U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 23, 1997
_________________________________________________________________
3D IMAGE TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)
Delaware 33-27627 76-0265438
(State of incorporation) (Commission File Number) (IRS Employer
Identification No.)
5172-G Brook Hollow Parkway, Norcross, Georgia 30071
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (770) 416-8848
including area code:
(Former name and former address, if changed since last report)
3D IMAGE TECHNOLOGY, INC.
TABLE OF CONTENTS
Page
Item 1. Termination of Proposed Acquisition of Control by
VXL Holdings, Sdn. Bhd. 3
Item 1. Termination of Proposed Acquisition of Controlling
Interest by VXL Holdings Sdn. Bhd.
The Company has terminated its negotiations with VXL Holdings
Sdn. Bhd., a Malaysian company limited by shares, with its
principal offices located in Kuala Lumpur, Malaysia, VXL
originally had offered to acquire up to 25 million new preferred
shares of the Company for $5 million, with the first contribution
to be in the amount of $3 million for 15 million preferred
shares. The new preferred shares would vote on a par with the
common shares and could be converted at VXL's election on the
basis of two common shares for each preferred share The remaining
investment of $2 million for an additional 10 million preferred
shares would be made as needed for working capital, as determined
by the Boards of Directors of the two companies. In addition, the
existing $3 million loan to the Company by VXL, which is now in
default, would be reinstated as current with a one year maturity,
and would continue to bear interest. VXL would have the option
during the one year period to convert the $3 million note into
additional equity. The existing 1.5 million shares of the Company
which are partial security for this loan, would be canceled as part
of the original proposed transaction.
The Board of Directors of the Company approved this proposal in
principal and determined to submit the proposal to the shareholders
at a special meeting to be held on December 9, 1997. Subsequent to
the initial offer and the acceptance in principal by the Company's
Board of Directors, VXL modified the original offer. The new
proposal called for an initial investment of only $1.3 million in
return for 8,666,667 shares of preferred stock, with the preferred
shares to have three votes per share. Any additional investment
would be determined by VXL, if needed for the working capital of
the Company. With the proposed three votes per share for the
preferred stock, VXL would have obtained voting control of the
Company for an investment of $1.3 million.
A number of shareholders of the Company indicated dissatisfaction
with the new proposal, which was not submitted to or approved by
the Board of Directors. The shareholders requested that the Special
Meeting of the shareholders scheduled for December 9, 1997 be
postponed to allow additional time to consider the new proposal
and any alternatives. An agreed lock-up period to allow VXL time
to complete due diligence and to finalize the terms of the
acquisition agreement expired on December 5, 1997. No final
agreement containing all of the terms of the new VXL proposal
was ever completed or executed. At the request of the shareholders,
the Special Meeting was postponed until January 1998. On December
18, 1997, VXL advised the Company that it would not pursue the
acquisition.
The Company has reinitiated discussions with other investment
groups which had been suspended as a result of the agreed VXL lock-up
period.
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.
3D IMAGE TECHNOLOGY, INC.
December 23, 1997 /s/ Robert J. Hipple____________________________________
Date ROBERT J. HIPPLE
Corporate Secretary
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