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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 29, 1997
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Pioneer Commercial Funding Corp.
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(Exact Name of Registrant as Specified in Charter)
New York 0-24940 13-3763437
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(State of Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
6660 Reseda Blvd., Reseda, CA 91335
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (818) 776-0590
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
The Registrant entered into a written agreement, effective January 29,
1997, with Leedan, an indirect stockholder of the Registrant and certain other
unaffiliated investors for a $4,000,000 private placement by the Registrant of
unregistered and restricted common stock and convertible notes at a subscription
price of $1.00 per share of common stock and a conversion rate of one share of
common stock for each $1.00 of convertible notes. Closing of the transaction is
subject to the fulfillment of certain conditions, including obtaining any
necessary consents of third parties and governmental authorities, including the
Bank of Israel, and compliance with applicable filing requirements. The
Registrant presently anticipates that the transaction will close in mid-to late
February.
ITEM 7. EXHIBITS
Exhibit 99.1 Press Release of the Registrant, dated February 5, 1997
Exhibit 99.2 Agreement, dated as of January 29, 1997, among the Registrant,
Leedan Business and Management Ltd. and Jay Botchman
SIGNATURES
Pursuant to the requirement 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.
PIONEER COMMERCIAL FUNDING CORP.
Date: February 6, 1997 By: /S/ M. Albert Nissim
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M. Albert Nissim
President
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EXHIBIT TABLE
EXHIBIT NUMBER EXHIBIT
Exhibit 99.1 Press Release of the Registrant, dated February 5, 1997
Exhibit 99.2 Agreement, dated as of January 29, 1997, among the
Registrant, Leedan Business and Management Ltd. and Jay
Botchman
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Exhibit 99.1
PIONEER ANNOUNCES
PRIVATE PLACEMENT AGREEMENT
New York, New York, February 5, 1997:
Pioneer Commercial Funding Corp. (NASDAQ Small Cap Market; PCFC, PCFCW)
announced today that it entered into a written agreement effective January 29,
1997, confirming its previously announced oral commitment with Leedan, an
indirect stockholder of the Company, and certain other unaffiliated investors
for a $4,000,000 private placement by the Company of unregistered and restricted
common stock and convertible notes at a subscription price of $1.00 per share of
common stock and a conversion rate of one share of common stock for each $1.00
of convertible notes. The Company anticipates that the transaction will close
in mid-to-late February.
Pioneer Commercial Funding Corp. is a California-based mortgage warehouse
lender. For further information, contact Mr. M. Albert Nissim, President,
telephone number (212) 935-8339.
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Exhibit 99.2
PIONEER COMMERCIAL FUNDING CORP.
6660 Reseda Boulevard
Reseda, California 81330
As of January 29, 1997
To the Individuals and Entities
listed on the Signature Page hereto:
Re: Private Placement Share Subscription
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Gentlemen:
When countersigned by you, this letter will confirm our agreement for
the purchase by each of you or your affiliate(s) or approved designee(s)
(collectively, the "Investors") of certain unregistered securities to be issued
by Pioneer Commercial Funding Corp. (the "Company"), as follows:
1. Subscription. Each Investor will subscribe for the
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following newly-issued, unregistered securities (collectively, the "Securities")
of the Company:
(a) The number of shares (the "Shares") of common stock,
par value $.01 per share ("Common Stock"), set forth
opposite such Investor's name on Schedule 1 annexed
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hereto.
(b) The convertible promissory notes in the original
principal amounts set forth opposite such Investor's
name on Schedule 1 annexed hereto (the "Notes"),
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convertible into shares (the "Conversion Shares") of
Common Stock on the terms set forth in paragraph 3
below.
2. Consideration. At the closing of the transaction,
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the Investors will pay the following consideration to the Company, in cash, as
follows:
(a) Subscription Price per Share: $1.00 per Share.
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(b) Issue Price of the Note: Face value.
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3. Conversion of Notes. Each of the Notes shall be
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convertible, in whole and not in part, into one share of Common Stock for each
$1.00 principal amount of Notes, as follows:
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As of January 29, 1997
Page 2
(a) Each Investor acknowledges that the Company does not
presently have sufficient authorized and unreserved
Common Stock to issue the Conversion Shares and that,
accordingly, the Company will undertake to amend its
certificate of incorporation, no later than a mutually
acceptable date (the "Conversion Date"), to increase
the number of authorized shares of Common Stock so as
to enable the Company to issue the Conversion Shares.
(b) On the Conversion Date, each Note shall automatically
be converted into the Conversion Shares, and the Note
payment obligations will terminate.
(c) The Note will not bear interest for the first three
(3) months after issuance, and will bear interest at
the annual rate of 8% thereafter.
4. Securities Unregistered. Each Investor acknowledges that
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the Securities will not have been registered under applicable state and federal
securities laws by reason of certain exemptions therefrom which will depend
upon, among other things, such Investor's status as an "Accredited Investor"
under U.S. securities laws. Accordingly, the Securities will be "restricted
securities" which will not be transferable in the absence of an effective
registration statement under the Securities Act of 1933, as amended, or an
exemption therefrom.
5. Definitive Agreements. Promptly following execution of this
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letter, the Company shall cause its counsel to prepare and submit to each
Investor and its counsel definitive Securities subscription documentation (the
"Definitive Documentation") containing provisions consistent with the contents
of this letter, together with such further terms and conditions as are customary
for a transaction of this nature. Among other things, the Definitive
Documentation shall provide for a closing date no later than February 28, 1997.
6. Conditions Precedent. The parties' obligation to consummate
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the transactions contemplated hereby shall be subject to the condition precedent
that all consents of third parties, including financial institutions and
governmental authorities (and including, but not limited to, NASDAQ and the Bank
of Israel) or filings required for consummation of the transaction contemplated
hereby shall have been obtained or filed.
7. Miscellaneous. The closing of these transactions shall be
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subject to the terms of the Definitive Documentation. Each of the parties shall
bear its own expenses incurred in connection with this letter and the
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As of January 29, 1997
Page 3
transactions described herein including, without limitation, legal and
accounting fees. The parties represent and warrant to one another that, other
than with respect to finder's fees payable to Boru Enterprises, whose fees shall
be paid by the Company, no broker, finder, agent or intermediary brought about
the transactions contemplated by this letter and that no party is entitled to
any brokerage commission, finder's fee or other compensation in connection with
such transactions.
If the foregoing accurately sets forth our understanding, please so
signify by signing this letter in the space provided and return it to the
undersigned, whereupon this letter will constitute an agreement in principle
between the parties in accordance with the terms and provisions set forth above,
and will supersede all prior agreements between us with respect to the matters
set forth herein.
Very truly yours,
PIONEER COMMERCIAL FUNDING CORP.
By: /S/M. Albert Nissim
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Name: M. Albert Nissim
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Title: President
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ACCEPTED AND AGREED TO:
LEEDAN BUSINESS & MANAGEMENT, LTD.
By: /S/Yoav Navon
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Name: Yoav Navon
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Title: Director
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By: /S/Boaz Harel
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Name: Boaz Harel
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Title: Chief Executive Officer
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/S/Jay Botchman
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JAY BOTCHMAN
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SCHEDULE 1
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<TABLE>
<CAPTION>
NO. OF COMMON SHARES
TO BE PURCHASED CONVERTIBLE
INVESTOR AT $1.00/SHARE NOTE AMOUNT
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<S> <C> <C>
Leedan Business & Management, Ltd. 1,375,000 $1,125,000
Jay Botchman 825,000 675,000
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TOTAL
PRINCIPAL
TOTAL SHARES: 2,200,000 OF NOTES: $1,800,000
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