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) August 14, 1998
Vanguard Airlines, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-27034 48-1149290
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
7000 Squibb Road, Third Floor, Mission, KS 66202
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code (913) 789-1388
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ITEM 5. OTHER EVENTS.
The Company issued a press release on August 14, 1998
announcing the exercise of 10,300,000 outstanding redeemable
common stock purchase warrants (the "Warrants"). Each Warrant
was exercisable into one share of the Company's Common Stock for
$0.50 per share. In July 1998, the Company issued a notice of
redemption to certain warrant holders after the Company's Common
Stock satisfied certain stock performance requirements contained
in the warrant agreement. The Company raised approximately $5.2
million for the exercise of the Warrants. The proceeds will be
used for general corporate purposes, principally to lease
additional jet aircraft, as suitable aircraft become available.
The press release also announced that in accordance with an
unrelated agreement, the Company also received a Notice of
Exercise from certain principal stockholders. The principal
stockholders will exercise warrants to purchase 12,094,480 shares
of Common Stock on a net exercise basis. Pursuant to the terms
of the warrants, the Company will issue 8,110,936 shares of
Common Stock in exchange for the exercise of 12,094,480 warrants.
The Company will not receive any proceeds in connection with this
net exercise.
A copy of the press release is attached hereto as Exhibit A.
After exercise of the Warrants, the number of shares of the
Company's Common Stock outstanding is 85,352,153. The Company
also has 302,362 outstanding shares of Convertible Preferred
Stock.
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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.
VANGUARD AIRLINES, INC.
Date: August 18, 1998 /s/ Robert J. Spane
By: Robert J. Spane
President and Chief Executive
Officer
Exhibit A
For Immediate Release August 14, 1998
Contact: Brian S. Gillman
(913) 789-1388
VANGUARD AIRLINES ANNOUNCES
WARRANT EXERCISE
Kansas City, MO - Vanguard Airlines, Inc. ("Vanguard" or the
"Company") announced today the exercise of 10,300,000 outstanding
redeemable common stock purchase warrants (the "Warrants"). Each
Warrant was exercisable into one share of the Company's Common
Stock for $0.50 per share. In July 1998, the Company issued a
notice of redemption to certain warrant holders after the
Company's Common Stock satisfied certain stock performance
requirements contained in the warrant agreement.
The Company raised approximately $5.2 million from the exercise
of these Warrants. Bill Garrett, Vanguard's Chief Financial
Officer, said, "The net proceeds from the warrant exercise will
be utilized to acquire a spare jet engine, to provide for fleet
expansion and for certain other capital projects. Overall, this
funding will provide Vanguard with the necessary capital to begin
its next growth phase."
Garrett added, "While the second quarter was Vanguard's first
ever profitable quarter, based on the advanced bookings the
Company has experienced to date, we anticipate the third quarter
to be even more favorable."
In accordance with an unrelated agreement, the Company received a
Notice of Exercise from certain principal stockholders. The
principal stockholders will exercise warrants to purchase
12,094,480 shares of Common Stock on a net exercise basis.
Pursuant to the terms of the warrants, the Company will issue
8,110,936 shares of Common Stock in exchange for the exercise of
12,094,480 warrants. The Company will not receive any proceeds
in connection with this net exercise.
The Company will have approximately 85,352,153 shares of Common
Stock outstanding following the exercise of the aforementioned
warrants. In addition, the Company has 302,362 outstanding
shares of Convertible Preferred Stock.
Vanguard Airlines, which began service in December 1994 and is
headquartered in Kansas City, is a low-fare, passenger airline
providing convenient, scheduled jet service. Vanguard serves the
following eight cities: Atlanta, Chicago-Midway, Dallas/Ft.
Worth, Kansas City, Minneapolis/St. Paul, Myrtle Beach and
Pittsburgh. The Company employs approximately 800 full-time
equivalent employees and currently operates a fleet of nine
Boeing 737-200's. For more information on Vanguard Airlines,
please visit our web site at www.flyvanguard.com
This press release contains forward-looking statements that
involve risks and uncertainties. Such forward-looking statements
are made based on management's belief, as well as assumptions
made by and information currently available to, management
pursuant to the "safe harbor" provisions of the Private
Securities Litigation reform Act of 1995. The Company's actual
results may differ significantly from those currently
anticipated. Factors that may cause such differences include but
are not limited to, general economic conditions, the cost of jet
fuel, the Company's ability to secure additional financing, the
occurrence of events involving other low-fare carriers, potential
changes in governmental regulation of airlines or aircraft,
aircraft availability and delivery issues and actions taken by
other airlines, particularly with respect to scheduling and
pricing in the Company's current or future routes.
