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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): December 5, 1997
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Global Diamond Resources, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 0-21635 33-0213535
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
836 Prospect Street, Suite 2B, La Jolla, California 92037
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 459-1928
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
Not applicable.
Item 2. Acquisition or Disposition of Assets.
Not applicable.
Item 3. Bankruptcy or Receivership.
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not applicable.
Item 5. Other Events.
On December 5, 1997, the Company entered into a Securities Purchase
Agreement with a large privately-held Middle Eastern investor conglomerate with
multi-national operations ("MEIC") pursuant to which the MEIC has invested
$4,600,000 in the Company with a commitment to advance an additional $1,400,000
subject to the fulfillment of certain conditions. Under the terms of the
Agreement, the MEIC purchased 3,525,241 common shares of the Company for the
purchase price of $3,000,000. In addition, the MEIC agreed to lend the Company
up to $3,000,000 pursuant to a Secured Convertible Promissory Note in the
original principal amount of $3,000,000 issued by a wholly-owned offshore
subsidiary of the Company. To date, the MEIC has advanced $1,600,000 under the
Note to the Company's subsidiary and has agreed to advance the balance of
$1,400,000 at such time as the Company acquires all necessary permits under
South African law to mine its Caerwinning property. The Note issued to the MEIC
is secured by 100% of the stock of the Company's South African subsidiary,
Global Diamond Resources (SA) (Pty) Limited, which holds all of the Company's
mining properties, plant and equipment.
Made part of the report is a pro forma consolidated balance sheet of the
Company as of September 30, 1997 which gives effect to the consummation of the
transactions with the MEIC.
Under the terms of the Note, the outstanding principal accrues interest at
a rate of 15% per year, payable in bi-annual installments, with all principal
and interest due within five years from the date of the Note. The principal and
interest under the Note is convertible in to a maximum of 903,908 common shares
of the Company at the rate of $.85 per share. The Note does not contain any
penalties for prepayment, however the Note does include certain negative and
affirmative financial and operational covenants on the part of the Company. In
addition to the foregoing, the MEIC received warrants to purchase up to 403,926
shares of Common Stock at prices ranging from Cdn$.75 to US$.75. The Company
will use the proceeds from the financing to further its mining operations in
South Africa.
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The Company has agreed to expand its Board of Directors to nine members and
appoint three nominees of the MEIC to the Board. The Company also intends to
establish a five member Executive Committee and appoint two nominees of the MEIC
to the Committee.
The Company also announced that the Board of Directors has approved a two
for one forward split of the outstanding common shares of the Company and a
change in its authorized common stock from 25 million shares of $.001 par value
common stock to 50 million shares of $.0005 common stock. The change in the
authorized capital stock did not require the approval of the stockholders of the
Company under the Nevada General Corporation Law. The effective time of the
split will be 5:00 p.m. (PST) on December 19, 1997.
This report contains forms of forward-looking statements that are based on
the Company's beliefs as well as assumptions made by and information currently
available to the Company. Such statements are subject to certain risks,
uncertainties and assumptions, which are identified and described in the
Company's periodic reports with the Securities and Exchange Commission,
including lack of significant operating history, lack of proven or probable
reserves, the speculative nature of miming activities, political instability,
general miming risks and general domestic and international economic conditions
and the Company's continued access to capital. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results will vary materially from those anticipated,
estimated, or projected and the variations may be material.
Item 6. Resignations of Registrant's Directors.
Not applicable.
Item 7. Financial Statements and Exhibits.
Not applicable.
Item 8. Change in Fiscal Year.
Not applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On November 25, 1997, the Company issued 391,010 shares of its common stock
to four (4) parties in consideration of consulting services rendered and in
payment of finders fees in connection with certain investment transactions. On
the same date, the Company also issued 349,000 shares of common stock upon the
exercise of outstanding common stock purchase warrants. In addition, the
Company issued on the same date 465,112 shares of common stock upon the
conclusion of its private placement to five (5) Canadian investors, which
included 32,340 shares issued to a finder in connection with such financing.
All of the shares were issued pursuant to Regulation S under the Securities Act
of 1933. Except as described herein, there were no underwriters involved in any
of the issuances described herein.
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Global Diamond Resources, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
September 30, 1997
Set forth below is a pro forma consolidated balance sheet of Global Diamond
Resources, Inc., a Nevada corporation (the "Company"), which gives effect to the
Company's consummation of its investment transaction described in Item 5 above.
<TABLE>
<CAPTION>
ASSETS
Funding
9/30/97 (Note 1) Pro Forma
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<S> <C> <C> <C>
Current Assets
Cash & cash equivalents $ 88,292 4,600,000 4,688,292
Accounts receivable 37,893 37,893
Marketable security available for sale 22,500 22,500
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148,685 4,600,000 4,748,685
Fixed assets, net 994,593 994,593
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Total Assets $ 1,143,278 4,600,000 5,743,278
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 42,059 42,059
Long Term Liability 1,600,000 1,600,000
Stockholders' Equity
Common stock 6,425 3,525 9,950
Additional paid-in capital 2,625,809 2,996,475 5,622,284
Common stock subscription received 792,204 792,204
Accumulated deficit (2,296,126) (2,296,126)
Cumulative translation deficit (27,093) (27,093)
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1,101,219 3,000,000 4,101,219
Total Stockholders' Equity and Liabilities $ 1,143,278 4,600,000 5,743,278
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</TABLE>
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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.
Global Diamond Resources, Inc.
(Registrant)
Date: December 17, 1997 By: /s/ Mervyn McCulloch
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Mervyn McCulloch, Chief Financial Officer
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