<PAGE>
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) - April 15, 1998
DATA RACE, INC.
(Exact name of registrant as specified in its charter)
TEXAS
(State or other jurisdiction of incorporation)
0-20706 74-2272363
(Commission File Number) (I.R.S. Employer Identification No.)
12400 NETWORK BLVD.
SAN ANTONIO, TEXAS 78249
(210) 263-2000
(Address of Principal Executive Offices and Telephone Number,
Including Area Code)
<PAGE>
ITEM 5. OTHER EVENTS.
On November 12, 1997, the Company completed the first closing of a private
placement of its 1997 Series C Convertible Participating Preferred Stock
("Preferred Stock") and Stock Purchase Warrants ("Warrants") with four
investment firms (the "Investors"), at an aggregate price of $5,000,000. At such
time, the Investors agreed, subject to certain conditions, to purchase at a
second closing, on or before January 29, 1998, additional shares of Preferred
Stock and Warrants at an aggregate price of $3,000,000. In January 1998, the
Company and the Investors agreed to delay the second closing to April 15, 1998,
and to modify or eliminate a number of the conditions to the closing. The
Company believes that it has met all of the conditions necessary for the
immediate second funding of the additional shares of the Preferred Stock and
Warrants at an aggregate price of $3,000,000. However, the Company has
determined that an immediate funding may not be in the best interests of the
shareholders because of the dilution caused by the current stock price. As a
result, on April 14, 1998, the Company and the Investors agreed to delay the
second closing until June 1, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
10.1 Amendment No. 2 dated April 14, 1998 to the Securities
Purchase Agreement dated November 7, 1997
10.2 Amendment No. 1 dated January 30, 1998 to the Securities
Purchase Agreement dated November 7, 1997 (incorporated
herein by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q dated February 5, 1998)
10.3 Securities Purchase Agreement dated effective November
7, 1997 (incorporated by reference to the Company's
Current Report on Form 8-K dated November 20, 1997).
</TABLE>
2
<PAGE>
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.
DATA RACE, Inc.
Date: April 15, 1998 By: /s/ GREGORY T. SKALLA
------------------------------------
Gregory T. Skalla,
Vice President-Finance, Chief Financial
Officer, Treasurer and Secretary
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
10.1 Amendment No. 2 dated April 14, 1998 to the Securities
Purchase Agreement dated November 7, 1997
10.2 Amendment No. 1 dated January 30, 1998 to the Securities
Purchase Agreement dated November 7, 1997 (incorporated
herein by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q dated February 5, 1998)
10.3 Securities Purchase Agreement dated effective November
7, 1997 (incorporated by reference to the Company's
Current Report on Form 8-K dated November 20, 1997).
</TABLE>
4
<PAGE>
EXHIBIT 10.1
April 14, 1998
DATA RACE, Inc.
12400 Network Boulevard
San Antonio, Texas 78249-3341
Attention: Gregory T. Skalla
Re: Series C Convertible Participating Preferred Stock and Warrants
Dear Mr. Skalla:
We refer to the Securities Purchase Agreement, dated November 7, 1997, as
amended by the letter agreement (the "Letter Agreement") dated January 30, 1998,
(the "Purchase Agreement"), by and among DATA RACE, Inc. (the "Company") and the
buyers named therein (the "Buyers") relating to the sale by the Company of
shares of Series C Convertible Participating Preferred Stock (the "Preferred
Stock") and the related warrants (the "Warrants") of the Company to the Buyers.
Pursuant to the terms of the Purchase Agreement, on November 12, 1997 the
Company sold 5,000 shares of Preferred Stock and 139,861 Warrants to the Buyers.
Subject to the terms and conditions set forth in the Purchase Agreement, the
Company will sell an aggregate of an additional 3,000 shares of Preferred Stock
(the "Additional Preferred Shares") and the related Warrants to the Buyers.
The Company and the Buyers have agreed to the following change to the
Purchase Agreement, including the Letter Agreement:
Section 1(c) of the Purchase Agreement is amended to define the
"Additional Closing Date" as "June 1, 1998 (or such later date as is
mutually agreed to by the Company and the Buyers)" rather than the
Additional Closing Date currently set forth in Section 1(c) of the
Purchase Agreement. Each of the Buyers acknowledges it has received
the Additional Share Notice.
Except as modified herein, the Purchase Agreement, including the Letter
Agreement, remain in full force and effect in accordance with its terms.
Pursuant to Section 2(b)(ii) of the Statement of Designations, Preferences and
Rights of Series C Convertible Participating Preferred Stock of DATA RACE, Inc.
(the "Statement of Designations"), any Additional Preferred Shares issued on
June 1, 1998 will have an initial Fixed Conversion Price equal to 120% of the
Market Price (as defined in the Statement of Designations) of the Common Stock
on June 1, 1998.
The Company agrees that, on or before April 15, 1998, the Company shall
publicly disclose the terms of this letter agreement.
<PAGE>
This letter agreement is effective April 14, 1998 and shall be binding upon
the parties and their successors and assigns and may be amended or terminated
only by a writing signed by all the parties hereto.
Please indicate your agreement to the above by signing in the space
provided below and faxing a signed copy to each of the Buyers listed below.
BUYERS:
NELSON PARTNERS
By: /s/ ANNE DUPUY
-------------------------------------
Name: Anne Dupuy
Title: Officer
OLYMPUS SECURITIES, LTD.
By: /s/ ANNE DUPUY
-------------------------------------
Name: Anne Dupuy
Its: Director
CC INVESTMENTS, LDC
By: /s/ JOHN D. ZIEGELMAN
-------------------------------------
Name: John D. Ziegelman
Title: Director
CAPITAL VENTURES INTERNATIONAL
By: Heights Capital Management
Its: Authorized Agent
By: /s/ MICHAEL SPOLAN
-------------------------------------
Name: Michael Spolan
Its: Secretary and General Counsel
Accepted and agreed to this
14th day of April, 1998:
DATA RACE, INC.
By: /s/ GREGORY T. SKALLA
-------------------------------------
Gregory T. Skalla
Vice President and Chief Financial Officer
