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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 (Date of earliest event reported): November 5, 1997
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CONNECT, Inc.
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(Exact name of registrant as specified in charter)
Delaware
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(State or other jurisdiction of incorporation)
000-20873 77-0431045
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(Commission File Number) (IRS Employer Identification No.)
515 Ellis Street, Mountain View, California 94043
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 254-4000
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On November 5, 1997, CONNECT, Inc. (the "Company") announced that it had
entered into agreements that initially would raise $10 million through the
issuance in a private placement of units consisting of convertible debt
securities and warrants (the "Units"). Each Unit will be sold for $40,000 and
will consist of a convertible note in the principal amount of $40,000 (a "Note")
and a warrant to purchase shares of Common Stock (a "Warrant"). Each Note will
accrue interest at a rate of 5% per annum and is convertible at the option of
the holder into shares of the Company's Common Stock at a price per share equal
to the lesser of (i) $2.00 or (ii) 80% of the average closing bid price of the
Company's Common Stock during the 10 trading days prior to conversion. Each
Warrant is exercisable at any time within three years after the date of issuance
to purchase 13,333 shares of the Company's Common Stock at a price of $2.50 per
share. The Company is obligated to file with the Securities and Exchange
Commission shortly after the closing of the initial sale of the Units a
registration statement on Form S-3 with respect to the resale of the shares
issuable upon conversion of the Notes and exercise of the Warrants. The Company
has reserved the right to issue up to an additional $2 million of Units (in
excess of the $10 million described above) within a short period of time after
closing the initial sale of Units. Further details of this transaction are
contained in the Company's press release dated November 5, 1997, filed as an
exhibit hereto and incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
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Exhibit 99.1 CONNECT, Inc. Press Release dated November 5, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CONNECT, Inc.
(Registrant)
Dated: November 11, 1997 By: /s/ JOSEPH G. GIRATA
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Joseph G. Girata
Vice President of Finance and
Administration and Chief Financial Officer
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EXHIBIT 99.1
Company Press Release
Connect Inc. Announces $10 Million New Financing
MOUNTAIN VIEW, Calif., Nov. 5 /PRNewswire/ -- CONNECT, INC. (Nasdaq:CNKT),
announced today that it has entered into agreements that initially would raise
$10 million through the issuance in a private placement of units consisting of
convertible debt securities and warrants (the ``Units''). Each Unit will be sold
for $40,000 and will consist of a $40,000 principle amount convertible note (a
``Note'') and a warrant (a ``Warrant''). Each Note will accrue interest at a
rate of 5% per annum and is convertible at the option of the holder into shares
of the Company's Common Stock at a price per share equal to the lesser of (i)
$2.00 or (ii) 80% of the average closing bid price of the Company's Common Stock
during the 10 trading days prior to conversion. Each Warrant is exercisable at
any time within three years after the date of issuance to purchase 13,333 shares
of the Company's Common Stock at a price of $2.50 per share. The Company is
obligated to file with the Securities and Exchange Commission shortly after the
closing of the initial sale of the Units a registration statement with respect
to the resale of the shares issuable upon conversion of the Notes and exercise
of the Warrants. The Company has reserved the right to issue up to an additional
$2 million of Units (in excess of the $10 million described above) within a
short period of time after closing the initial sale of units.
The closing of the initial sale of Units is expected to occur in mid-November
1997, subject to certain closing conditions. The purpose of the offering is to
provide funds for working capital and general corporate purposes.
Any such securities sold by the Company will not be registered under the
Securities Act of 1933, as amended, or any state securities laws, and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements.
