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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): May 19, 2000
CAPSULE COMMUNICATIONS, INC
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(Exact name of issuer as specified in charter)
Delaware 0-22944 23-3055962
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
2 Greenwood Square
3331 Street Road, Suite 275
Bensalem, Pennsylvania 19020
(Address of principal executive offices)
(215) 633-9400
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
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As previously reported in Capsule Communications, Inc.'s (the "Company")
Annual Report on Form 10-K for the year ended December 31, 1999, the Company
entered into loan agreements (the "Agreements") with Gold & Appel Transfer,
S.A., an affiliate of Walt Anderson who is a member of the Company's Board of
Directors ("G&A"), and the Foundation for the International Non-governmental
Development of Space ("FINDS" and, together with G&A, "Investors") pursuant to
which the Investors loaned an aggregate $1,500,000 to the Company. These
Agreements allow the Company to repay the amounts loaned plus accrued interest
by issuing shares of the Company's common stock ("Common Stock") to the
Investors. On May 19, 2000, the Company exercised its option to repay the
indebtedness under the Agreements and it will now issue to G&A and FINDS 666,667
and 333,333 shares of Common Stock, respectively, in full payment of the
outstanding principal of, and accrued interest on, the loans previously made by
Investors to the Company in the respective original principal amounts of $1.0
million and $500,000.
Also on May 19, 2000, the Company entered into an investment agreement with
the Investors pursuant to which the Investors jointly and severally agreed to
purchase from the Company additional shares of Common Stock in two installments
for an aggregate purchase price of $3.0 million. The first installment in the
aggregate amount of $1.5 million will be made on June 30, 2000, and the second
installment in the aggregate amount of $1.5 million will be made on or before
December 29, 2000, but in no event prior to September 29, 2000. On such dates,
the Company will issue to the Investors, in such proportions as Investors may
specify, a number of shares of Common Stock equal to the quotient (rounded so as
to avoid fractional shares) that results from dividing $1.5 million by the
higher of (i), with regard to the first installment date, the 30-trading day
average closing sale price of the Common Stock for the period ending at the
close of business on June 29, 2000, or, with regard to the second installment
date, the 30-trading day average closing sale price of the Common Stock for the
period ending at the close of business on the day prior to the investment and
(ii) $1.25.
ITEM 7. EXHIBITS
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10 Investment Agreement by and among Capsule Communications, Inc., and
Gold & Appel Transfer, S.A. and the Foundation for the International
Non-governmental Development of Space dated May 19, 2000.
99 Press Release
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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.
CAPSULE COMMUNICATIONS, INC.
/s/ David B. Hurwitz
_____________________________________
Date: May 24, 2000 By: David B. Hurwitz
President and Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
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<S> <C>
10 Investment Agreement by and among Capsule Communications, Inc.,
and Gold & Appel Transfer, S.A. and the Foundation for the
International Non-governmental Development of Space dated May 19,
2000.
99 Press Release
</TABLE>
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Exhibit 10
INVESTMENT AGREEMENT
This Investment Agreement is dated as of May 19, 2000 and is entered
into by and among Capsule Communications, Inc. (the "Company"), Gold & Appel
Transfer, S.A. ("G&A") and Foundation for the International Non-governmental
Development of Space ("FINDS" and, together with G&A, "Investors").
Intending to be legally bound, the parties hereto agree as follows:
1. On the date hereof, the Company shall issue to G&A and FINDS
666,667 and 333,333 shares of the Company's common stock ("Common Stock"),
respectively, in full payment of the outstanding principal of, and accrued
interest on, the loans previously made by G&A and FINDS to the Company in the
respective original principal amounts of $1.0 million and $500,000. Investors
acknowledge that the shares of Common Stock to be so issued to them pursuant to
this Paragraph 1 have not been registered under the Securities Act of 1933 of
any state securities laws, and are being acquired by them for their own account
for investment purposes and without a view to distribution.
2. Investors jointly and severally agree to purchase from the
Company additional shares of Common Stock in two installments for an aggregate
purchase price of $3.0 million, as follows:
a. On June 30, 2000, Investors will wire to the Company the
aggregate sum of $1.5 million, and in exchange therefor the Company will issue
to Investors, in such proportions as Investors may specify, a number of shares
of Common Stock equal to the quotient (rounded so as to avoid fractional shares)
that results from dividing $1.5 million by the higher of (i) the 30-trading day
average closing sale price of the Common Stock for the period ending at the
close of business on June 29, 2000 and (ii) $1.25.
b. On or before December on before 29, 2000, but in no event
prior to September 29, 2000 Investors will wire to the Company upon 10 days
prior notice from the Company, the aggregate sum of $1.5 million, and in
exchange therefor the Company will issue to Investors, in such proportions as
Investors may specify, a number of shares of Common Stock equal to the quotient
(rounded so as to avoid fractional shares) that results from dividing $1.5
million by the higher of (i) the 30-trading day average closing sale price of
the Common Stock for the period ending at the close of business the day prior to
the investment and (ii) $1.25.
3. Investors acknowledge that the shares of Common Stock that they
will acquire pursuant to Paragraph 2 will not have been registered under the
Securities Act of 1933 or any state securities laws, and represent and warrant
that they are acquiring such shares for their own account for investment
purposes and without a view to distribution.
4. The obligation of Investors and the Company under Paragraph 2 may
be terminated at the election of Investors or the Company in the event that the
Company is acquired, whether by merger or other business combination.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Capsule Communications, Inc.
By:/s/ David B. Hurwitz
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Name: David B. Hurwitz
Title: President & CEO
Gold & Appel Transfer, S.A.
By:/s/ Walt Anderson
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Name: Walt Anderson
Title: Power of Attorney
Foundation for the International Non-
governmental Development of Space
By:/s/ Walt Anderson
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Name: Walt Anderson
Title: President
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capsule communications, inc.
Exhibit 99
Contact: David B. Hurwitz, President & CEO
(215) 633-9400
Capsule Communications Converts $1.5M Debt to Equity
BENSALEM, Pa., [May 24, 200] Capsule Communications, Inc. (Nasdaq SmallCap:
"CAPS") announced today that it has converted $1,500,000 of notes payable by
issuing shares of common stock to two parties, Gold & Appel Transfer, S.A.
("G&A") and the Foundation for the International Development of Space ("FINDS"),
both organizations affiliated with Walt Anderson, a member of the Company's
Board of Directors. At $1.50 per share, the Company issued G&A and FINDS 666,667
and 333,333 shares of the Company's common stock respectively.
Additionally, the Company announced that it has entered into an Investment
Agreement with G&A and FINDS wherein the investors agreed to private placements
of $1,500,000 on or before June 30, 2000 and another $1,500,000 on or before
December 29, 2000, but in no event prior to September 29, 2000. The initial
$1,500,000 was received in March 2000 and is being used, as will the proceeds
from the future private placements, as working capital to provide for growth of
the Company.
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2 Greenwood Square, 3331 Street Road, Suite 275
Bensalem, PA 19020
telephone ~ 215-633-9400 ~~ fax ~ 215-244-3440
www.capsulecom.com
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