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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): FEBRUARY 5, 1997
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SPATIALIGHT, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 000-19828 16-1363082
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer)
incorporation or organization) Identification No.)
8-C COMMERCIAL BOULEVARD 94949-6125
NOVATO, CALIFORNIA
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 883-2693
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ITEM 5. OTHER EVENTS.
(a) MATERIAL LITIGATION. By letter dated January 13, 1997, counsel for
Jalcanto, Ltd. and Sabotini, Ltd. (the "Investors") notified the Company that
these Investors were electing to rescind the Share Purchase Agreements dated
July 10, 1996, as amended, under which the Investors purchased a total of
2,135,000 shares of common stock in the Company, and were demanding a refund by
January 17, 1997 of the purchase price of such shares, or $1,783,125, plus
interest. The alleged ground for rescission is the fact that the registration
statement on Form S-3 pertaining to the resale of such shares (filed with the
SEC November 27, 1996) (the "Form S-3") was not declared effective by the SEC on
or before December 31, 1996. Subsequently, by letter dated February 3, 1997,
counsel for the Investors notified the Company that Jalcanto, Ltd. has retracted
its demand for rescission, with reservation of all rights. The letter
reiterated the rescission demand on behalf of Sabotini Ltd., and the request
that the Company return $891.562.50.
On February 5, 1997, the Company was served notice that it has been sued by
each of the Investors in the Superior Court of the State of California for the
County of Marin (the suit by Jalcanto Ltd. is case number 169772, the suit by
Sabotini Ltd. is case number 169773). Each Investor filed a complaint for
breach of contract, specific performance and indemnification based on the
alleged failure to timely complete the Form S-3. In addition, each complaint
requests that the court issue a preliminary and permanent injunction against
future issuances of shares of the Company's common stock or securities
convertible into common stock without the Investor's consent. The complaint
filed by Sabotini Ltd. also requests rescission and the return of the full
purchase price of its shares.
Along with its complaint, Sabotini Ltd. has requested that the court
immediately issue a writ to attach approximately $920,000 of the Company's
assets as security for the ability to enforce any eventual judgement. A hearing
on the application for a writ of attachment is set for February 26, 1997. If
the court issues a writ of attachment, the Company would be deprived of
substantially all of its working capital, which would have an immediate and
material adverse effect on the Company's business and financial position and its
ability to fund ongoing operating expenses.
The Company intends to defend itself vigorously in both actions. The
Company may be required to expend substantial funds and management resources in
connection with the defense and any settlement or judgement, which could have a
material adverse effect on the Company's business and financial position.
(b) PROPOSED DELISTING. By letter dated January 29, 1997, the Company
received notice from representatives of NASDAQ that it is scheduled for imminent
delisting from the Nasdaq SmallCap Market because the Company does not meet the
$2 million minimum total asset requirement for continued listing. The Company
has requested a hearing to review that determination with NASDAQ officials. A
hearing date has not been set, but is expected to occur within a few weeks.
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.
SPATIALIGHT, INC.
Date: February 12, 1997 By: /s/ WILLIAM E. HOLLIS
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William E. Hollis, President
