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: June 8, 1998
(Date of earliest event reported)
COMPU-DAWN, INC.
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(Exact name of Registrant as specified in charter)
Delaware 000-22611 11-3344575
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(State or other jurisdiction (Commission File No.) (IRS Employer Identification
of incorporation) Number)
77 Spruce Street, Cedarhurst, New York 11516
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 374-6700
1
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Item 5. Other Events.
On June 8, 1998, Compu-DAWN, Inc. issued a press release (the "Press
Release") announcing that it had completed a private placement of securities to
an investment fund to raise a gross amount of $5,000,000. The private placement
is more particularly described in the Press Release, which is attached hereto as
Exhibit 99.1
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
99.1 Press Release, dated June 8, 1998
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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.
COMPU-DAWN, INC.
Dated: June 15, 1998 By: /s/ Mark Honigsfeld
Mark Honigsfeld
Chairman of the Board
K:\WPDOC\CORP\COMPUDAW\SECFILE\8-KPRESS2.REL
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Exhibit 99.1
Contact: Mark Honigsfeld (516) 374-6700 Ext. 601
COMPU-DAWN COMPLETES FINANCING OF $5 MILLION
AND SECURES A PROPOSAL FOR AN ADDITIONAL $7 MILLION, TOTALING $12
MILLION
Cedarhurst, NY June 8, 1998 - Compu-DAWN, Inc. (NASDAQ:CODI) (the "Company")
today announced that it has completed a financing with an investment fund for a
private placement of $5 million. The offering consists of (i) 327,103
unregistered restricted shares of Common Stock at $5.35 per share, (ii) shares
of 5% Series A Convertible Preferred Stock which are convertible based on a
certain formula which at current market price should result in a conversion into
approximately 574,967 shares of Common Stock or a price of $5.65 per common
share, subject to a minimum conversion floor price of $5.00 per share if the
conversion formula at the time of conversion results in a lower price; and (iii)
five year warrants to purchase 90,207 shares of Common Stock at an exercise
price of $8.03 per share
The Company has granted the investor registration rights for the common stock
issued in the offering and underlying the preferred stock and warrants. The
securities offered were not registered under the Securities Act of 1933 and may
not be offered and sold without regulation or an applicable exemption from the
registration requirements.
The initial tranche of $5 million is expected to be utilized to fund the
Company's entrance into the Russian lottery business, which was previously
announced, and for working capital purposes. The investment fund has indicated
that subject to certain conditions, the remaining $7 million will be funded in
concert with the "roll-out" of the lottery program which is expected to begin in
Moscow within six months. Subsequent stages of financing may be made under
substantially similar terms and are based on the market conditions, however, the
parameters and terms of such financing have not been determined.
Commenting on the financing, Mark Honigsfeld, Chairman and CEO, noted "The
substantial funds now available to the Company and the proposal to provide
additional capital as we grow into the lottery business, allows us immediate
access to the Russian lottery and perhaps into other lottery opportunities which
the Company has recently been exploring. We have been following the progress of
other companies in the lottery business such as GTECH (NYSE:GTK), Autotote
Corporation (ASE:TTE), Scientific Games (NYSE:SG) and ILTS (NASDAQ:ITSI) and
believe that based on both internally generated financial forecasts and on
independent analysis by a well known investment banking firm, our proposed
acquisition of 50% ownership in Press-loto, the operator of the first national
lottery in Russia, will be of substantial value to our shareholders. We are
extremely anxious to begin our efforts in Moscow as soon as practical and to
begin implementation on our new vision; to become a premier player in the
lucrative niche market of privatized national lottery businesses in emerging
markets and in third world countries."
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Compu-DAWN presently intends to continue pursuing the public safety software and
wireless data communication business and may utilize some of its current
products and experience in the wireless data communications segment for this new
Russian lottery venture.
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This press release may include certain forward-looking statements about the
Company that are based on management's current expectations. Actual results may
differ materially as a result of any one or more of the risks identified in the
Company's filings under the Securities and Exchange Act of 1934.
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