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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): September 10, 1997 (September
5, 1997)
NORRIS COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-20734 None
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(State or other jurisdiction of (Commission (I.R.S. Empl. Ident. No.)
incorporation or organization) File Number)
13114 Evening Creek Drive South, San Diego, California 92128
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(Address of principal executive offices) (Zip Code)
(619) 679-1504
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
By agreements dated September 5 and 8, 1997 the Company amended the terms of
certain Common Stock Warrants issued in 1996.
In June-August 1996, the Company sold warrants ("Warrants") with a face value of
$3,805,900. The Warrants were exercisable, without further cash payment, into
common shares of the Company at the lessor of $0.70 per common share (with
respect to $805,900 of Warrants and $0.69125 per common share (with respect to
$3,000,000 of Warrants) or a 30% discount to the five day average closing bid
price of the common shares on the day prior to exercise. The exercise price of
the Warrants was further discounted by 7% per year and for other events until
the warrants were exercised.
To date Warrant holders have exercised Warrants with a face value of $2,651,491
into 28,980,553 common shares (inclusive of penalties and discounts). The
balance of the remaining three Warrants presently outstanding is $1,154,409
(face value). In determining the number of shares of common stock to be issued
upon exercise, the Company adjusts the face value of the Warrants upward to
reflect penalties and the 7% annual discount. The adjusted value of the Warrants
is approximately $1.42 million and as of September 8, 1997 such Warrants were
exercisable into approximately 19.4 million shares. However, pursuant to the
formula the number of shares issuable upon exercise of the Warrants could be
substantially greater and the actual number is indeterminate.
On August 6, 1997 the Company suspended the Warrant holder's ability to exercise
Warrants pursuant to their terms due to the lack of authorized shares in excess
of those reserved for other warrants and options. The suspension extends the
term of the Warrants for the suspension period and provides suspended holders
the benefit of the lower of the price at suspension or after the suspension is
cured. The Company is obligated to take such corporate action as may be
necessary or appropriate to increase its authorized but unissued common shares.
On September 5 and September 8, 1997 the remaining three Warrant holders
executed Amendment No. 1 to the Common Stock Warrant. Among other terms, the
Amendment fixes the exercise price at $0.0875 per share subject to certain
adjustments. The fixed price of $0.0875 per share may be adjusted down (i) to
80% of the market price following certain changes in the Company's common stock
including a reverse stock split, and (ii) to the price at which new securities
are issued if at a price below $0.0875 per common share. At the fixed price of
$0.0875 per share the remaining Warrants ($1.42 million, as adjusted) are
convertible into approximately 16.2 million shares. The number of shares
issuable further increases by 7% per annum.
Under terms of the Amendment, the Company is obligated to make 1,000,000
additional common shares available for exercise by Warrant holders by September
30, 1997 from shares presently reserved for other warrants and options and a
second 1,000,000 common shares to be made available by October 31, 1997. The
Company also has agreed to hold a stockholders meeting or otherwise conduct a
consent solicitation to increase the authorized number of shares on or before
December 15, 1997 and have sufficient shares authorized by January 31, 1998.
Failure by the Company to meet these conditions allows the Warrant holders, at
their option, to nullify the Amendment. Failure to obtain stockholder approval
for additional authorized common shares could have a material adverse impact on
the Company.
The Company has 60,000,000 common shares authorized with 54,413,403 common
shares issued and outstanding.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
None
(b) Pro forma financial information.
None
(c) Exhibits
4.11.1 Form of Amendment No. 1 To Common Stock Warrant Between the
Company and three Warrant Holders holding an aggregate of
$1,154,409 face value of warrants granted in July and August 1996
(Each Amendment is identical except for the dates and the name of
the Warrant Holder)
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.
NORRIS COMMUNICATIONS, INC.
Date: September 10, 1997 By: /s/ ALFRED H. FALK
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Alfred H. Falk
President
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NORRIS COMMUNICATIONS, INC.
EXHIBIT 4.11.1
Form of Amendment No. 1 To Common Stock Warrant
(Each Amendment is identical except for the dates
and the name of the Warrant Holder)
AMENDMENT NO. 1
TO
COMMON STOCK WARRANT
The Common Stock Warrant, dated _______, 1996, by Norris Communications,
Inc. ("Company") in favor of __________________ ("Holder"), is hereby amended as
follows:
1. The Exercise Price of the Warrant set forth in Section 4 shall
be the lesser of (i) $0.0875 per share or (ii) eighty percent (80%) of
the average closing bid price for the Common Stock for the 10 trading
days immediately following any and each distribution in shares,
subdivision, split up, combination, reclassification, or other change in
Common Stock including the changes described in Section 7. The Exercise
Price shall be further amended for any new issuances by the Company of
common shares or securities convertible into common shares for per share
consideration less than $0.0875 or the then effective Exercise Price. On
the date of such issuance the Exercise Price shall be adjusted to the
effective issuance price for the new securities.
This amended Exercise Price shall still be adjusted (or the face
value adjusted prior to division by the Exercise Price) as provided in
Section 4(c) to reflect the 7% additional amount and to reflect prior
penalties. The amended Exercise Price shall also be subject to
adjustment as provided in Section 7.
2. The Maximum Coverage Price requirement of Section 3 (b) shall
be terminated and the Company shall be obligated to maintain sufficient
Common Shares for exercise consistent otherwise with the terms of
Section 3 (b).
3. While the further exercise of warrants has been suspended by
the provisions of Section 3(b), it is agreed that prior to the
authorization of additional common shares that any available common
shares arising from option expiration, option and warrant cancellations
or other similar events shall be offered for issuance prorata to
existing warrant holders based on the face value of each warrant. Any
amount not accepted by a warrant holder shall be offered for issuance
amongst any remaining holders. The Company shall cause a minimum of
1,000,000 common shares to be made available from the shares reserved
for presently outstanding stock options and warrants on or before
September 30, 1997. The Company shall make available an additional
1,000,000 common shares from these sources on or before October 31, 1997
unless additional common shares are authorized prior thereto. The
Company, in addition, shall utilize its reasonable best efforts to make
additional reserved shares available for issuance to warrantholders on
or before December 31, 1997.
4. No warrant holder shall be entitled to exercise its warrants
in whole or in part, if, as a result of such exercise, such holder will
own more than 9.9% of the outstanding shares of the Company. Any attempt
by holder to exercise and acquire more than 9.9% shall automatically be
deemed void as to such excess. It shall be the obligation of the holder
to accurately report to the Company its holdings at each exercise in
compliance with this amendment. This item 4 amendment shall be effective
as of _______, 1996.
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Amendment No. 1
Page 2 of 2
5. The Company shall call and hold a stockholders meeting or
otherwise conduct a consent solicitation on or before December 15, 1997
for the purpose of seeking approval to increase the authorized number
shares of common stock. The Company shall utilize its best efforts to
prepare and file a preliminary proxy statement or consent solicitation
with the Securities and Exchange Commission on or before September 30,
1997, conditioned on timely completion of the proposed offering, and to
diligently pursue approval of the proposed share increase. Should the
Company propose a reverse stock split or consolidation, no such share
adjustment shall be effective prior to 60 days after additional shares
issuable to the Holders are authorized, registered, legally available
for sale and available for delivery by the transfer agent. The Company
shall reserve sufficient common shares for the Holders to exercise the
balance of the Warrants according to their terms at the Exercise Price
from the first of any new common share authorizations.
Failure by the Company to either (i) comply with the additional share
requirement of item 3 or (ii) take the actions and to obtain the approvals for
additional authorized common shares specified in item 5 at such meeting
(including any adjournment thereof up to January 31, 1998) or, with respect to a
consent solicitation, at the expiration of any consent solicitation period
(including extensions up to January 31, 1998), shall enable the holder to
nullify this amendment at the holders option to be specified to the Company in
writing within 5 days of such failure.
Except as provided in this Amendment No. 1 to Common Stock Warrant, all
terms and provisions of the Common Stock Warrant are in full force and effect,
and have not been changed, amended or modified.
IN WITNESS WHEREOF, this Amendment No. 1 to Common Stock Warrant is
entered into as of this ___ day of September, 1997.
"Company"
NORRIS COMMUNICATIONS, INC.
a Delaware corporation
By: /s/ FRED FALK
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Fred Falk
Title: President
"Holder"
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By:
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Title:
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