such shares may elect a
director of the Company. In addition, such holders are entitled to a right of
first refusal on new securities issued by the Company, subject to certain
exclusions. The Company may not create or increase the authorized number of
shares of any class or series of stock ranking prior to or on parity with the
Preferred Stock either as to dividends or liquidation without approval of a
majority of the holders of the Preferred Stock.
The Company has agreed to file a registration statement with respect to the
resale of the common stock underlying the Preferred Stock within 45 days
following closing, which is required to be declared effective within 120 days of
closing, subject to certain exceptions. If such filing and effectiveness are not
achieved by the deadlines, the investor may be entitled to certain penalties. In
addition, upon effectiveness of such registration statement, the Preferred Stock
will pay a reduced dividend at the rate of 5% per annum. If not previously
converted by the investor, the Preferred Stock will automatically convert into
common stock in quarterly installments over a period of one year following the
effectiveness of the registration statement.
In connection with the placement, MDI paid Venture Partners Capital, LLC, a
registered broker-dealer a $140,000 cash fee and a seven-year warrant to
purchase 566,875 shares of common stock at $1.31 per share.
Item 7: Financial Statements, Pro Forma Financial information and Exhibits.
(c) Exhibits
99.1 Stock Purchase Agreement, dated August 4, 1999, between MDI
Entertainment, Inc. and International Capital Partners, LLC.
99.2 Registration Rights Agreement, dated August 4, 1999, between MDI
Entertainment, Inc. and International Capital Partners, LLC.
99.3 MDI Entertainment, Inc. Certificate of Designations, Preferences
and Rights of Series A Preferred Stock, executed August 4, 1999.
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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 hereunto duly authorized.
Dated: August 12, 1999
MDI ENTERTAINMENT, INC.
By: /s/ Steven M. Saferin
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Steven M. Saferin
President and Chief Executive Officer
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