SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) March 31, 1998
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COMPUMED, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-14210 95-2860434
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(State or other jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification
No.)
1230 Rosecrans Avenue, Suite 1000
Manhattan Beach, California 90266
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Address of principal executive offices) (zip code)
Registrant's telephone number, including area code - (310) 643-5106
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ITEM 5. OTHER EVENTS
On March 31, 1998, CompuMed, Inc. (the "Company") closed the
last placement in a series of three related placement of its
Class C 7% Convertible Preferred Stock (the "Class C Preferred
Stock") in which it sold a total of 35,000 shares Class C
Preferred Stock at a purchase price of $100 per share, or an
aggregate purchase price of $3,500,000. The Class C Preferred
Stock was issued in two series, the Series 1 Class C 7%
Convertible Preferred Stock (the "Series C-1 Preferred Stock")
and the Series 2 Class C 7% Convertible Preferred Stock (the
"Series C-2 Preferred Stock). A placement 17,500 shares of the
Series C-1 Preferred Stock closed December 24, 1997 (the
"December Placement"). The first placement of 8,750 shares of
Series C-2 Preferred Stock closed on January 22, 1998 (the
"January Placement"). On March 31, 1998, the Company placed an
additional 8,750 shares of Series C-2 Preferred Stock (the "March
Placement").
The Series C-1 Preferred Stock is immediately convertible
into shares of the Company's Common Stock at a conversion ratio
equal to $100 divided by the lesser of (i) $1.51, the average
closing bid price of the Common Stock for the ten consecutive
trading days prior to the closing date for the December Placement
or (ii) 75% of the average closing bid price for the ten
consecutive trading days prior to the notice of conversion. The
Company has the right to force conversion of any or all
outstanding shares of Series C-1 Preferred Stock on November 30,
1999 at the then conversion ratio.
The Series C-2 Preferred Stock is identical to the Series C-
1 Preferred Stock except that (a) the conversion ratio is equal
to $100 divided by the lesser of (i) $1.34, the average closing
bid price of the Common Stock for the ten consecutive trading
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days prior to closing date for the January Placement, or (ii) 80%
of the average closing bid price for the ten consecutive trading
days prior to the notice of conversion (except that the
applicable percentage is 77.5% for 2,500 shares of Series C-2
Preferred Stock sold in the January Placement for which the
Company received full payment before December 31, 1997), and (b)
the Company has the right to force conversion on December 31,
1999.
Upon conversion of the Class C Preferred Stock, the holder
will receive warrants (the "Warrants") to purchase the same
number of shares of Common Stock as are being issued on the
conversion, at an exercise price equal to the conversion price
and exercisable for three years from issuance.
In the event the closing bid price of the Common Stock is
less than $1.00 per share on the trading day immediately
preceding the receipt of a conversion notice for Class C
Preferred Stock, the holder requesting conversion would be
limited to converting not more than 5% of the shares of the
Series C-1 or Series C-2 Preferred Stock he initially purchased,
which limitation would continue for a period of 30 days. There
is no minimum conversion price for the Class C Preferred Stock.
Should the market price of the Common Stock fall substantially
prior to conversion, the holders of the Class C Preferred Stock
could obtain a significant share of the Common Stock upon their
conversions of the Class C Preferred Stock and through exercise
of the corresponding Warrants.
As a condition to the closing of the placement of the Series
C-1 Preferred Stock, the Company entered into a Registration
Rights Agreement with each purchaser agreeing to file a
registration statement with the Securities and Exchange
Commission (the "Commission") covering the Common Stock
underlying his Class C Preferred Stock and the Warrants. The
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Company filed such a registration statement on January 23, 1998
(Registration No. 333-44805), which registration statement was
declared effective by the Commission on February 6, 1998.
The net proceeds from the March Placement was approximately
$836,500 (after payment of a 4% fee to the distributor and other
placement expenses). The net proceeds from the December
Placement and the January Placement were approximately $1,660,000
and $840,000, respectively. The Company is using the net
proceeds from the placements for on-going research and
development activities and general working capital.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
3.1 Certificate of Designation for the Class C 7%
Convertible Preferred Stock, filed with the Secretary
of State of Delaware on December 11, 1997
[Incorporated by reference to Exhibit 3.1 to the
Company's Form 8-K for an event of December 24, 1997]
3.2 Certificate of Correction for the Class C 7%
Convertible Preferred Stock, filed with the Secretary
of State of Delaware on December 24, 1997
[Incorporated by reference to Exhibit 3.2 to the
Company's Form 8-K for an event of December 24, 1997]
10.1 Form of Securities Purchase Agreement for the sale of
Class C 7% Convertible Preferred Stock (without
annexes) [Incorporated by reference to Exhibit 10.1 to
the Company's Form 8-K for an event of December 24,
1997]
10.2 Form of Warrant Agreement [Incorporated by reference to
Exhibit 10.2 to the Company's Form 8-K for an event of
December 24, 1997]
10.3 Form of Registration Rights Agreement [Incorporated by
reference to Exhibit 10.3 to the Company's Form 8-K for
an event of December 24, 1997]
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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.
Date: April 3, 1998
COMPUMED, INC.
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(Registrant)
/s/ James Linesch
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James Linesch
President
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