SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
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PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): FEBRUARY 20, 1998
STARBASE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-25612 33-0567363
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
18872 MACARTHUR BOULEVARD
IRVINE, CALIFORNIA 92612
(Address of Principal Executive Offices) (Zip Code)
(714) 442-4400
(Registrant's telephone number, including area code)
This Current Report on Form 8-K is filed by StarBase Corporation, a
Delaware corporation (the "Company"), in connection with the matters described
herein.
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ITEM 5. OTHER EVENTS
On February 20, 1998, the Company completed a private placement
offering of 2,759,109 units of equity securities of the Company (the "Series E
Units"). Each Series E Unit consists of one share of the Company's Series E
Preferred Stock, par value $0.01 per share (the "Series E Preferred Stock"),
with each share of Series E Preferred Stock convertible into one share of Common
Stock, and one non-transferable warrant to purchase a 0.5 share of Common Stock,
exercisable at $1.80 per share through the first anniversary of the issuance
date of the warrants and thereafter at $2.00 through the second anniversary of
the issuance date of the warrants. Each Series E Unit was offered at a
subscription price of $1.25 per unit.
The proceeds of the Series E private placement will be used for general
corporate purposes, including the launch of the Company's new product, StarTeam
3.0.
The Series E Units were offered to the subscribers in compliance
with Section 4(2) of the Securities Act of 1933, as amended (the "Act"), who are
"accredited investors" (as such term is defined in Regulation D of the Act). The
shares of Common Stock and warrants sold have not been registered under the Act
and may not be offered or sold in the United States absent registration or an
exemption from the registration requirements of the Act.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
Pro Forma Balance Sheet (utilizing January 31, 1998 numbers) Page 4
Statement of Operations (utilizing January 31, 1998 numbers) Page 5
(c) EXHIBITS.
4.1 Form of Securities Purchase Agreement (Series E units)
4.2 Certificate of Amendment of Certificate of Designation
(Series E Preferred Stock) of StarBase Corporation, dated
February 17, 1998
4.3 Form of Registration Rights Agreement (Series E Units)
4.4 Form of Warrant (Series E Units)
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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 thereunto duly authorized.
STARBASE CORPORATION
(Registrant)
FEBRUARY 26, 1998 By: /S/ DONALD R. FARROW
- ------------------ -----------------------
Date Donald R. Farrow
President and
Chief Operating Officer
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STARBASE CORPORATION
(a development stage company)
BALANCE SHEETS
(in thousands, except number of shares and par values)
<TABLE>
<CAPTION>
January 31,
1998 Financing (a) Pro Forma
--------------- ---------------- --------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,687 $ 2,677 $ 4,364
Accounts receivable, net of allowances of $65 295 - 295
Notes and other receivables 128 - 128
Prepaid expenses and deferred charges 224 - 224
Inventories 20 - 20
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Total current assets 2,354 2,677 5,031
Property and equipment, net 698 - 698
Note receivable from officer 76 - 76
Other non-current assets 48 - 48
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Total assets $ 3,176 $ 2,677 $ 5,853
=============== ================ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 1,006 $ - $ 1,006
Current portion of capital lease obligation 9 - 9
--------------- ---------------- --------------
Total current liabilities 1,015 - 1,015
Long-term debt:
Capitalized lease obligation, less current 40 - 40
portion
Total liabilities 1,055 - 1,055
Shareholders' equity:
Preferred Stock, $.01 par value; authorized
10,000,000; issued and outstanding
1,326,324 (January 31, 1998) 13 24 37
Common stock, $.01 par value; authorized
50,000,000; issued and outstanding
17,758,431 (January 31, 1998) 178 - 178
Additional paid-in capital 31,658 2,653 34,311
Deficit accumulated during development stage (29,728) - (29,728)
--------------- ---------------- --------------
Total shareholders' equity 2,121 2,677 4,798
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Total liabilities and shareholders' equity $ 3,176 $ 2,677 $ 5,853
=============== ================ ==============
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<FN>
(a) To reflect the issuance of 2,417,500 shares of the Company's preferred
stock at $1.25 per share, including warrants to purchase 0.5 shares of the
Company's common stock at $1.80 per share through the first anniversary
date of the issuance of the warrants, net of estimated financing costs.
</FN>
</TABLE>
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STARBASE CORPORATION
(a development stage company)
STATEMENT OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
The month Ten months
ended ended
January 31, January 31,
1998 1998
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<S> <C> <C>
Revenues:
Products 123 1,170
License and royalty 23 337
Other - -
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Total revenues 146 1,507
Cost of Sales:
Consulting services - -
Consulting services-related party - -
Products, licenses and other 3 71
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Total cost of sales 3 71
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Gross margin 143 1,436
Operating Expenses:
Research and development 253 2,034
Selling, general and administrative 445 4,280
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Total operating expenses 698 6,314
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Operating loss (555) (4,878)
Interest income 5 79
Interest expense (3) (942)
Other income and expense - (39)
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Total interest and other income and expense 2 (902)
Loss before income taxes (553) (5,780)
Provision for income taxes 0 1
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Net loss $ (553) $ (5,781)
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</TABLE>
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EXHIBIT INDEX
Exhibit
NO. PAGE
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4.1 Form of Securities Purchase Agreement (Series E units) (A)
4.2 Certificate of Amendment of Certificate of Designation
(Series E Preferred Stock) of StarBase Corporation, dated
February 17, 1998 7
4.3 Form of Registration Rights Agreement (Series E Units) (A)
4.4 Form of Warrant (Series E Units) (A)
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(A) Incorporated herein by reference to the Company's Registration Statement
on Form 8-K, (file number 0-25612) filed with the Commission on
February 25, 1998.
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EXHIBIT 4.2
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF DESIGNATION
(SERIES E PREFERRED STOCK)
OF
STARBASE CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
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It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
StarBase Corporation.
2. The Certificate of Designation (Series E Preferred Stock) of the
Corporation was filed with the Secretary of State of Delaware on January 8,
1998.
3. The Certificate of Designation (Series E Preferred Stock) of the
Corporation is hereby amended by deleting the resolution adopted by the Board of
Directors of the Corporation and Paragraph 1 thereof and by substituting in lieu
thereof the following (i) new resolution adopted by the Board of Directors of
the Corporation to increase the number of shares of Series E Preferred Stock
from "1,600,000" to "3,000,000" and (ii) new Paragraph 1:
A. "RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of 310600-1s of the Corporation (the "Board" February
26,1998 ) by the provisions of the Restated Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation"), there hereby is created, out
of the 10,000,000 shares of Preferred Stock, par value $0.01 per share, of the
Corporation authorized in Article 4 of the Certificate of Incorporation (the
"Preferred Stock"), a series of the Preferred Stock of the Corporation
consisting of 3,000,000 shares, which series shall have the following powers,
designations, preferences and relative, participating, optional and other
rights, and the following qualifications, limitations and restrictions:"
B. "1. DESIGNATION AND AMOUNT. This series of Preferred Stock shall be
designated "Series E Preferred Stock" and the authorized number of shares
constituting such series shall be 3,000,000. The par value of the Series E
Preferred Stock shall be $0.01 per share."
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4. The amendment to the Certificate of Designation (Series E Preferred
Stock) herein certified has been duly adopted in accordance with the provisions
of Section 151(g) of the General Corporation Law of the State of Delaware.
Signed on February 17, 1998
StarBase Corporation
By:/S/ WILLIAM R. STOW, III
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William R. Stow, III
[Chief Executive Officer]
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