UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) June 30, 1997
(July 14, 1997)
COMTEC INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
New Mexico 0-12116 75-2456757
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of Incorporation)
10555 E. Bethany Drive, Aurora, Co. 80014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 627-
8367
This Document consists of 8 pages
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Item 5. Other Events
On June 30, 1997 ComTec International, Inc. (the "Company")
converted One Million Five Hundred Thousand Dollars ($1,500,000) of
debt financing into equity by issuing 15,625,000 shares of the .001
par value common stock of the Company and 15,625,000 warrants to
purchase an additional 15,625,000 shares of the .001 par value
common stock of the Company in conversion of a $1,500,000
Debenture originally issued to Geneva Reinsurance Company, Ltd., a
corporation organized outside of the United States of America.
Prior to issuance of the Convertable Debenture, Geneva Reinsurance
Company, Ltd. had no affiliation with the Company. In conjunction
with the conversion of the debt financing, the Company also issued
485,445 shares of the .001 par value common stock of the Company
and 485,445 warrants to purchase an additional 485,445 shares of
the .001 par value common stock of the Company in conversion of
$46,603 of interest payable on the debenture and 5,104,166 shares
of the .001 par value common stock of the Company and 5,104,166
warrants to purchase an additional 5,104,166 shares of the .001 par
value common stock of the Company in conversion of fees payable by
the Company related to the aquisition of giant LED screens and the
original debenture funding. All of said warrants are exercisable
at any time during a three year period following issuance of the
warrants at an exercise price of $.90 per share. All of the total
of 21,214,611shares and 21,214,611 warrants were issued to entities
organized outside of the United States of America and entities and
persons who are not residents of the United States of America.
Exhibits
5.1 Form of Warrant Agreement
SIGNATURES
ComTec International, Inc.
(Registrant)
Date: July 11, 1997
s/s Donald G. Mack
______________________________
Donald G. Mack - Authorized Officer
Treasurer, and President.
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Exhibit 5.1 Form 8-K ComTec International, Inc.
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER
MANNER TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
SECURITIES ACT OF 1933 AND THE TERMS AND CONDITIONS HEREOF. THE
HOLDER OF THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH.
WARRANT TO PURCHASE COMMON STOCK
OF
COMTEC INTERNATIONAL, INC.
______________ Shares
VOID AFTER 5:00 P.M. DENVER, COLORADO TIME, June 30th, 2000
FOR VALUE RECEIVED, ComTec International, Inc., a corporation
organized under the laws of the State of New Mexico (the
"Company"), promises to issue in the name of, sell and deliver to
_________________________ (the "Holder"), a certificate or
certificates for ________________________________ (___________) of
its fully paid and non-assessable Shares of Common Stock, $.001 par
value per Share (the "Shares"), at any time on or after July 1,
1997 and prior to 5:00 p.m. Denver, Colorado time on June 30, 2000
(the "Expiration Date"), upon payment therefor of ninety cents
($.90) per Share in lawful funds of the United States of America,
such amounts (the "Basic Exercise Price") being subject to
adjustment in the circumstances set forth hereinbelow. This
applicable Basic Exercise Price, until such adjustment is made and
thereafter as adjusted from time to time, is called the "Exercise
Price.
THIS WARRANT MAY NOT BE ASSIGNED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE ENCUMBERED OR DISPOSED OF BY THE HOLDER,
EXCEPT BY THE HOLDER'S EXERCISE HEREOF AS SET FORTH HEREIN
FOLLOWING DUE REGISTRATION UNDER APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR ESTABLISHMENT OF THE AVAILABILITY OF AN
EXEMPTION THEREFROM (AT WHICH TIME SAID TRANSFEREE SHALL BE DEEMED
THE "HOLDER" HEREUNDER).
1. Exercise of Warrant. In case the Holder of this
Warrant shall desire to exercise this Warrant in whole or in part,
the Holder shall surrender this Warrant, with the form of exercise
notice on the last page hereof duly executed by the Holder, to the
Company accompanied by payment of the Exercise Price.
This Warrant may be exercised in whole or in part, but not for
a fractional Share. In case of the exercise in part only, the
Company will deliver to the Holder a new Warrant of like tenor in
the name of the Holder evidencing the right to purchase the number
Shares of Common Stock as to which this Warrant has not been
exercised. This Warrant, at any time prior to the exercise hereof,
upon presentation and surrender to the Company may be exchanged,
alone or with other Warrants of like tenor registered in the name
of the same Holder, for another Warrant or other Warrants of like
tenor in the name of such Holder exercisable for the same aggregate
number of Shares of Common Stock as this Warrant or Warrants
surrendered.
2. Stock Dividends, Reclassifications, Reorganizations,
Anti-Dilution Provisions. This Warrant is subject to the
following further provisions:
(a) In case, prior to the expiration of this Warrant
by exercise or by its terms, the Company shall issue any Shares of
its Common Stock as a stock dividend or subdivide the number of
outstanding Shares of Common Stock into a greater number of Shares
then, in such case, the Exercise Price per Share of the Shares
purchasable pursuant to this Warrant in effect at the time of such
action shall be proportionately reduced and the number of Shares at
that time purchasable pursuant to the Warrant shall be
proportionately increased; and conversely, in the event the Company
shall contract the number of outstanding Shares of Common Stock
combining such Shares into a smaller number of Shares then, in such
case, the Exercise Price per Share of the Shares then purchasable
pursuant to this Warrant in effect at the time of such action shall
be proportionately increased and the number of Shares at that time
purchasable pursuant to the Warrant shall be
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proportionately decreased. If the Company shall, at any time
during the life of this Warrant, declare a dividend payable in cash
on its Common Stock and shall at substantially the same time offer
to its stockholders generally a right to purchase new Shares of
Common Stock from the proceeds of such dividend or for an amount
substantially equal to the dividend, all Shares of Common Stock so
issued shall, for the purpose of this Warrant, be deemed to have
been issued as a stock dividend. Any dividend paid or distributed
upon the Common Stock in Shares of any other class of securities
shall be treated as a dividend paid in Common Stock to the extent
that Shares of Common Stock are issuable upon the conversion
thereof.
(b) In case, prior to the expiration of this Warrant
by exercise or by its terms, the Company shall be recapitalized by
reclassifying its outstanding Common Stock, $.01 par value per
Share into Shares with a different par value, or shall thereafter
reclassify any such Shares in a like manner (any such Shares being
included within the meaning of "Common Stock" as used in this
Warrant), or the Company or a successor corporation shall
consolidate, or merge with or convey all or substantially all of
its, or all or substantially all of any successor corporation's
property and assets to any other corporation or corporations (any
such corporation being included within the meaning of the term
"successor corporation" hereinbefore used in the event of any
consolidation or merger of any such corporation with, or the sale
of all or substantially all of the property of any such corporation
to another corporation or corporations), the Holder of this Warrant
shall thereafter have the right to purchase pursuant to and on the
terms and conditions and during the time specified in this Warrant,
in lieu of the Shares purchasable upon the exercise of this
Warrant, such Shares of Common Stock, securities or assets as may
be issued or payable with respect to, or in exchange for, the
number of Shares theretofore purchasable upon the exercise of this
Warrant had such recapitalization, consolidation, merger or
conveyance not taken place; and, in any such event, the rights of
the Holder of this Warrant to an adjustment in the number of Shares
purchasable upon the exercise of this Warrant as herein provided,
shall continue and be preserved in respect to any Shares,
securities or assets which the Holder of this Warrant becomes
entitled to purchase.
(c) Upon the occurrence of each event requiring an
adjustment of the Exercise Price and of the number of Shares
purchasable pursuant to this Warrant in accordance with, and as
required by, the terms of Subsection (a) of this Section 2, the
Company shall use its best efforts to forthwith cause a firm of
certified public accountants (who may be the regular accountant for
the Company) to compute the adjusted Exercise Price by reason of
such event in accordance with the provisions of Subsection (a).
The Company shall forthwith mail to the Holder of this Warrant a
copy of such computation which shall be conclusive and shall be
binding upon such Holder unless contested by such Holder by written
notice to the Company within fourteen (14) days after the mailing
thereof by the Company.
(d) In case:
(1) The Company shall make a record of the
Holders of its Common Stock for the purpose of entitling them to
receive a dividend payable otherwise than in cash, or a cash
dividend constituting a partial liquidating dividend, as
hereinafter defined; or
(2) The Company shall make a record of the
Holders of its Common Stock for the purpose of entitling them to
subscribe for or purchase any Shares of any class or to receive any
other rights; or
(3) The Company shall set a date for any
reclassification or other reorganization of the capital stock of
the Company, consolidation or merger of the Company with or into
another corporation or conveyance of all or substantially all of
the assets of the Company; or
(4) The Company shall set a date for the
voluntary or involuntary dissolution, liquidation or winding up of
the Company;
then, in any case, the Company shall mail to the Holder of this
Warrant, at least twenty (20) days prior to such record date or the
date set for any action described in subparagraphs (d)(3) and
(d)(4) above, a notice advising such Holder of the date or expected
date on which a record is to be taken for the purpose of such
dividend, distribution of rights or the date on which such
reclassification, reorganization, consolidation, merger conveyance,
dissolution, liquidation or winding up is to take place, as the
case may be. Such notice shall also specify the date or expected
date, if any is to be fixed, as of which Holders of Common Stock of
record shall be entitled to participate in said dividend,
distribution of rights, or shall be entitled to exchange their
Shares of Common Stock for securities or other property deliverable
upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up, as the case may
be.
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<PAGE>
(e) In case the Company, at any time while this
Warrant shall remain valid and unexercised, shall sell all or
substantially all of its property, or dissolve, liquidate or wind
up its affairs or sell or dispose of all or any part of the assets,
securities or property of any wholly-owned subsidiary, the Holder
of this Warrant shall thereafter be entitled to receive upon
exercise hereof in lieu of such Shares of Common Stock of the
Company which such Holder would have been entitled to receive, the
same kind and amount of any securities or assets as may be
issuable, distributable or payable upon any such sale, dissolution,
liquidation or winding up with respect to such number of Shares of
Common Stock of the Company as would otherwise have been issuable
upon exercise of this Warrant.
(f) In the event the Company, at any time while this
Warrant shall remain valid and unexercised, shall propose to
declare any partial liquidating dividend, it shall notify the
Holder of this Warrant as set forth in Subsection (d) of this
Section 2. The term "partial liquidating dividend" shall include
a dividend in cash or other property of an amount which, together
with all other dividends in cash or other property paid, or
declared and set aside for payment, subsequent to June 30, 1998 is
equal to or greater than forty (40%) percent of the cumulative
consolidated net income of the Company subsequent to two years from
the date hereof.
(g) The provisions of this Section 2 are for the
purpose of, and shall be interpreted to the effect that, upon any
exercise of this Warrant the Holder shall be entitled to receive
the same amount and kind of securities and other property (except
cash dividends or rights of the kind described in paragraphs 1 and
2 of subsection (d) of this Section (2) which it would have been
entitled to receive as the owner at all times subsequent to the
date hereof of the number of Shares purchased upon any such
exercise.
(h) As used throughout this Warrant, the term "Common
Stock" shall also mean and include the Company's authorized Common
Stock and shall also include any capital stock of any class of the
Company hereafter authorized which shall not be limited to a fixed
sum or percentage in respect of the rights of the Holders thereof
to participate in dividends and in the distribution of assets upon
the voluntary or involuntary liquidation, dissolution or winding up
of the Company; and shall also include, unless the context
otherwise require, the stock and/or other securities and/or
property at the time receivable upon the exercise of this Warrant,
including, in case of any consolidation, merger, amalgamation or
sale of assets of the character referred to in this Section 2 and
the Shares of stock, securities or property provided for in this
Section 2.
3. Covenants of the Company. The Company hereby
covenants and agrees that prior to the expiration of this Warrant
by exercise or by its terms:
(a) The Company will not by amendment of its Articles
of Incorporation or through reorganization, consolidation, merger,
dissolution, or sale of assets, or by any other voluntary act or
deed, avoid or seek to avoid the observance or performance of any
of the covenants, stipulations or conditions to be observed or
performed hereunder by the Company, but will at all times in good
faith assist, insofar as it is able, in the carrying out of all
provisions of this Warrant and in the taking of all other actions
which may be necessary in order to protect the rights of the Holder
against dilution.
(b) The Company shall at all times reserve and keep
available, out of its authorized and unissued capital stock, solely
for the purpose of providing for the exercise, forthwith upon the
request of the Holder of the Warrant(s) then outstanding and in
effect, such number of Shares of Common Stock as shall, from time
to time, be sufficient for such exercise of the Warrants(s). The
Company shall, from time to time, in accordance with the laws of
the State of New Mexico, increase the authorized amount of its
capital stock if at any time the number of Shares of Common Stock
remaining unissued and unreserved for other purposes shall not be
sufficient to permit the exercise of the Warrant or Warrants then
outstanding and in effect.
4. Loss, Theft, Destruction or Mutilation. In case
this Warrant shall become mutilated or defaced or be destroyed,
lost or stolen, the Company shall execute and deliver a new Warrant
in exchange for and upon surrender and cancellation of such
mutilated or defaced Warrant or in lieu of substitution for such
Warrant so destroyed, lost or stolen, upon the Holder of such
Warrant filing with the Company such evidence satisfactory to it
that such Warrant has been so mutilated, defaced, destroyed, lost
or stolen and of the ownership thereof by the Holder; provided,
however, that the Company shall be entitled, as a condition to the
execution and delivery of such new Warrant, to demand indemnity
satisfactory to it and payment of expenses and charges incurred in
connection with the delivery of such new Warrant. All Warrants so
surrendered to the Company shall be canceled.
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5. Record Owner. At the time of the surrender of this
Warrant, with the form of subscription properly executed, and the
payment of the Exercise Price, the person exercising the Warrant
shall be deemed to be the Holder of record of the Shares of Common
Stock deliverable upon such exercise, in whole or in part,
notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such Shares of
Common Stock shall not then be actually delivered to such person.
6. Fractional Shares. No fractional Shares or scrip
representing fractional Shares shall be issued upon the exercise of
this Warrant. With respect to any fraction of a Share called for
on such exercise, the Holder may elect to receive, and the Company
shall pay to the Holder, an amount in cash equal to such fraction
multiplied by the Exercise Price. In the alternative, the Holder
may elect to remit to the Company an amount in cash equal to the
difference between such fraction and one (1), multiplied by the
Exercise Price, and the Company will issue it one Share of Common
Stock in addition to the number of whole Shares required by the
exercise of the Warrant; provided, however, that the Company shall
not be obligated by the operation of this Section 6 to issue Shares
of Common Stock in the aggregate exceeding the number of Shares
duly registered in accordance with applicable federal and state
securities laws or as to which an exemption from registration has
been determined to be available.
7. Original Issue Taxes. The Company will pay all
United States, state and local (but not foreign) original issue
taxes, if any, upon the issuance of this Warrant or the Shares
deliverable upon exercise hereof.
8. Mailing of Notices, etc. All notices and other
communications from the Company to the Holder of this Warrant shall
be mailed by first-class registered or certified mail, return
receipt requested, postage prepaid, to the address of the Holder as
shown on the records of the Company, or to such other address
furnished to the Company in writing by the Holder of this Warrant.
All notices from the Holder of this Warrant to the Company shall be
mailed to the Company at 14530 East Fremont Avenue, Englewood,
Colorado 80111 or at any other principal office maintained by the
Company in any state.
10. Laws of the State of Colorado. This Warrant shall
be governed by, interpreted under and construed in all respects in
accordance with the laws of the State of Colorado irrespective of
the place of domicile or residence of any party. In the event of
a controversy arising out of the interpretation, construction,
performance or breach of this Warrant, the parties hereby agree and
consent to the jurisdiction and venue of the court of the State of
Colorado, or the United States District Court for the District of
Colorado; and further agree and consent that personal service of
process in any such action or proceeding outside the State of
Colorado shall be tantamount to service in person in Colorado.
11. Entire Agreement and Modification. The Company and
the Holder hereby represent and Warrant that this Warrant is
intended to and does contain and embody all of the understandings
and agreements, both written and oral, of the parties hereto with
respect to the subject matter of this Warrant, and that there
exists no oral agreement or understanding, express or implied
liability, whereby the absolute, final and unconditional character
and nature of this Warrant shall be in any way invalidated,
empowered or affected. A modification or waiver of any of the
terms, conditions or provisions of this Warrant shall be effective
only if made in writing and executed with the same formality of
this Warrant.
This Warrant will become wholly void and of no effect and the
rights evidenced hereby will terminate unless exercised in
accordance with the terms and provisions hereof at or before 5:00
p.m. Denver, Colorado time, on the Expiration Date.
IN WITNESS WHEREOF, the Company by its duly authorized
officer, has executed this Warrant on this 30th day of June, 1997.
COMTEC INTERNATIONAL, INC.
By: __________________________
Donald G. Mack, President
Attest:
_________________________________
Clifford Perlman, Secretary
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COMTEC INTERNATIONAL, INC.
FORM OF ASSIGNMENT
(Subject to the restrictions set forth on the face hereof)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________________________ the right
represented by this Warrant to purchase ________________________
Shares of Common Stock, $.001 par value per Share of ComTec
International, Inc. to which this Warrant relates, and appoints
_________________________________ attorney to transfer said right
on the books of said Corporation, with full power of substitution
in the premises.
Dated _______________________ ______________________________
(Signature must conform in all]
respects to name of Holder as
specified on the face of the
Warrant)
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COMTEC INTERNATIONAL, INC.
FORM OF WARRANT EXERCISE
(To be signed only upon exercise of Warrant)
To:
THE UNDERSIGNED, the Holder of this Warrant, hereby irrevocably
elects to exercise the purchase rights represented by this Warrant
for, and to purchase thereunder, pursuant to and in accordance with
the terms of this Warrant, ___________ Shares of Common Stock,
$.001 par value per Share of ComTec International, Inc. and
herewith makes payment of $_______________ therefor, and requests
that the certificates for such Shares be Issued in the name of and
be delivered to _____________________________________, whose
address is _______________________________________________, and if
such Shares shall not be all of the Shares purchasable thereunder,
that a new Warrant of like tenor for the balance of the Shares
purchasable hereunder be delivered to the undersigned.
Dated ____________________ ______________________________
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
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