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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)
August 17, 2000
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CHROMATICS COLOR SCIENCES INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in its Charter)
New York
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(State or Other Jurisdiction of Incorporation)
0-21168 13-3253392
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(Commission File Number) (IRS Employer Identification Number)
5 East 80th Street, New York, New York 10021
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 717-6544
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Page 1 of 5 pages
Exhibit Index located on page 5
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ITEM 5. OTHER EVENTS.
On August 17, 2000, the Company closed the first installment of a
$4,000,000 private placement transaction with an accredited investor. On that
date, the Company issued 641,026 shares of common stock and warrants to purchase
additional shares to the investors for $3,000,000. The Company has agreed to
file a registration statement on Form S-3 with the Securities and Exchange
Commission to register the resale of the shares of common stock issued or
issuable as a result of the transaction (the "Registration Statement"). Upon
effectiveness of the Registration Statement within ninety days after the first
closing, a second closing will occur, and the investor will pay an additional
$1,000,000 and receive 213,675 additional shares of common stock. An additional
warrant which will entitle the investor to acquire 50,000 additional shares of
common stock will be issued to the investor at the second closing. The second
closing will occur within five trading days following the date that the
Registration Statement is declared effective unless the closing sales price of
the common stock for any of the three trading days following the effective date
is less than $4.01 per share.
At the first closing, the Company issued to the investor warrants to purchase an
aggregate of 150,000 shares of the Company's common stock at an exercise price
of $5.26 per share (subject to certain adjustments) for a five year period (the
"Closing Warrant") and warrants to purchase a currently indeterminate number of
shares as described below (the "Adjustable Warrant"). As compensation for
services rendered in connection with this private placement, an additional
warrant to purchase 30,000 shares of common stock was issued to the Company's
financial advisor on the same terms and conditions as the Closing Warrant.
The purpose of the Adjustable Warrant is to provide a mechanism for resetting
the price of the shares of common stock purchased by the investor in the
transaction if the market price of the Company's common stock does not achieve
and maintain a specific level. The Adjustable Warrant is exercisable after
each of three vesting dates. The first vesting date will occur on the 40th
trading day after the date that the Registration Statement becomes effective,
but in no event earlier than December 11, 2000, subject to the purchaser's
option to extend the date until the 40th trading day after January 2, 2001. The
second vesting date will occur on the 40th trading day after the first vesting
date, and the third vesting date will occur on the 40th trading day after the
second vesting date. The Adjustable Warrant expires on the second anniversary of
the third vesting date.
On each vesting date, the Company and the investor will determine, based on a
formula contained in the Adjustable Warrant, whether the warrant has become
exercisable for any warrant shares. Under the formula, the number of shares
issuable would depend on the average of the lowest ten closing bid prices of the
Company's common stock during the forty consecutive trading days preceding each
vesting date. If the average closing bid price of the Company's common stock
exceeds $5.85 per share for twenty consecutive trading days after the
Registration Statement is effective, then no further vesting will occur and no
more shares will become issuable.
Page 2 of 5 pages
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
4.1 Securities Purchase Agreement, dated as of August 16, 2000, between
Chromatics Color Sciences International, Inc. (the "Company") and
Millennium Partners, L.P. (the "Purchaser")
4.2 Warrant, dated as of August 16, 2000, made by the Company in favor
of the Purchaser
4.3 Warrant No. C W 1, dated as of August 16, 2000, made by the Company
in favor of the Purchaser
4.4 Registration Rights Agreement, dated as of August 16, 2000,
between the Company and the Purchaser
99.1 Chromatics Color Sciences International, Inc. press release, dated
August 18, 2000
Page 3 of 5 pages
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CHROMATICS COLOR SCIENCES
INTERNATIONAL, INC.
By: /s/ Darby S. Macfarlane
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Name: Darby S. Macfarlane
Title: Chairperson
Date: September 1, 2000
Page 4 of 5 pages
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EXHIBIT INDEX
4.1 Securities Purchase Agreement, dated as of August 16, 2000, between
Chromatics Color Sciences International, Inc. (the "Company") and
Millennium Partners, L.P. (the "Purchaser")
4.2 Warrant, dated as of August 16, 2000, made by the Company in favor
of the Purchaser
4.3 Warrant No. C W 1, dated as of August 16, 2000, made by the Company
in favor of the Purchaser
4.4 Registration Rights Agreement, dated as of August 16, 2000,
between the Company and the Purchaser
99.1 Chromatics Color Sciences International, Inc. press release, dated
August 18, 2000.
Page 5 of 5 pages
