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UNITED STATES
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) December 9, 1998
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SpatiaLight, Inc.
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(Exact name of registrant as specified in charter)
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New York 000-19828 16-1363082
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8-C Commercial Boulevard, Novato, California 94949-6125
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (415) 883-1693
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On November 13, 1998, the Registrant issued Convertible Secured
Notes to twenty investors (the "Lenders") for an aggregate purchase price of
$1,362,499 (the "Notes"). The Lenders have already delivered funds equal to
25% of the aggregate purchase price, and are obliged to deliver an additional
25% when (i) the Registrant's 1280 x 1024 liquid crystal display design is
delivered to the foundry; (ii) the Registrant shall have demonstrated a fully
functioning projection display unit, and (iii) a study of the Registrant's
intellectual property, to be conducted by a third party agreed upon by the
Registrant and the Lenders, shall have been completed. The Notes are secured
by the assets of the Registrant, and the principal and accrued interest under
the notes is due and payable in full on December 31, 1998 unless the
Registrant elects to exercise its option to extend the maturity date of the
Notes until December 31, 1999, which option is subject to the fulfillment of
the following conditions: (i) the Registrant has developed and demonstrated a
fully functioning projection display unit; (ii) the Registrant has entered
into one or more written agreements which will generate not less than
$250,000.00 of revenue for the Registrant prior to December 31, 1999; and
(iii) the Registrant has paid all interest accrued on the principal amount
outstanding under the Notes through December 31, 1998. The Notes bear
interest at a rate of 6% per annum, and are convertible, at the option of the
holders, into shares of the Registrant's Common Stock at a conversion price
of $0.75 per share. The following events, among others, are considered an
event of default under the Notes: (i) the failure of the Registrant to
deliver audited financial statements for the fiscal years ending December 31,
1997 and December 31, 1998 to the Lenders on or before March 31, 1998; (ii)
the Registrant's actual revenues are less than 75% of certain projections
delivered to the Lenders for any calendar quarter beginning after December
31, 1998 and (iii) the death, total disability or resignation or removal of
Robert Olins from the board of directors of the Registrant.
The foregoing description of the Convertible Secured Notes financing
is qualified in its entirety by the Convertible Secured Loan Agreements by
and between the Registrant and each of the Lenders, and the other agreements
and instruments executed in connection therewith, copies of the form of which
are incorporated by reference as exhibits to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
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Exhibit
No. Description
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4.1 Form of Convertible Secured Loan Agreement (incorporated by reference to Exhibit 3 of the
Lenders' Schedule 13D, as filed with the Commission as of November 25, 1998)
4.2 Form of Convertible Secured Note (incorporated by reference to Exhibit 2 of the Lenders'
Schedule 13D, as filed with the Commission as of November 25, 1998)
4.3 Form of Security Agreement (incorporated by reference to Exhibit 4 of the Lenders'
Schedule 13D, as filed with the Commission as of November 25, 1998)
4.4 Form of Intercreditor Agreement (incorporated by reference to Exhibit 5 of the Lenders'
Schedule 13D, as filed with the Commission as of November 25, 1998)
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4.5 Form of Registration Rights Agreement (incorporated by reference to Exhibit 6 in the
Lenders' Schedule 13D, as filed with the Commission as of November 25, 1998)
4.6 Form of Note Holder's Representative Agreement (incorporated by reference to Exhibit 7 in
the Lenders' Schedule 13D, as filed with the Commission as of November 25, 1998)
99.1 Press Release of SpatiaLight, Inc. dated December 2, 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.
SPATIALIGHT, INC.
Date: December 9, 1998 By: /s/ Michael H. Burney
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Chief Executive Officer
(Principal Executive
Financial and Accounting
Officer)
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EXHIBIT INDEX
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Exhibit
No. Description
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4.1 Form of Convertible Secured Loan Agreement (incorporated by reference to Exhibit 3 of the
Lenders' Schedule 13D, as filed with the Commission as of November 25, 1998)
4.2 Form of Convertible Secured Note (incorporated by reference to Exhibit 2 of the Lenders'
Schedule 13D, as filed with the Commission as of November 25, 1998)
4.3 Form of Security Agreement with the Commission (incorporated by reference to Exhibit 4 of
the Lenders' Schedule 13D, as filed with the Commission as of November 25, 1998)
4.4 Form of Intercreditor Agreement with the Commission (incorporated by reference to Exhibit 5
of the Lenders' Schedule 13D, as filed with the Commission as of November 25, 1998)
4.5 Form of Registration Rights Agreement (incorporated by reference to Exhibit 6 in the
Lenders' Schedule 13D, as filed with the Commission as of November 25, 1998)
4.6 Form of Note Holder's Representative Agreement (incorporated by reference to Exhibit 7 in
the Lenders' Schedule 13D, as filed with the Commission as of November 25, 1998)
99.1 Press Release of SpatiaLight, Inc. dated December 2, 1998
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
SPATIALIGHT ANNOUNCES
PRIVATE CONVERTIBLE NOTE FINANCING
Novato, California, December 2, 1998 -- [OTCBB: HDTV] SpatiaLight, Inc.
announced today that during 1998 the Company has issued $3,550,499 in
principal amount of convertible secured notes in a series of private
placements to accredited investors. The capital raised has been and will be
used for product development and general working capital needs. SpatiaLight
also anticipates that in the next several months it may issue an additional
$600,000 of convertible secured notes on similar terms, based on the
Company's working capital needs. "The Company secured this financing in order
to enable it to complete the third and fourth generations of our liquid
crystal on silicon miniature displays and provide the necessary operating
funds to begin mass manufacturing" said Michael Burney CEO of Spatialight,
Inc.
The accredited investors' convertible secured notes in the amount of
$2,362,499 are secured by the assets of the Company and bear interest at a
rate of 6% per annum. These notes are short term and can be extended at the
election of the Company until December 31, 1999 provided that certain
conditions are satisfied. These notes are convertible into shares of the
Company's common stock at any time at the election of the holders at a
conversion price of $.75 per share. In addition, the Company has issued
120,000 series A, B, and C warrants in this transaction as finders fees.
These warrants entitle the holders to purchase shares of the Company's common
stock at exercise prices ranging from $1.50 per share to $2.50 per share and
have exercise periods from 2 to 4 years.
During the first six months of this year, a series of convertible secured
notes in principal amount of $1,188,000 were placed with Argyle Capital
Management Corporation, a company affiliated with a director of the Company.
No warrants were issued in this transaction with Argyle Capital Management.
The convertible secured notes issued to both Argyle Capital Management and
the accredited investors are governed by an inter-creditor agreement.
The convertible notes, the warrants and the underlying shares of the
Company's common stock have not been registered under the Securities Act of
1933, as amended ("the Act"), and may not be offered or sold in the United
States absent registration or an applicable exemption from the registration
requirements of the Act.
SpatiaLight is developing high resolution, miniature reflective liquid
crystal displays intended for use in large screen rear projection computer
monitors and home theater projection systems as well as other display
applications. SpatiaLight is quoted on the OTC Bulletin Board under the
market symbol HDTV.
Contact: Michael H. Burney, CEO
Sandi Harrison, Shareholder Relations
SpatiaLight, Inc.
415-883-1693 - Office
415-883-3363 - Fax
Web Site: http://www.spatialight.com
E-mail: [email protected]
