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UNITED STATES
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: March 16, 1998
Date of earliest event reported: February 17, 1998
CHADMOORE WIRELESS GROUP, INC.
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(Exact name of registrant as specified in its charter)
Colorado 0-20999 84-1058165
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2875 E. Patrick Lane, Suite G 89120
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 740-5633
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(Former name or former address, if changed since last report.)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
None.
(b) Exhibits
Exhibit Number and Brief Description
10.16 Form of Amendment No. 1 to Offshore Subscription Agreement for Series
B 8% Convertible Preferred Stock dated on or about February 17, 1998(1)
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(1) Filed herewith.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
(a) On December 23, 1997, Registrant had, previous to the
transaction which is the subject of this filing, concluded a private placement
(the "Placement") conducted in accordance with Regulation S ("Regulation S") of
the Securities Act of 1933, as amended. In such Placement Registrant sold (i)
219,000 shares of Series B 8% Convertible Preferred Stock (the "Preferred
Stock") and (ii) warrants ("Warrants") to purchase 300,000 shares of the
Registrant's common stock ("Common Stock"). The Placement is described in
the Registrant's Filing on Form 8-K dated February 24, 1998 (the "Prior 8-K"),
which is hereby incorporated by reference.
On February 17, 1998, in the transaction which is the subject
of this filing, the Registrant amended the terms applicable to the securities
sold in the Placement to some Placement purchasers (collectively, the
"Subscribers") to extend the Holding Period (as defined in the Prior 8-K) and
to provide for the issuance of additional shares of Common Stock, Warrants and
Common Stock underlying Warrants to such Subscribers, in each case on the terms
and conditions set forth in amendments (the "Amendments") to the subscription
agreements (the "Subscription Agreements"). All Amendments were substantially
similar to each other, and a form of thereof is attached hereto as Exhibit
10.16. Each of the Amendments provided:
1. The Holding Period shall end on March 11, 1998 with respect to
seventy five percent (75%) of the liquidation preference of
each share of Preferred Stock held by the Subscriber.
2. Each Subscriber (i) as of the date of such Subscriber's
Amendment, made each of the representations and warranties
made by the Subscriber in the corresponding Subscription
Agreement, and (ii) acknowledged that the additional Common
Stock to be issued under this Amendment would be issued in
reliance on the availability of the exemption under Regulation
S, and (iii) undertook, with respect to the resale of any such
additional Common Stock, additional Warrants and Common Stock
underlying Warrants to abide by all covenants and agreements
pertaining to the resale of the Preferred Stock (and the
Common Stock underlying the Preferred Stock) set forth in the
corresponding Subscription Agreement, including, without
limitation, prohibitions on sales of the additional Common
Stock, additional Warrants and Common Stock underlying
Warrants in the United States or to a United States Person
within the applicable holding period specified under
Regulation S. The certificates representing such additional
Common Stock were required to bear a corresponding restrictive
legend, which the Subscriber was entitled to have removed
following the expiration of the applicable holding period
specified under Regulation S.
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3. In addition to the above, Registrant agreed in each Amendment
to promptly to issue to each Subscriber, for no additional
payment or consideration other than entering into the
Amendment, a specified number of additional Warrants and
shares of Common Stock. The Registrant then issued such
additional Common Stock and Warrants to the Subscribers.
The Registrant issued an aggregate 310,023 shares of Common
Stock and an aggregate 272,408 Warrants to the Subscribers in the subject
transaction in accordance with Regulation S. The Registrant relied on the
Subscribers' repetition of their representations and warranties as provided in
the Amendments (see clause (c) above) in concluding that the Regulation S
exemption was available for the subject transaction.
The securities issued in the subject transaction were solely
additional Common Stock and Warrants. The terms of the Warrants are the same
as those as described in the Prior 8-K, which are incorporated herein by
reference as if set out in full.
The Registrant received no additional consideration and no
underwriter was involved in the transaction.
(b) With respect to the conversion of its Series B 8% Convertible
Preferred Stock ("Preferred Shares") described in subparagraph (a) above, the
Registrant issued shares of its common stock as follows:
On March 2, 1998, a Holder converted 4,000 Preferred Shares,
at the conversion rate of $0.4455 per share and was issued 89,786 Conversion
Shares and 1,358 Dividend Shares, respectively.
On March 12, 1998, Holder converted 1,000 Preferred Shares, at
the conversion rate of $0.628 per share and was issued 15,924 Conversion Shares
and 276 Dividend Shares, respectively.
(c) On March 12, 1998, the Registrant approved an agreement,
effective February 25, 1998, pursuant to which it agreed to issue 800,000 shares
of its common stock, $0.001 par value (the "Common Stock") in accordance with
Regulation S ("Regulation S") of the Securities Act of 1933, as amended, to a
single investor (the "Investor"). The sale was not made through a Distributor,
as defined in Regulation S. The Common Stock was issued to the Investor, who is
not a U.S. Person, as that term is defined in Regulation S, in exchange for the
delivery to the Registrant of 5,032 shares of common stock of CMRS Systems, Inc.
("CMRS"), a subsidiary of the Registrant. The 5,032 shares of common stock of
CMRS (the "CMRS Shares") represent approximately 8% of the outstanding common
stock of CMRS. As a result of this transaction, CMRS is a wholly-owned
subsidiary of the Registrant.
CMRS previously agreed to issue the CMRS Shares to the
Investor in exchange for the agreement of the Investor to pay, on behalf of
CMRS, a fee to a LDC Consulting, Inc. ("LDC")in exchange for the agreement by
LDC to obtain the agreements of approximately 32 holders of SMR licenses (the
"Licensees") to a Second Amendment to Option and Stock Purchase Agreement
between CMRS and each of the Licensees. A First Amendment to Option and Stock
Purchase Agreement was filed as an exhibit to a Current Report on form 8-K
filed with the Securities and Exchange commission on November 6, 1997. The
Second Amendment to Option and Stock Purchase Agreement amended the First
Amendment to Option and Stock Purchase Agreement between CMRS and the Licensees
by providing that the purchase price for all or any part of the Optioned Assets
(as defined in the First Amendment to Option and Stock Purchase Agreement)
would be $100.00 to each Licensee whose Optioned Assets were to be acquired by
CMRS.
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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.
CHADMOORE WIRELESS GROUP, INC.
By: /s/ Robert W. Moore
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Robert W. Moore, President
Date: March 6, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
10.16 Form of Amendment No. 1 to Offshore Subscription Agreement for Series B 8% Convertible Preferred
Stock dated on or about February 17, 1998 (1)
</TABLE>
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(1) Filed herewith.
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EXHIBIT 10.16
FORM OF
AMENDMENT NO. 1 TO
OFFSHORE SUBSCRIPTION AGREEMENT
SERIES B 8% CONVERTIBLE PREFERRED STOCK
CHADMOORE WIRELESS GROUP, INC.
THIS AMENDMENT NO. 1 TO OFFSHORE SUBSCRIPTION AGREEMENT (this
"Amendment"), dated as of the 17th day of February, 1998 by and among CHADMOORE
WIRELESS GROUP, INC. (the "Company"), a Colorado corporation, and the holder of
the Company's Series B Preferred Stock named on the signature page hereto (the
"Subscriber").
Preliminary Statement
The Company and the Subscriber are parties to the OFFSHORE
SUBSCRIPTION AGREEMENT (the "Agreement"), dated as of the 10th day of December,
1997. Capitalized terms appearing herein have the meanings specified in the
Agreement. The parties hereto wish to amend the Agreement to extend the
Holding Period and to provide for the issuance of additional shares of Common
Stock, Warrants and Common Stock underlying Warrants, in each case on the terms
and conditions set forth herein. Therefore, in consideration of the foregoing,
and for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. The Holding Period shall end on March 11, 1998 with
respect to seventy five percent (75%) of the
Liquidation Preference of each share of Preferred
Stock held by the Subscriber or any successor or
transferees thereof, notwithstanding anything to the
contrary appearing in the Certificate of Designation.
The Agreement, including Section 2(l)(i) or (L)
thereof, is hereby amended to comply with the terms
of this Amendment.
2. Subscriber (i) as of the date hereof, hereby makes
each of the representations and warranties made by
the Subscriber in the Agreement, and (ii)
acknowledges that the additional Common Stock to be
issued under this Amendment will be issued in
reliance on the availability of the exemption under
Regulation S, and (iii) undertakes, with respect to
the resale of any such additional Common Stock,
additional Warrants and Common Stock underlying
Warrants to abide by all covenants and agreements
pertaining to the resale of the Preferred Stock (and
the Common Stock underlying the Preferred Stock) set
forth in the Agreement, including, without
limitation, prohibitions on sales of the additional
Common Stock, additional Warrants and Common Stock
underlying Warrants in the United States or to a
United States Person within the applicable holding
period specified under Regulation S. The certificates
representing such additional Common Stock shall the
following legend:
THE COMMON STOCK REPRESENTED HEREBY (THE "COMMON
STOCK") HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, TOGETHER WITH THE
REGULATIONS PROMULGATED THEREUNDER (THE "SECURITIES
ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE UNITED
STATES (AS THAT TERM IS DEFINED IN REGULATION S
PROMULGATED UNDER THE SECURITIES ACT) OR TO A U.S.
PERSON (AS THAT TERM IS DEFINED IN REGULATION S) IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FILED UNDER THE SECURITIES ACT AND ANY
