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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): February 18, 1998
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THE QUARTZ GROUP, INC.
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(Exact name of registrant as specified in its charter)
Colorado 33-31068 84-1067075
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation File No.) Identification No.)
245 Fischer Ave., Suite A-1, Costa Mesa, California 92626
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 854-0860
Former Name: BROWN DISC PRODUCTS COMPANY, INC.
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(Former name or former address, if changed since last report)
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THE QUARTZ GROUP, INC.
(formerly named Brown Disc Products Company, Inc.)
ITEM 5. OTHER EVENTS
BREACH OF SUBSCRIPTION AGREEMENTS
During the period from September 19, 1997 through September 30, 1997, The
Quartz Group, Inc. (the "Company") issued subscription documents in three
related private placement offerings for total consideration of $900,000, for
the following securities: (i) a limited recourse, non-interest bearing
promissory note of $750,000 (the "Limited Recourse Note"), (ii) 9,000,000
shares of the Company's common stock and (iii) common stock purchase warrants
exercisable at $0.25 per share expiring on September 30, 2002 to purchase an
additional 6,500,000 shares of the Company's common stock.
The subscribed securities ("Subscribed Securities) were sold in three
related offerings, as follows:
(A) For the purchase price of $50,000 to be paid by two investors, Donna Kull
and a corporate entity named Yes Corp., on September 19, 1997 the Company
sold a total of 1,000,000 shares of common stock.
(B) For the purchase price of $750,000 to be paid by one investor, John Kull,
on September 23, 1997 the Company sold (i) the $750,000 principal amount
Limited Recourse Note, (ii) 7,000,000 shares of common stock and (iii)
Class E common stock purchase warrants to purchase an additional 6,000,000
shares of common stock exercisable at $0.25 per share expiring on September
30, 2002 (the "Class E Warrants").
(C) For the purchase price of $100,000 to be paid by Christina G. Etchison
and Donald P. Etchison, on September 30, 1997 the Company sold
subscriptions (i) 1,000,000 shares of common stock and (ii) Class F common
stock purchase warrants to purchase an additional 500,000 shares of common
stock exercisable at $0.25 per share expiring on September 30, 2002 (the
"Class F Warrants").
Of the Subscribed Securities, only $100,000 has been paid by Christina G.
Etchison. Despite repeated demands, and after repeated assurances by John
Kull and Donna Kull and Yes Corp., the remaining subscriptions have not been
paid. On January 26, 1998, a check in the amount of $250,000 was tendered by
John Kull towards the Subscribed Securities. This check was returned for
non-sufficient funds. Based on this, the Company has concluded that the
remaining $800,000 of Subscribed Securities will not be paid.
The private placement of the Subscribed Securities was reported as a
change in control of registrant on Form 8-K pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 on September 30, 1997.
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Based on this conclusion, the following table has been amended from the
table as shown on the Company's September 30, 1997 Form 8-K to reflect the
reduction of outstanding securities as described herein:
<TABLE>
<CAPTION>
Number of Shares or Warrants Outstanding
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Outstanding Changes Outstanding
at During at
Class or Series March 31, 1997 the Period Sept. 30, 1997
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<S> <C> <C> <C>
Series A Redeemable Preferred
stock, no par value,
liquidation preference
$11.00 per share 12,613 -0- 12,613
10% Series B Convertible
Preferred stock, no par
value, liquidation
preference $5.00 per
share 6,000 (4,000) 2,000
Common stock, no par value 5,729,837 2,349,963 8,079,800
Common Stock Purchase Warrants:
Class A warrants 2,000,000 (2,000,000) -0-
Class B warrants 1,000,000 (1,000,000) -0-
Class C warrants 112,350 -0- 112,350
Class D warrants 410,000 -0- 410,000
Class E warrants -0- -0- -0-
Class F warrants -0- 500,000 500,000
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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 thereunto duly authorized.
Date: February 18, 1998
THE QUARTZ GROUP, INC.
(Registrant)
By: /s/ David J. Lopes
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David J. Lopes, President, Chief Executive Officer,
Chief Financial Officer and Chief Accounting Officer
