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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.
June 19, 1998
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Date of Report
(Date of Earliest Event Reported)
eSoft, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 00-23527 84-0938960
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(State or other jurisdiction of Commission I.R.S. Employer I. D
incorporation or organization) File Number Number
5335 Sterling Dr., Suite C Boulder, Colorado 80301
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (303) 444-1600
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ITEM 5. OTHER EVENTS AND SALE OF EQUITY SECURITIES.
On June 15, 1998, eSoft completed the private placement of 1,468,941
shares of its common stock at a price of $4.25 per share for a total offering of
$6,243,000. The offering was placed through C.M. Oliver & Company Ltd. of
Vancouver, B.C. (the "Agent"), which acted as agent in the offering, with the
participation of other sub-agents and finders. The net cash proceeds to the
Company from the private placement were approximately $5,508,000 after payment
of expenses of the offering, estimated at $227,000, and payment of $507,825
(8.13% of the offering price) commissions to the Agent, sub-agents, and finders
who will also be issued warrants to purchase 159,318 (10.85% of the offered
shares) of eSoft's common stock at a price of US $4.25 in the first year and US
$4.90 in the second year. Shares were sold in the offering to investors in
Canada and Europe in reliance upon the exemption from registration of the shares
under Regulation S under the Securities Act of 1933 (the "Act") (see Item 9,
below), and to accredited investors in the United States in reliance upon
Regulation D (Rule 505) under the Act.
The shares issued in the private placement are eligible for the
shortened hold period of four months in British Columbia pursuant to the
requirements of BOR #97112 of the B.C. Securities Commission. eSoft has agreed
to register the shares as soon as practicable under the U.S. Securities Act of
1933 for public sale in the United States.
Approximately $3,000,000 of the net proceeds from the private placement
is expected to be used to finance increases in accounts receivable and
inventory, $1,000,000 is allocated for marketing, sales and administrative
expenses, and the balance of the proceeds, approximately $1,500,000, will be
added to working capital.
In the event that the proceeds of the offering, together with cash flow
from operations, if any, is insufficient to meet all of the expenses to which
the proceeds have been allocated, the company will be required to re-evaluate
its planned expenditures and allocate its total resources in such manner as the
Board of Directors and management deems to be in the best interest of eSoft in
accordance with applicable regulatory requirements. Moreover, the Board of
Directors and management may, for business reasons, reallocate funds among these
or other uses in order to achieve the company's operating objectives eSoft in
accordance with applicable regulatory requirements.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
As reported under Item 5, above, on June 15, 1998, eSoft
completed a private placement of Common Stock. A portion of the shares sold in
the private placement were not registered under the Act in reliance upon
Regulation S under the Securities Act of 1933, as follows:
1. On June 15, 1998, 692,000 shares (the "Reg S Shares") of Common
Stock were sold to investors in Canada and Europe who were not U.S. Persons in
reliance upon Regulation S.
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2. The Reg S Shares were placed through C.M. Oliver and Company Ltd. of
Vancouver, B.C., which acted as agent in the offering.
3. The total offering price of the Reg S Shares was $2,941,000.
Commissions totaling $260,175 were paid to the Agent and a finder who assisted
the Agent, and they will also be issued warrants to purchase 81,624 shares of
eSoft Common Stock at a price of U.S.
$4.25 in the first year and U.S. $4.90 in the second year.
4. The Reg S Shares were sold in reliance upon Regulation S based upon
the fact that all sales were made outside the United States, all investors were
non-U.S. Persons and investors all agreed not to resell the Reg S Shares into
the U.S. or to U.S. Persons for at least one year except pursuant to an
effective registration statement under the Act or an applicable exemption from
such registration and the certificates representing the Reg S shares bear a
legend calling attention to such restrictions.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
eSoft, Inc.
Date: June 19, 1998 By: /s/ Thomas Tennessen
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Thomas Tennessen
Chief Financial Officer
