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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) January 26, 1998
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GEOTEK COMMUNICATIONS, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-17581 22-2358635
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
102 Chestnut Ridge Road, Montvale, New Jersey 07645
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(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code 201-930-9305
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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 January 26, 1998, Geotek Communications, Inc. (the "Company")
entered into an agreement (the "Agreement") with a group of investors
(collectively, the "Investors") who hold in the aggregate approximately $39.3
million in face amount of the approximately $47.5 million in face amount of
issued and outstanding shares of the Company's Series O Convertible Preferred
Stock ("Series O Stock") and Series Q Convertible Preferred Stock (the "Series
Q Stock"). Pursuant to the Agreement (i) Investors holding an aggregate of
approximately $12.4 million in face amount of Series O Stock and Series Q
Stock have agreed to convert such shares into shares of the Company's common
stock, $.01 par value per share ("Common Stock") at a conversion price of
$1.00 per share; (ii) Investors holding an aggregate of approximately $15.9
million in face amount of Series O Stock and Series Q Stock have agreed to
exchange such shares for shares of a newly-created series of preferred stock
designated Series R Convertible Preferred Stock ("Series R Stock"), at a ratio
of 1.1111 shares of Series R Stock for each share of Series O Stock or Series
Q Stock and (iii) Investors holding an aggregate of approximately $6.5 million
in face amount of Series O Stock and Series Q Stock have agreed to exchange
such shares for shares of a newly-created series of preferred stock designated
Series S Convertible Preferred Stock ("Series S Stock"), at a ratio of one
share of Series S Stock for each share of Series O Stock or Series Q Stock.
Following completion of the transactions, the Investors will continue to own,
in the aggregate, approximately $4.4 million in face amount of Series O Stock
and Series Q Stock and there will also be an additional approximate $8.1
million in face amount of Series O Stock and Series Q Stock outstanding.
The terms of the Series R Stock will be identical to the Series Q
Stock in substantially all respects, except that (i) the Series R Stock will
be convertible into shares of Common Stock of the Company ("Common Stock"), at
any time, at a fixed conversion price of $2.00 per share, (ii) the Series R
Stock shall automatically convert into shares of Common Stock on that date
which is five years after the date of its issuance at the then prevailing
market price and (iii) the dividends payable to holders of the Series R Stock
at the rate of 10.0% per annum shall be payable in shares of Common Stock. In
addition, the terms of the Series R Stock will not provide the Company with
any blackout or other rights to restrict conversions (except for limited
periods in connection with an underwritten public offering of Common Stock) or
any rights to redeem Series R Stock.
The terms of the Series S Stock will be identical to the Series Q
Stock in substantially all respects, except that (i) the Series S Stock will
be convertible into shares of Common Stock of the Company ("Common Stock"), at
any time, at a fixed conversion price of $4.00 per share, provided that the
conversion price shall be reduced to $3.00 per share if the average of the
closing bid prices for the Common Stock for the ten trading day period
immediately preceding that date which is six months after the date of the
closing of the transactions contemplated by the Agreement (the "Closing") is
less than $4.00 and, further, if the conversion price on that date which is
one year after the closing is greater than 110% of the closing bid price of
the Common Stock on such date, the conversion price shall be 110% of the
closing bid price on such date (ii) the Series R Stock shall automatically
convert into shares of Common Stock on that date which is five years after the
date of its issuance at the then prevailing market price and (iii) the
dividends payable to holders of the Series S Stock at the rate of 10.0% per
annum shall be payable in shares of Common Stock.
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The shares of Series O Stock and Series Q Stock to be converted into
Common Stock at the Closing will be converted at a price of $1.00 per share.
The holders of such shares, except with respect to 850,000 shares of Common
Stock owned by one Investor, will not sell more than one-third of such shares
in each of the first three consecutive thirty-day periods following the
Closing. The shares of Series O Stock and Series Q Stock which the Investors
own following the Closing will become convertible into shares of Common Stock
in increments over the succeeding six-month period.
The Company will file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission no later than the
later of February 10, 1998 and that date which is two business days after the
date of the Closing ( the "Registration Date"), covering the resale of the
shares of Common Stock issued and issuable upon conversion of the Series O
Stock, the Series P Stock, the Series Q Stock, Series R Stock and the Series S
Stock. The Company will pay a cash penalty of 2% of the market value of the
Common Stock or the face amount of the Series R Stock, Series S Stock and
Series Q Stock, as the case may be, on April 1, 1998, if such Registration
Statement is not declared effective by such date, and will pay a cash penalty
of 2% on the first day of each month for each month (or partial month)
thereafter that the Registration Statement has not been declared effective.
The Company also agreed that the exercise price of the warrants
issued to the Investors in connection the issuance of the Series O Stock and
the Series Q Stock will be amended to be $4.00 per share of Common Stock
purchasable thereunder; provided that the exercise price shall be $3.00 per
share of Common Stock purchasable thereunder if the average of the closing bid
prices for the Common Stock for the ten trading day period immediately
preceding that date which is six months after the date of the Closing is less
than $4.00 and provided, further that if the exercise price on that date which
is one year from the date of the Closing is greater than 110% of the closing
bid price of the Common Stock on such date, the exercise price shall be 110%
of the closing bid price of the Common Stock on such date.
If the Company fails to (i) file the Registration Statement with the
SEC on or prior to the Registration Date and/or the Registration Statement is
not declared effective on or prior to that date which is 120 days after the
date of the Closing, (ii) receive at least $30 million in net proceeds that
can be applied in the first half of 1998 for general working capital purposes
from the sale of its European networks prior to March 15, 1998, (iii) receive
at least $25 million in proceeds from new financings prior to May 15, 1998
that can immediately be applied for general working capital purposes or (iv)
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receive at least $50 million (in the aggregate, including the proceeds
referred to in clause (iii) above) in proceeds from new financings prior to
September 15, 1998 that can immediately be applied for general working capital
purposes (each of the financings referred to in clauses (iii) and (iv) shall
be referred to as a "New Financing"), each holder of Series R Stock and Series
S Stock, as the case may be, shall have the right, exercisable for thirty days
after the happening of such event, to exchange its then remaining shares of
Series R Stock or Series S Stock, as the case may be, for shares of Series O
Stock or Series Q Stock for which such shares of Series R Stock or Series S
Stock, as the case may be, were originally exchanged.
Any holder of Series R Stock or Series S Stock shall have the right,
exercisable for ten days after consummation of a New Financing to (i) exchange
shares of preferred stock held by such party for an equivalent amount of
securities issued in the New Financing and/or (ii) purchase securities on the
same terms and conditions as the New Financing in an amount equal to the face
amount of Series R Stock or Series S Stock, as the case may be, then held by
such holder.
The Company has also agreed that it will, no later than thirty days
after the date of the Closing, enter into agreements with the holders of its
Series P Convertible Preferred Stock ("Series P Stock") to either restructure
the Series P Stock on substantially similar terms as the terms provided for in
the Agreement or have such holders agree that they shall not convert any
additional shares of Series P Stock into shares of Common Stock prior to
September 30, 1998.
The Agreement will terminate if definitive documentation regarding
the transactions contemplated thereby is not executed on or prior to February
6, 1998.
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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.
GEOTEK COMMUNICATIONS, INC.
Date: January 30, 1998 By: /s/ Robert Vecsler
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Name: Robert Vecsler
Title: Secretary and General Counsel
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