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 5, 1997
TIREX AMERICA INC.
(Exact name of registrant as specified in its charter)
Delaware 33-17598-NY 22-2824362
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3767 Thimens, Suite 207
Ville St.Laurent, Quebec H4R 1W4
(Address of principal executive offices) (Zip Code)
(514) 335-0111
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Page 1 of 6 pages
<PAGE>
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
SALES
On February 5, 1997, (the "Purchase Date") Registrant sold four
hundred thousand (400,000) shares of its common stock, $.001 par value,
per share (the "Shares") without registration under the Securities Act
of 1933, as amended (the "Securities Act") pursuant to Regulation S
thereof. The following sets forth information respecting the dates,
purchasers, and consideration involved in such sales and the bases for
Registrant's claim that all such sales were exempt from the registration
provisions of Section 5 of the Securities Act.
The Shares were purchased for cash on a "delivery against payment
basis" by a corporation formed under the laws of the British Virgin Is-
lands and having its administrative office at P.O. Box 484, 108 Halkett
Place, St. Helier, Jersey, Channel Islands (the "Buyer") at a purchase
price of twenty-seven United States cents (US $0.27) per share (the"Per
Share Purchase Price") aggregating to a total purchase price of one hun-
dred eight thousand ($108,000). The Buyer has represented to Registrant
that such purchase was made for investment for its own account and not
with a view to the resale or distribution thereof, and that it does not
intend to divide its participation with others or to resell or otherwise
dispose of all or any part of the Shares unless and until they are sub-
sequently registered under the Act, or an exemption from such registra-
tion is available.
On December 20, 1996, the Buyer entered into a subscription agree-
ment with Registrant (the "Subscription Agreement") which entitled it to
purchase a total of five million, five hundred fifty-five thousand, five
hundred fifty-five (5,555,555) shares of Registrant's common stock dur-
ing the approximately six-month period ending June 23, 1997 at the same
Per Share Purchase Price. On January 10, 1997, the Buyer purchased
200,000 shares which, together with the 400,000 shares purchased on Feb-
ruary 5, 1996, which are the subject of this report, leaves four million,
nine hundred fifty-five thousand, five hundred fifty-five shares still
subject to the Subscription Agreement. If all 5,555,555 Shares subscribed
for are purchased, the total purchase price will be approximately one
million, five hundred thousand dollars. The per share purchase price of
$0.27 represented a discount of three cents ($0.03) or ten percent (10%)
from the average of the high and low bid prices for Registrant's common
stock as traded in the over-the-counter market and reported in the NASDAQ
Bulletin Board during the month of December 1996. Registrant believes that
such discount is warranted by a number of factors including but not limit-
ed to the length of the restricted period, the historic volatility of the
market for Registrant's common stock, and Registrant's financial con-
dition. On February 5, 1997, when the 400,000 share purchase was made,
the average of the high-bid and low-ask prices for Registrant's common
stock was $0.535. The terms of the Subscription Agreement require, among
other things, that payment of the full Purchase Price, must be made in
good funds by the Buyer prior to the issuance and delivery of the cer-
tificates representing any Shares purchased. The certificates repre-
senting all shares sold under the Subscription Agreement will bear the
following legend:
<PAGE> 2
The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended
(the "Act"), but have been issued in reliance upon
Regulation S of the Act. These shares may not be sold or
otherwise transferred to a United States person (as
defined in Regulation S) or to any person with a United
States address during the restricted period following
issuance of these shares. Following expiration of the
forty day restricted period, any resale or transfer of these
shares to a United State person or into the United States
must be made in accordance with Regulation S, pursuant to
an effective registration statement under the Act, or pur-
suant to an exemption from registration under the Act.
BASIS FOR EXEMPTION CLAIMED
This sale is claimed to have been exempt from registration under
the Securities Act pursuant to Regulation S for the following reasons:
The sale was an "offshore transaction" within the meaning of Rule 902
insofar as:
1. The offer and sale of the Shares was made outside the United
States;
2. The Buyer is an offshore corporation formed under the laws of
the British Virgin Islands and having its administrative office at P.O.
Box 484, 108 Halkett Place, St. Helier, Jersey, Channel Islands and the
it has represented itself as such to Registrant. In addition, the Buyer's
Corporate Secretary, Basel Corporate Services (Channel Islands) Limited,
and the Directors of the Buyer (the "Directors") have also represented
the same to the Registrant;
3. The Registrant did not engage in any "directed selling efforts"
to condition the United States market for the Shares in contemplation of
the sale and the Buyer has represented that, during the "restricted per-
iod" applicable to the Shares, it will not engage in any such directed
selling efforts to condition the United States market for the Shares.
4. Registrant reasonably believes that the sale of the Shares has
not been pre-arranged with a buyer in the United States, that upon Buyer's
purchase of the Shares the entire economic risk of such purchase shall be
sustained outside of the United States, and that the Shares will "come to
rest" outside of the United States. Registrant bases such belief on the
following representations which the Buyer has made in the Subscription
Agreement, on its own behalf and on behalf of each of each beneficial
owner of the Buyer (the "Beneficial Owners"), and on similar repre-
sentations certified by the Directors, that, among other things:
<PAGE> 3
(a) Buyer is not organized under the laws of the United States and
was not formed for the sole purpose ofinvesting in securities
sold without registration under the Securities Act pursuant to
Regulation S or otherwise.
(b) Buyer was not organized by any person or persons who are
citizens or residents of the United States and no Beneficial
Owner of Buyer is a United States citizen or resident; For
purposes of Buyer's representations, the term "Beneficial Owner"
means any natural person who, directly or indirectly through one
or more other natural persons and/or entities, has a beneficial
ownership interest in, or in any way controls, is controlled by,
or is under common control with, the Buyer.
(c) Buyer was not organized by, and neither Buyer nor any of the
Beneficial Owners is:
(i) a person who, prior to the purchase of the Shares,
has a beneficial ownership of ten percent or more
of the issued and outstanding common stock of the
Seller or in any way controls, is controlled by, or
is under common control with, the Seller; or
(ii) a person who intends upon expiration of the
Restricted Period, either directly or indirectly
through one or more intermediaries, to distribute,
arrange for, facilitate, or participate in any
other manner in the distribution of, the Shares in
the United States.
(d) At the time the buy order was originated, Buyer and each
of the Beneficial Owners of Buyer were outside the United
States;
(e) No offer to purchase the Shares was solicited or made in
the United States;
(f) The Buyer (and each of the Beneficial Owners, through the
Buyer), is purchasing the Shares for such person's own
account and neither the Buyer or any of the Beneficial
Owners intends upon the expiration of the Restricted
Period, either directly or indirectly through one or more
intermediaries, to trade, arrange for, facilitate, or
participate in any other manner in the trading of, the
Shares in the United States.
(g) All subsequent offers and sales of the Shares shall be
made in compliance with Regulation S, pursuant to the
registration of the Shares under the Securities Act, or
pursuant to an exemption from registration.
(h) Upon payment of the purchase price for the Shares, Buyer
will have assumed the entire economic risk of the
beneficial ownership of the Shares and neither the Buyer
nor any of the Beneficial Owners has directly or
indirectly entered, will not during the Restricted period
enter, and does not intend upon expiration
<PAGE> 4
of the Restricted Period to enter, into any arrangements,
agreements, or understandings with any person resident in
the United States to transfer to such person all or any
part of the economic risk of beneficial ownership of the
Shares or any of the benefits or burdens of such ownership
including but not limited to any rights to buy or sell the
Shares, short selling and other hedging transactions such
as option writing, equity swaps, pleding the Shares as
collateral, either in a margin account or otherwise, where
the lender is in the United States and the expectation is
that the collateralization would shift the benefits and
burdens of ownership to the lender, or other types of
derivative transactions which would result in the transfer of
the benefits and burdens of the ownership of the Shares back
to the United States.
(i) The Buyer does not intend, nor does any Beneficial Owner
indirectly through the Buyer intend, to purchase the
Shares in this Regulation S offering for the purpose of
evading, and such purchase will not constitute a
transaction or a part of a series of transactions that,
although in technical compliance with Regulation S, is
part of a plan or scheme to evade, the registration
provisions of the Securities Act.
(j) The funds which the Buyer is using to purchase the Shares
were not borrowed or otherwise obtained by the Buyer or
by any of the Beneficial Owners, directly or indirectly
through one or more intermediaries, from a source within
the United States of America.
(k) The Buyer has accepted the condition that before any
transfer of the Shares may be made by it, written
approval must first be obtained from Registrant's
counsel.
ITEM 7. EXHIBITS
The following documents are incorporated by reference in this Report
from Registrant's current report on Form 8-K, dated January 10, 1997,
filed with the Securities and Exchange Commission on January 24, 1997,
under the following designation:
Exhibit 4. Offshore Common Stock Subscription Agreement, dated
December 20, 1996, between Registrant and Damask
Holdings Limited with the following Exhibits
appended to such Subscription Agreement:
Exhibit A Certificate of the Directors of the Buyer
Exhibit B Certificate of the Corporate Secretary of
the Buyer
Exhibit C Delivery Against Payment Instructions
<PAGE> 5
SIGNATURE
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.
TIREX AMERICA INC.
Dated: February 19, 1997 By /s/ Terence C.Byrne
Terence C. Byrne, President
<PAGE> 6
