Form 8-K for GENERAL MAGIC INC filed on Apr 2 1999
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
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 30, 1999
GENERAL MAGIC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-25374 77-0250147
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
420 NORTH MARY AVENUE SUNNYVALE, CALIFORNIA 94086
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 774-4000
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Not applicable
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
On March 30, 1999, General Magic, Inc. (the "Company") issued and sold
to existing stockholders of the Company and an additional investor a total of
2,000 shares of its Series D Convertible Preferred Stock (the "Series D
Shares"), together with warrants to purchase 150,000 shares of the Company's
common stock at an exercise price of $5.078 per share (the "Warrants"), for an
aggregate purchase price of $20,000,000 (the "Series D Financing").
The Series D Shares will be convertible, at the option of the holder,
into common stock of the Company (the "Conversion Shares") at a conversion rate
equal to $10,000 plus accrued dividends divided by 110% of the average of the
closing bid prices during the ten consecutive trading days immediately after, at
the option of the Company, April 29, 1999, May 29, 1999 or June 28, 1999.
Subject to extension under certain circumstances, the Series D Shares will
automatically convert into shares of common stock on March 30, 2002, at a
conversion rate equal to $10,000 plus accrued dividends divided by the closing
bid price on that date, unless sooner converted or redeemed.
The number of shares of common stock into which the Series D Shares are
convertible is subject to adjustment (a "Reset") following the last day of each
September and March until March 30, 2002, and on December 31, 1999, and June 30,
2000, equal to 110% of the average of the closing bid prices of the Company's
common stock during the ten trading days immediately following each such date.
In addition, the conversion rate is subject to further adjustment in the event
the Company fails to satisfy various conditions. These conditions include, among
other things: (i) approval by the Company's stockholders of this transaction
pursuant to the rules of the Nasdaq Stock Market ("Nasdaq") for issuances of a
number of Conversion Shares which could potentially exceed 19.9% of the common
stock outstanding as of March 30, 1999, at conversion prices that are lower than
the market price of the common stock at March 30, 1999; and (ii) timely
registration with the Securities and Exchange Commission of the Conversion
Shares for resale.
The Series D Shares accrue dividends at a rate of 5% per annum, payable
quarterly either, at the Company's option, in cash or by adding such amount to
the liquidation value.
The Company may redeem the Series D Shares upon a consolidation, merger
or other business combination (a "Change of Control") at a price equal, subject
to limited exceptions, to 115% of the liquidation value. In the event that the
conversion price immediately after a Reset is less than 50% of the initial
conversion price, the Company may redeem the Series D Shares at liquidation
value. The holders may require the Company to redeem the Series D Shares upon
certain major transactions, including a Change of Control, at the greater of
125% of the liquidation value and the closing bid price on the date of the
announcement of any such transaction. In addition, the holders may require the
Company to redeem their Series D Shares at liquidation value upon certain
events, including, among other things: (i) failure to obtain stockholder
approval as required by Nasdaq; (ii) failure to maintain the registration of the
Conversion Shares for resale; or (iii) failure to maintain listing of the
Company's common stock on Nasdaq, AMEX or NYSE. If the Company fails to: (i)
timely file for registration of the Conversion Shares; (ii) use its best efforts
to maintain registration of the Conversion Shares; or (iii) to use its
reasonable best efforts to maintain the listing of its common stock on Nasdaq,
AMEX or NYSE, and in certain other events, the
holders of the Series D Shares may require redemption at 130% of the liquidation
value or in certain cases, at the greater of 130% of the liquidation value and
the market value.
The foregoing description of the Series D Financing is qualified in its
entirety by the Securities Purchase Agreement, dated as of March 30, 1999, and
the other agreements and instruments executed in connection therewith, copies of
which are attached as exhibits to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION. Not applicable.
(c) EXHIBITS.
Exhibit No. Description
3.1 Certificate of Designations, Preferences and Rights
of Series D Convertible Preferred Stock of the
Registrant, filed with the Secretary of State of
the State of Delaware on March 30, 1999.
4.1 Securities Purchase Agreement, dated as of March
30, 1999, by and among the Registrant and the
buyers listed on the Schedule of Buyers thereto.
4.2 Form of Warrant issued to holders of the Series D
Convertible Preferred Stock.
4.3 Registration Rights Agreement, dated as of March
30, 1999, by and among the Registrant and the
holders of the Series D Convertible Preferred
Stock.
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