SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):
May 6, 1998
Global Media Corp.
(Exact Name of Registrant as Specified in Its Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
0-23491 91-1842480
(Commission File Number) (IRS Employer Identification No.)
83 Victoria Crescent, Nanaimo, BC Canada V9K 5B9
(Address of Principal Executive Offices) (Zip Code)
(250) 716-9949
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On May 6, 1999, Global Media Corp. (the "Company") issued a Convertible
Debenture in the original principal amount of $8,500,000 (the "Debenture") to
RGC International Investors, LDC (the "Investor"). In connection with issuance
and sale of the Debenture, the Investor was also issued five year warrants to
purchase 680,000 shares of Common Stock at a purchase price of $8.4375 (135% of
the three day average ending April 30, 1999, the date the Investor committed to
the investment) (the "Warrants"). The Debenture and Warrants were sold pursuant
to a Securities Purchase Agreement between the Company and the Investor, in a
private placement pursuant to Regulation D under the Securities Act of 1933, as
amended.
The principal and accrued interest (at the rate of 5% per annum) of the
Debenture is convertible from time to time into shares of the Company's Common
Stock based upon the lesser of a fixed conversion price of $8.125 (130% of the
three day average ending April 30, 1999, the date the Investor committed to the
investment) or a variable conversion price equal to 100% of the future market
price of the Common Stock at the time of conversion. The fixed conversion price
and the applicable percentage of the future market price are subject to
adjustment if the Company's Common Stock is not listed on the Nasdaq National
Market or Nasdaq SmallCap Market by November 6, 1999. The holder of the
Debenture also has the option, exercisable simultaneously with the conversion of
the Debenture into Common Stock from time to time, to purchase an equal number
of additional shares of Common Stock at a per share price equal to the
conversion price in effect at the time of conversion of the Debenture (the
"Investment Options"). The exercise in full of the Investment Options could
result in an additional $8,500,000 being invested by the Investor, for a total
of $17,000,000. To the extent not previously converted, the Debenture will
automatically convert into Common Stock on May 6, 2002.
Under certain circumstances, including shareholder approval of articles of
amendment to the Company's Articles of Incorporation authorizing 100,000,000
shares of preferred stock and authorizing the Board of Directors to designate
the number and the rights, preferences, privileges and restrictions of the
preferred stock from time to time in series, the Debenture is convertible at the
option of the Company into Series A Convertible Preferred Stock (the "Series A
Preferred Stock"). The terms of the Series A Preferred Stock, which will be set
forth in a Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock, will be substantially the same as the terms of the
Debenture and will provide the holders of the Series A Preferred Stock the same
Investment Options described above.
Neither the Debenture nor, if issued, the Series A Preferred Stock have voting
rights, except that the holders of the Series A Preferred Stock will have voting
rights with regard to issues directly affecting the Series A Preferred Stock as
a class. Under certain circumstances, the Debenture or the Series A Preferred
Stock may become redeemable, mandatorily or at the option of the Investor
(depending on the applicable circumstance).
Pursuant to a Registration Rights Agreement entered between the Company and the
Investor, the Company is obligated to file with the Securities and Exchange
Commission, no later than June 21, 1999, a Registration Statement on Form SB-2
or S-1 to register for resale the shares of the Company's Common Stock which may
be acquired upon conversion of, and exercise of the
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Investment Options relating to, the Debenture or shares of Series A Preferred
Stock, as applicable, and upon exercise of the Warrants.
The Company's press release announcing the sale of the Convertible Debenture, as
well as the Securities Purchase Agreement dated as of May 6, 1999 between the
Company and the Investor, the Debenture, the Certificate of Designations, the
Registration Rights Agreement and the Warrant 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
99.1 Securities Purchase Agreement dated May 6, 1999 by and among Global
Media Corp. and RGC International Investors, LDC.
99.2 Convertible Debenture dated May 6, 1999 from Global Media Corp., as
Borrower, to RGC International Investors, LDC, as Holder.
99.3 Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of Global Media Corp.
99.4 Stock Purchase Warrant dated May 6, 1999 from Global Media Corp. to
RGC International Investors, LDC.
99.5 Registration Rights Agreement dated May 6, 1999 by and among Global
Media Corp. and RGC International Investors, LDC.
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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.
Global Media Corp.
(Registrant)
Date: May 18, 1999 By: /s/ L. James Porter
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L. James Porter
Chief Financial Officer
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