Focus Enhancements Inc - Current report filing (8-K)
08 July 2008 - 6:33AM
Edgar (US Regulatory)
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) June 30, 2008
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FOCUS
ENHANCEMENTS, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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1-11860
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04-3144936
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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1370
Dell Avenue, Campbell, CA
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95008
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_______________________________________________________________________
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______________________________
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s telephone number,
including area code
(408) 866-8300
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NA
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(Former
name or former address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant
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As
previously disclosed in Item 1.01 of Form 8-K filed on February 15, 2008, which
disclosure is incorporated herein by reference, Focus Enhancements, Inc. (the
“Company”) entered into an Amended and Restated Senior Secured Note Purchase
Agreement (the “Amended Agreement”). The Amended Agreement increased the amount
outstanding under secured notes by $9.3 million to a total of $20.8 million
(“Notes”). The Notes mature on January 1, 2011 and
initially bear interest at a 12% annual rate, increasing to 15% on
October 1, 2008, with payment dates on June 30 and December 30 of
each year the Notes remain outstanding. The Amended Agreement provides that the
Company may, at its sole option, elect to pay interest due on June 30, 2008 and
December 30, 2008 in cash or by issuing additional Notes and warrants for the
full amount of such interest payment, and the holders of such Notes previously
agreed under the Amended Agreement to be contractually bound to accept such
additional Notes in lieu of a cash interest payment.
On
June 30, 2008, the Company issued an additional $1,098,371 in Notes and
1,372,963 warrants (“Warrants”) to purchase the Company’s common stock in lieu
of a cash interest payment due on June 30, 2008 to fulfill its contractual
commitment under the Amended Agreement. The Warrants are exercisable at the
option of the holder at any time at the initial exercise price of $0.80 per
Warrant share for one share of Company’s common stock subject to standard
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions. Additionally, with some exceptions,
if the Company subsequently issues equity in a transaction, the primary purpose
of which is raising capital, and the equity is issued on a common stock
equivalent per share basis at less than $0.80/share, then the Warrant exercise
price shall be adjusted to the greater of (i) the same price at which such
equity was issued or (ii) $0.35 per share.
The
Warrants are redeemable as follows. Beginning January 1, 2009, if the
average closing price of the Company’s common stock is above $1.30 for 30
calendar days, the Company may repurchase the Warrants for one cent ($0.01) in
tranches of up to 2.6 million Warrants every 30 days, subject to certain other
conditions, inclu
din
g the exercise of such Warrants by
the holders thereof prior to the repurchase date.
The
Notes are redeemable, in whole or in part, at any time at the Company’s option
upon 30 days’ prior written notice to the Note holders, at a redemption price
equal to 100% of the principal amount of the Notes then outstanding plus accrued
and unpaid interest.
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Item
3.02
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Unregistered
Sales of Equity Securities
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The
disclosure provided in Item 2.03 of this Form 8-K is hereby incorporated by
reference with respect to the terms and sale of the Notes and Warrants.
The sale of the Notes and Warrants was made pursuant to
Section 4(2) of the Securities Act of 1933, as amended and Regulation
D promulgated thereunder, based in part on the representations made by the
Purchasers therein.
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.
FOCUS ENHANCEMENTS, INC.
Date: July 7,
2008
By:
/s/
Gary L.
Williams
Gary L.
Williams
Vice
President of Finance and Chief Financial
Officer
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