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): July 22, 1998
INFONAUTICS, INC.
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(Exact name of registrant specified in Charter)
Pennsylvania 0-28284 23-2707366
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(State or other (Commission IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
900 West Valley Road, Suite 1000
Wayne, Pennsylvania 19087
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(Address of principal executive offices) Zip Code
Registrant's telephone, including area code: (610) 971-8840
(not applicable)
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(Former name and former address, if changed since last report)
Item 5. Other Events.
On July 22, 1998, Infonautics, Inc. (the "Company") entered
into a Securities Purchase Agreement with RGC International Investors, LDC
("RGC") under which it agreed to issue up to 5,000 shares of Series A
Convertible Preferred Stock with a stated value of $1,000 per share (the "Series
A Preferred Stock") for an aggregate of $5 million in cash.
Each share of Series A Preferred Stock is convertible into the
number of shares of the Company's Class A common stock (the "Common Stock")
equal to (i) the stated value ($1,000) plus a premium of 5% per annum of the
stated value from the date of issuance of the Series A Preferred Stock divided
by (ii) the Conversion Price. The Conversion Price is equal to the lesser of (i)
the average of the closing bid prices on the Nasdaq National Market ("Nasdaq")
for any five consecutive trading days during either (A) the twenty trading day
period ending one trading day prior to the date that the conversion notice is
sent by a holder to the Company on or before 240 days following the issue date
and (B) the thirty trading day period ending one trading day prior to any
conversion date occurring after 240 days after the issue date, or (ii) the
dollar amount which represents 150% of the average of the closing bid prices
over the 5 trading days immediately preceding the first closing date or, in the
case of any subsequent closing, 130% of the average of the closing bid prices
over the 5 trading days immediately preceding the subsequent closing.
The holders of the Series A Preferred Stock are subject to
limits on the number of shares they can convert at any one time. Unless the
trading price of the Common Stock on Nasdaq on the date of conversion is greater
than or equal to either (i) 120% of the average of the closing bid prices for
any five consecutive trading days during either (A) the twenty trading day
period ending one trading day prior to the date that the conversion notice is
sent by a holder to the Company on or before 240 days following the issue date
and (B) the thirty trading day period ending one trading day prior to any
conversion date occurring after 240 days after the issue date or (ii) the dollar
amount which represents 150% of the average of the closing bid prices over the 5
trading days immediately preceding the first closing date or, in the case of
subsequent closing, 130% of the average of the closing bid prices over the 5
trading days immediately preceding the subsequent closing, and in certain other
limited situations, the following limits apply: Prior to January 22, 1999, the
Series A Preferred Stock may not be converted; beginning on January 23, 1999,
each holder of Series A Preferred Stock may convert up to 25% of its initial
holding of Series A Preferred Stock into Common Stock; beginning on February 23,
1999, it may convert up to 50% of its initial holding into Common Stock;
beginning on March 23, 1999, it may convert up to 75% of its initial holding;
beginning on April 23, 1999, it may convert up to 100% of its initial holding.
The Company also issued to RGC five year warrants to purchase
200,000 shares of Common Stock at a purchase price, subject to adjustment, equal
to 150% for half of the warrants, and 130% for the other half, of the average
closing bid price of the Company's common stock during specified periods.
The Company has agreed to register under the Securities Act of
1933 the resale of the Common Stock to be issued upon conversion of the Series A
Preferred Stock or exercise of the warrants.
The Certificate of Designations of the Series A Preferred
Stock, Securities Purchase Agreement and Registration Rights Agreement are filed
as exhibits to this Current Report on Form 8-K. This summary description of the
transaction is qualified in its entirety by reference to the documents filed as
exhibits hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
The following are filed as exhibits to this Current Report on Form 8-K:
99.1 Statement with Respect to Shares for Series A Convertible
Preferred Stock of Infonautics, Inc.
99.2 Securities Purchase Agreement, dated as of July 22, 1998, between
Infonautics, Inc. and RGC International Investors, LDC.
99.3 Registration Rights Agreement, dated as of July 22, 1998, between
Infonautics, Inc. and RGC International Investors, LDC.
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.
INFONAUTICS, INC.
By: /s/ David Van Riper Morris
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David Van Riper Morris
President and Chief Executive Officer
Dated: July 22, 1998
Exhibit Index
Exhibit
99.1 Statement with Respect to Shares for Series A Convertible Preferred
Stock of Infonautics, Inc.
99.2 Securities Purchase Agreement, dated as of July 22, 1998 between
Infonautics, Inc. and RGC International Investors, LDC.
99.3 Registration Rights Agreement dated as of July 22, 1998 between
Infonautics, Inc. and RGC International Investors, LDC.