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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): FEBRUARY 10, 1997
(JANUARY 27, 1997)
___________________________
KCD HOLDINGS INCORPORATED
(Exact name of registrant as specified in its charter)
___________________________
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<S> <C> <C>
NEVADA 33-06827LA 95-4029439
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
</TABLE>
___________________________
2835 TOWNSGATE ROAD, SUITE 110
WESTLAKE VILLAGE, CALIFORNIA 91361
(Address of principal executive offices) (Zip Code)
___________________________
(805) 494-6687
(Registrant's telephone number,
including area code)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
(a) On January 27, 1997 KCD Holdings Incorporated (the "Company")
sold 375 shares of its Series A Convertible Preferred Stock, par value $1,000
per share (the "Series A Shares"). On February 5, 1997 the Company sold 375
Series A Shares.
(b) The Series A Shares were sold to two "accredited investors" as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). Net Financial
International, Ltd. acted as a placement agent in connection with the placement
of the Series A Shares.
(c) The Company received gross offering proceeds of $750,000 from
the sale of the Series A Shares and paid placement and finders fees in the
aggregate amount of 15% of the gross offering proceeds.
(d) The Company relied on the exemption from the registration
provisions of Section 5 of the Securities Act contained in Regulation S for the
sale of the Series A Shares. The Series A Shares were sold in an "offshore
transaction" to non "U.S. persons" (as defined in Regulation S), and the
certificates representing the Series A Shares contain an appropriate
restrictive legend to comply with the "restricted period" (as defined in
Regulation S).
(e) The Series A Shares are convertible into the Company's common
stock, $.002 par value, in phases following the date of issuance (the "Closing
Date"). The Series A Shares are entitled to a 6% cumulative dividend payable
in common stock at the time of conversion and all of the Series A Shares are
subject to a mandatory 12 month conversion feature. One-third of the Series A
Shares are convertible into common stock at any time 45 days after the Closing
Date; an additional one-third (two-thirds cumulatively) are convertible into
common stock at any time 60 days after the Closing Date; and an additional
one-third (the entire amount cumulatively) are convertible into common stock at
any time 75 days after the Closing Date. The number of common shares issuable
upon conversion of the Series A Shares equals the par value of the Series A
Shares plus accrued dividends through the date of conversion divided by the
lesser of (I) 70% of the "Market Price" (the 5 day average closing bid for the
common stock for the 5 business days immediately preceding the conversion
date); or (ii) 100% of the 5 day average closing bid for the common stock for
the 5 business days immediately preceding the Closing Date. Provided, that,
for any conversions of the Series A Shares occurring after the 89th day
following the Closing Date the conversion rate will be the lesser of (I) 65% of
the Market Price; or (ii) 100% of the 5 day average closing bid for the common
stock for the 5 business days immediately preceding the Closing Date.
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SIGNATURES
Pursuant to the requirement 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.
KCD Holdings Incorporated
Date: February 10, 1997 By: /s/ Wellington Ewen
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Wellington Ewen, President
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