SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange of 1934
Date of Report November 12, 1996
DCX, Inc.
(Exact name of registrant as specified in its charter)
Colorado 0-14273 84-0868815
(State of (Commission (IRS Employer
incorporation) File Number) Identification No.)
3002 North State Highway 83, Franktown, CO 80116-0569
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 688-6070
Not Applicable
(Former name or former address, if changed since last report)
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Item 5, Other Events.
Designation of Series A Preferred Stock.
On November 12, 1996, the Company received official notice of the acceptance of
the filing of an amendment to its Articles of Incorporation on November 6, 1996
to designate a Series A 6% Cumulative Convertible Redeemable Preferred Stock par
value $.001 ("Series A Preferred"), out of a part of its class of authorized
preferred stock. The number of shares of Series A Preferred Stock shall be
1,000,000. The Series A Preferred do not have voting rights and have a
liquidation preference over the common stock.
The Amendment to the Articles of Incorporation is attached to this Report as
Exhibit A, and sets forth the relative rights, designations, and preferences of
the Series A Preferred.
Item 7. Financial Statements and Exhibits.
Exhibit
Number Exhibit Page
- ------ ------- ----
3.2c Articles of Amendment to the Articles 4
of Incorporation of DCX, Inc.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On November 12, 1996, the Company sold a total of 500 shares of Series A 6%
Cumulative Convertible Redeemable Preferred Stock par value $.001 ("Series A
Preferred"), pursuant to Regulation S. The total offering price was $500,000.
First Capital Partners, Inc., Atlanta, GA, acted as the Company's placement
agent for the transaction. The sale was made in a private offshore transaction
to two non US funds who represented to the Company that they were sophisticated
investors.
Terms of the Series A Preferred provide for cumulative dividends at a 6% annual
interest rate payable when, as and if declared, payable in cash or, at the
option of the Company, in additional shares of Series A Preferred at the rate of
one share of Series A Preferred for each $1,000 of such dividend not paid in
cash. The dividends are cumulative whether or not earned. The Series A Preferred
has a stated value of $1,000 per share. The Series A Preferred do not have
voting rights.
Shares of Series A Preferred Stock have the following conversion rights:
(a) Each holder of shares of Series A Preferred Stock shall have the right at
any time and from time to time after forty (40) days from the date on which a
share of Series A Preferred Stock was issued, to convert some or all such share
into fully paid and non-assessable shares of Common Stock of the Corporation
determined in accordance with the Conversion Rate provided in Paragraph (b)
below (the "conversion Rate").
(b) The number of shares Common Stock issuable upon conversion of each share of
Series A Preferred Stock shall equal (I) the sum of (A) the Stated Value per
share and (B) accrued and unpaid dividends on such share, divided by (ii) the
Conversion Price. The Conversion Price shall be equal to the lessor of: (I) the
average of the Closing Bid Price (as hereinafter defined) of the Corporation's
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Common Stock for the five (5) trading days immediately preceding the date of
issuance of the Series A Preferred Stock; and (ii) seventy five percent (75%) of
the average of the Closing Bid Price for the five trading days immediately
preceding the conversion of the Series A Preferred Stock. The Closing Bid Price
shall mean the Closing bid price of the Corporations Common Stock as reported by
NASDAQ (or if not reported by NASDAQ as reported by such other exchange or
market where traded..
The Series A Preferred is subject to mandatory conversion two years after the
date of issue.
The Company paid a commission of ten percent of the total offering price, and
agreed to issue to First Capital Partners warrants to purchase 36,281 shares of
the Company's no par value common stock. The warrants are exercisable until
November 12, 1998, with an exercise price of $1.875 per share. the holders of
the warrants, and the holders of the 500 shares of Series A Preferred each have
a demand and piggy back registration right if necessary to permit the public
sale of the underlying common stock.
The private sale of the Series A Preferred was exempt from registration under
Regulation S. The sale was made in an offshore transaction to non US persons,
and the purchasers made representations to the Company regarding their status
and actions necessary to comply with Regulation S.
Change in Litigation Status. The Company reports that its attorney received word
from the United States Supreme Court that the Company's petition for certiorari
in the matter of the third terminated contract was denied. While the Company
previously had recorded a reserve of $521,000.00 during its third fiscal quarter
for the potential loss associated with this possibility, it is further
evaluating the effect of this denial on its financial statements which could be
material. The Company expects to be requested to reimburse the reprocurement
costs and may be presented with claims from certain vendors on the contract for
unreimbursed costs related to unfinished goods and services related to the
contract but not delivered to the Company.
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.
DCX, Inc.
(Registrant)
November 27, 1996 /S/ FREDERICK G. BEISSER
-----------------------------------------
(Signature)
Frederick G. Beisser
Secretary, Treasurer & Chief Financial Officer
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ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF DCX, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is DCX, Inc.
SECOND: The following amendment to the Articles of Incorporation was duly
adopted by the Board of Directors on November 4, 1996 without shareholder
action, as prescribed by Section 7-106-102 of the Colorado Business Corporation
Act, and shareholder action was not required.
The Articles of Incorporation are amended to add the following as Section 6
under Article V:
6. Series A 6% Cumulative Convertible Redeemable Preferred Stock $.001 par
value. The Corporation shall have 1,000,000 shares designated as Series A 6%
Cumulative Convertible Redeemable Preferred Stock $.001 par value, as part of
the authorized class of preferred shares. Set forth hereinafter is a statement
of the voting powers, preferences, limitations, restrictions, and relative
rights of shares of Series A 6% Cumulative Convertible Redeemable Preferred
Stock $.001 par value:
1. Designation: Number of Shares.
The designation of said series of Preferred Stock shall be Series A 6%
Cumulative Convertible Redeemable Preferred Stock (the "Series A Preferred
Stock"). The number of shares of Series A Preferred Stock shall be 1,000,000.
Each share of Series A Preferred Stock shall have a stated value equal to $1,000
(as adjusted for any stock dividends combinations or splits with respect to such
shares) (the "Stated Value").
2. Dividends.
(a) The holders of outstanding shares of Series A Preferred Stock
shall be entitled to receive preferential dividends in cash out of any funds of
the Corporation legally available at the time for declaration of dividends
before any dividend or other distribution will be paid or declared and set apart
for payment on any shares of any Common Stock or other class of stock junior to
the Series A Preferred Stock (the Common Stock and such junior stock being
hereinafter collectively the "Junior Stock") at the rate of 6% simple interest
per annum on the Stated Value per share payable quarterly when as and if
declared; provided however that dividend payments may be made in the sole
discretion of the Board of Directors of the Corporation in additional fully paid
and non assessable shares of Series A Preferred Stock at a rate of one share of
Series A Preferred Stock for each $1,000 of such dividend not paid in cash, and
the issuance of such additional shares shall constitute full payment of such
dividend.
(b) The dividends on the Series A Preferred Stock at the rates
provided above shall be cumulative whether or not earned so that if at any time
full cumulative dividends at the rate aforesaid on all shares of the Series A
Preferred Stock then outstanding from the date from and after which dividends
thereon are cumulative to the end of the quarterly dividend period next
preceding such time shall not have been paid or declared and set apart for
payment, or if the full dividend on all such outstanding Series A Preferred
Stock for the then current dividend period shall not have been paid or declared
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and set apart for payment, the amount of the deficiency shall be paid or
declared and set apart for payment (but without interest thereon) before any sum
shall be set apart for or applied by the Corporation or a subsidiary of the
Corporation to the purchase redemption or other acquisition of the Series A
Preferred Stock or any shares of any other class of stock ranking on a parity
with the Series A Preferred Stock ("Parity Stock") and before any dividend or
other distribution shall be paid or declared and set apart for payment on any
Junior Stock and before any sum shall be set aside for or applied to the
purchase, redemption or other acquisition of Junior Stock.
(c) Dividends on all shares of the Series A Preferred Stock shall
begin to accrue and be cumulative from and after the date of issuance thereof. A
dividend period shall be deemed to commence on the day following a quarterly
dividend payment date herein specified and to end of the next succeeding
quarterly dividend payment date herein specified.
3. Liquidation Rights.
(a) Upon the dissolution, liquidation or winding-up of the
Corporation, whether voluntary or involuntary, the holders of the Series A
Preferred Stock shall be entitled to receive before any payment or distribution
shall be made on the Junior Stock, out of the assets of the Corporation
available for distribution to stockholders, the Stated Value per share of Series
A Preferred Stock and all accrued and unpaid dividends to and including the date
of payment thereof. Upon the payment in full of all amounts due to holders of
the Series A Preferred Stock the holders of the Common Stock of the Corporation
and any other class of Junior Stock shall receive all remaining assets of the
Corporation legally available for distribution. If the assets of the Corporation
available for distribution to the holders of the Series A Preferred Stock shall
be insufficient to permit payment in full of the amounts payable as aforesaid to
the holders of Series A Preferred Stock upon such liquidation, dissolution or
winding-up, whether voluntary or involuntary, then all such assets of the
Corporation shall be distributed to the exclusion of the holders of shares of
Junior Stock ratably among the holders of the Series A Preferred Stock.
(b) Neither the purchase nor the redemption by the Corporation of
shares of any class of stock nor the merger or consolidation of the Corporation
with or into any other corporation or corporations nor the sale or transfer by
the Corporation of all or any part of its assets shall be deemed to be a
liquidation, dissolution or winding-up of the Corporation for the purposes of
this paragraph 3. Holders of the Series A Preferred Stock shall not be entitled
upon the liquidation, dissolution or winding-up of the Corporation to receive
any amounts with respect to such stock other than the amounts referred to in
this paragraph 3.
4. Conversion into Common Stock. Shares of Series A Preferred Stock
shall have the following conversion rights and obligations:
(a) Subject to the further provisions of this paragraph 4 each holder
of shares of Series A Preferred Stock shall have the right at any time and from
time to time after forty (40) days from the date on which a share of Series A
Preferred Stock was issued, to convert some or all such shares into fully paid
and non-assessable shares of Common Stock of the Corporation (as defined in
paragraph 4(i) below) determined in accordance with the Conversion Rate provided
in paragraph 4(b) below (the "Conversion Rate")
(b) The number of shares of Common Stock issuable upon conversion of
each share of Series A Preferred Stock shall equal (i) the sum of (A) the Stated
Value per share and (B) accrued and unpaid dividends on such share, divided by
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(ii) the Conversion Price. The Conversion Price shall be equal to the lesser of:
(i) the average of the Closing Bid Price (as hereinafter defined) of the
Corporation's Common Stock for the five (5) trading days immediately preceding
the date of issuance of the Series A Preferred Stock; and (ii) seventy five
percent (75%) of the average of the Closing Bid Price for the five trading days
immediately preceding the conversion of the Series A Preferred Stock. The
Closing Bid Price shall mean the closing bid price of the Corporation's Common
Stock as reported by NASDAQ (or if not reported by NASDAQ as reported by such
other exchange or market where traded).
(c) The holder of any certificate for shares of Series A Preferred
Stock desiring to convert any of such shares shall surrender such certificate at
the principal office of any transfer agent for said stock (the "Transfer Agent")
with a written notice of such election to convert such shares into Common Stock
duly filled out and executed, together with such certificate properly endorsed
for or accompanied by duly executed instruments of transfer (and such other
transfer papers as said Transfer Agent may reasonably require). The holder of
the shares so surrendered for conversion shall be entitled to receive (except as
otherwise provided herein) a certificate or certificates which shall be
expressed to be fully paid and non-assessable for the number of shares of Common
Stock to which such stockholder shall be entitled upon such conversion
registered in the name of such holder or in such other name or names as such
stockholder in writing may specify. In the case of any Series A Preferred Stock
which is converted in part only the holder of shares of Series A Preferred Stock
shall upon delivery of the certificate or certificates representing Common Stock
also receive a new share certificate representing the unconverted portion of the
shares of Series A Preferred Stock. Nothing herein shall be construed to give
any holder of shares of Series A Preferred Stock surrendering the same for
conversion the right to receive any additional shares of Common Stock or other
property which results from an adjustment in conversion rights under the
provisions of paragraph (d) or (e) of this paragraph 4 until holders of Common
Stock are entitled to receive the shares or other property giving rise to the
adjustment.
In the case of the exercise of the conversion rights set forth in
paragraph 4(a) the conversion privilege shall be deemed to have been exercised
and the shares of Common Stock issuable upon such conversion shall be deemed to
have been issued upon the date of receipt by such Transfer Agent for conversion
of the certificate for such shares of Series A Preferred Stock. The person or
entity entitled to receive Common Stock issuable upon such conversion shall, on
the date such conversion privilege is deemed to have been exercised and
thereafter, be treated for all purposes as the record holder of such Common
Stock and shall on the same date cease to be treated for any purpose as the
record holder of such shares of Series A Preferred Stock so converted.
Notwithstanding the foregoing, if the stock transfer books are closed
on the date such shares are received by the Transfer Agent, the conversion
privilege shall be deemed to have been exercised and the person or entity shall
be treated as a record holder of shares of Common Stock on the next succeeding
date on which the transfer books are open, but the Conversion Rate shall be that
in effect on the date such conversion privilege was exercised. The Corporation
shall not be required to deliver certificates for shares of its Common Stock or
new certificates for unconverted shares of its Series A Preferred Stock while
the stock transfer books for such respective classes of stock are duly closed
for any purpose; but the right of surrendering shares of Series A Preferred
Stock for conversion shall not be suspended during any period that the stock
transfer books of either of such classes of stock are closed.
Upon the conversion of any shares of Series A Preferred Stock no
adjustment or payment shall be made with respect to such converted shares on
account of any dividend on shares of such stock or on account of any dividend on
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the Common Stock, except that the holder of such converted shares shall be
entitled to be paid any dividends declared on shares of Common Stock after
conversion thereof.
The conversion privilege shall also be subject to the following terms
and conditions:
(i) if any shares of Series A Preferred Stock shall be called for
redemption, the conversion privilege in respect of such shares shall
terminate at the close of business on the last business day next
preceding the applicable Conversion Date; and
(ii) if the Corporation shall at any time be liquidated dissolved or
wound-up the conversion privilege shall terminate at the close of
business on the last business day next preceding the effective date of
such liquidation, dissolution or winding-up.
The Corporation shall not be required in connection with any
conversion of Series A Preferred Stock to issue a fraction of a share of its
Common Stock nor to deliver any stock certificate representing a fraction
thereof, but in lieu thereof the Corporation may make a cash payment equal to
such fraction multiplied by the Closing Bid Price on the date the conversion
right was triggered.
(d) The Conversion Rate shall be subject to adjustment from time to
time as follows:
(i) In case the Corporation shall at any time (A) declare any dividend
or distribution on its Common Stock or other securities of the
Corporation other than the Series A Preferred Stock, (B) split or
subdivide the outstanding Common Stock, (C) combine the outstanding
Common Stock into a smaller number of shares, or (D) issue by
reclassification of its Common Stock any shares or other securities of
the Corporation, then in each such event the Conversion Rate shall be
adjusted proportionately so that the holders of Series A Preferred
Stock shall be entitled to receive the kind and number of shares or
other securities of the Corporation which such holders would have
owned or have been entitled to receive after the happening of any of
the events described above had such shares of Series A Preferred Stock
been converted immediately prior to the happening of such event (or
any record date with respect thereto). Such adjustment shall be made
whenever any of the events listed above shall occur. An adjustment
made to the Conversion pursuant to this paragraph 4(d)(i) shall become
effective immediately after the effective date of the event
retroactive to the record date, if any, for the event.
(e) (i) In case of any merger of the Corporation with or into any
other corporation (other than a merger in which the Corporation is the
surviving or continuing corporation and which does not result in any
reclassification, conversion, or change of the outstanding shares of
Common Stock) then unless the right to convert shares of Series A
Preferred Stock shall have terminated, as part of such merger lawful
provision shall be made so that holders of Series A Preferred Stock
shall thereafter have the right to convert each share of Series A
Preferred Stock into the kind and amount of shares of stock and/or
other securities or property receivable upon such merger by a holder
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of the number of shares of Common Stock into which such shares of
Series A Preferred Stock might have been converted immediately prior
to such consolidation or merger. Such provision shall also provide for
adjustments which shall be as nearly equivalent as may be practicable
to the adjustments provided for in paragraph (d) of this paragraph 4.
The foregoing provisions of this paragraph 4(e) shall similarly apply
to successive mergers.
(ii) In case of any sale or conveyance to another person or entity of
the property of the Corporation as an entirety, or substantially as an
entirety, in connection with which shares or other securities or cash
or other property shall be issuable, distributable, payable, or
deliverable for outstanding shares of Common Stock, then, unless the
right to convert such shares shall have terminated, lawful provision
shall be made so that the holders of Series A Preferred Stock shall
thereafter have the right to convert each share of the Series A
Preferred Stock into the kind and amount of shares of stock or other
securities or property that shall be issuable, distributable, payable,
or deliverable upon such sale or conveyance with respect to each share
of Common Stock immediately prior to such conveyance.
(f) Whenever the number of shares to be issued upon conversion of the
Series A Preferred Stock is required to be adjusted as provided in this
paragraph 4, the Corporation shall forthwith compute the adjusted number of
shares to be so issued and prepare a certificate setting forth such adjusted
conversion amount and the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Transfer Agent for the Series A
Preferred Stock and the Common Stock; and the Corporation shall mail to each
holder of record of Series A Preferred Stock notice of such adjusted conversion
price.
(g) In case at any time the Corporation shall propose:
(i) to pay any dividend or distribution payable in shares upon its
Common Stock or make any distribution (other than cash dividends) to
the holders of its Common Stock; or
(ii) to offer for subscription to the holders of its Common Stock any
additional shares of any class or any other rights; or
(iii) any capital reorganization or reclassification of its shares or
the merger of the Corporation with another corporation (other than a
merger in which the Corporation is the surviving or continuing
corporation and which does not result in any reclassification,
conversion, or change of the outstanding shares of Common Stock); or
(iv) the voluntary dissolution, liquidation or winding-up of the
Corporation;
then, and in any one or more of said cases, the Corporation shall cause at least
fifteen (15) days prior notice of the date on which (A) the books of the
Corporation shall close or a record be taken for such stock dividend,
distribution, or subscription rights, or (B) such capital reorganization,
reclassification, merger, dissolution, liquidation or winding-up shall take
place, as the case may be, to be mailed to the Transfer Agent for the Series A
Preferred Stock and for the Common Stock and to the holders of record of the
Series A Preferred Stock.
(h) So long as any shares of Series A Preferred Stock shall remain
outstanding and the holders thereof shall have the right to convert the same in
accordance with provisions of this paragraph 4 the Corporation shall at all
times reserve from the authorized and unissued shares of its Common Stock a
sufficient number of shares to provide for such conversions.
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(i) The term Common Stock as used in this paragraph 4 shall mean
Common Stock of the Corporation as such stock is constituted at the date of
issuance thereof or as it may from time to time be changed or shares of stock of
any class of other securities and/or property into which the shares of Series A
Preferred Stock shall at any time become convertible pursuant to the provisions
of this paragraph 4.
(j) The Corporation shall pay the amount of any and all issue taxes
(but not income taxes) which may be imposed in respect of any issue or delivery
of stock upon the conversion of any shares of Series A Preferred Stock, but all
transfer taxes and income taxes that may be payable in respect of any change of
ownership of Series A Preferred Stock or any rights represented thereby or of
stock receivable upon conversion thereof shall be paid by the person or persons
surrendering such stock for conversion.
5. Mandatory Conversion.
(a) The shares of Series A Preferred Stock not previously converted
into shares of Common Stock shall be converted into shares of Common Stock
without further action of the Holder on the second anniversary of the date of
issuance thereof, at the Conversion Price and on the conversion terms specified
in paragraph 4(b).
(b) Notice of conversion of Series A Preferred Stock by the
Corporation pursuant to this paragraph 5 shall be given by mail or in such other
manner as may be prescribed by resolution of the Board not less than thirty (30)
days prior to the applicable date of mandatory conversion (the "Conversion
Date"). As applicable, the notice shall specify the number of shares to be
converted, the date fixed for conversion, and the conversion price per share.
(c) The holder of any certificate for shares of Series A Preferred
Stock that is converted pursuant to this Section 5 shall surrender such
certificate at the principal office of any transfer agent for said stock (the
"Transfer Agent") properly endorsed for or accompanied by duly executed
instruments of transfer (and such other transfer papers as said Transfer Agent
may reasonably require). The holder of the shares so surrendered for conversion
shall be entitled to receive (except as otherwise provided herein) a certificate
or certificates which shall be expressed to be fully paid and non-assessable for
the number of shares of Common Stock to which such stockholder shall be entitled
upon such conversion registered in the name of such holder or in such other name
or names as such stockholder in writing may specify.
(d) On and after the applicable Conversion Date and notwithstanding
that any certificate for shares of Series A Preferred Stock so called for
conversion shall not have been surrendered for cancellation, all dividends on
the Series A Preferred Stock called for conversion shall cease to accrue and the
shares represented thereby shall no longer be deemed outstanding and all rights
of the holders thereof as stockholders of the Corporation shall cease and
terminate, except the right to receive the shares of Common Stock upon
conversion as provided herein.
6. Voting Rights. The shares of Series A Preferred Stock shall not
have voting rights.
7. Status of Converted or Redeemed Stock. In case any shares of Series
A Preferred Stock shall be redeemed or converted pursuant to paragraphs 4 or 5
hereof or otherwise repurchased or reacquired, the shares so redeemed,
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converted, or reacquired shall resume the status of authorized but unissued
shares of Preferred Stock and shall no longer be designated as Series A
Preferred Stock.
THIRD: The amendment does not effect any exchange, reclassification, or
cancellation of issued shares.
FOURTH: The amendment does not effect a change in the amount of stated
capital.
Dated November 6 , 1996.
DCX, Inc.
By: /S/
----------------------------------------
Jeanne M. Anderson, President,
Duly Authorized by the Board of Directors
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