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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) DECEMBER 16, 1996
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MICROELECTRONIC PACKAGING, INC.
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(Exact name of registrant as specified in charter)
CALIFORNIA 0-23562 94-3142624
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9350 TRADE PLACE, SAN DIEGO, CALIFORNIA 92126
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 530-1660
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N/A
---
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
As reported on a current report on Form 8-K filed with the Securities
and Exchange Commission on October 28, 1996, on October 24, 1996,
Microelectronic Packaging, Inc. ("MPI" or the "Company") entered into
subscription agreements ("Subscription Agreements") with Dusseldorf Securities
Limited ("Dusseldorf") and various other offshore investors (collectively, the
"Purchasers"), the form of which is on file with the Securities and Exchange
Commission and is incorporated herein by reference. Pursuant to the terms of the
Subscription Agreements, MPI issued a series of convertible debentures (the
"Debentures") to the Purchasers at an aggregate purchase price of U.S. $2.8
million, which Debentures have terms of one year and bear interest at the rate
of 8.0% per annum. This offering was not registered under the Securities Act of
1933, as amended, pursuant to the exemption provided by Regulation S promulgated
thereunder. The outstanding principal under the Debentures will be due and
payable in full at the end of the one-year term; however, subject to certain
limitations as originally set forth in the Debentures and described below, on or
after December 7, 1996, the outstanding principal under the Debentures may be
converted at each Purchaser's option into shares of the Company's Common Stock.
The number of shares of the Company's Common Stock issuable to the Purchasers
upon such conversion will be the amount of principal outstanding divided by the
lesser of 80% of the average of the closing bid price of the Company's Common
Stock as reported by Nasdaq National Market for the three consecutive trading
days immediately preceding the date of conversion or 110% of the closing bid
price of the Company's Common Stock as reported by Nasdaq National Market on
October 23, 1996. MPI also issued a warrant (the "Warrant") to Dusseldorf to
purchase 75,421 shares of the Company's Common Stock. The exercise price of the
Warrant is the lesser of the average price at which the Debentures are converted
into the Company's Common Stock, or 110% of the closing bid price of the
Company's Common Stock as reported by Nasdaq National Market on October 23,
1996. The Warrant is exercisable on or after December 7, 1996 and remains
exercisable until October 23, 1997. The Debentures, as originally issued on
October 23, 1996, could not be converted into shares of Common Stock if such
conversion would result in the issuance by the Company of more than 19.9% of the
Company's outstanding Common Stock as of October 23, 1996, including shares
issuable upon exercise of the Warrant (whether such Warrant has been exercised
or not)(the "19.9% Limit"). The Company was required to redeem all outstanding
principal amounts under the Debentures that could not be converted (because such
conversion would exceed the 19.9% Limit) at 120% of such outstanding principal
amount (the "Premium"). Under current Securities and Exchange Commission
regulations, such shares of the Company's Common Stock may be offered and sold
in the United States trading markets at the earliest 40 days after the issuance
of the Debentures and the Warrant.
On December 3, 1996, the Company obtained approval from the Nasdaq
Stock Market, Inc. for an exemption from the shareholder approval provisions of
Rule 4460(i) of the Rules of The Nasdaq Stock Market, which exemption allowed
the Company to eliminate the 19.9% Limit without shareholder approval. On
December 16, 1996, the Purchasers agreed to amend the Debentures to eliminate
the 19.9% Limit and to eliminate the Company's obligation to pay the Premium.
The form of the amendment is attached hereto as Exhibit 10.84 and is
incorporated herein by this reference.
On December 13, 1996, certain of the Purchasers notified the Company
that they intended to convert Debentures totalling six hundred thousand dollars
($600,000.00) into shares of the Company's Common Stock. The conversion price
of these Debentures was seventy-two cents ($0.72)(eighty percent (80%) of the
average bid price of the Company's Common Stock on the three days preceeding
December 13, 1996). Upon conversion, these Purchasers were issued eight hundred
and thirty-three thousand three hundred and thirty-four (833,334) shares of the
Company's Common Stock.
On December 23, 1996, certain of the Purchasers again notified the
Company that they intended to convert Debentures totalling three hundred
thousand dollars ($300,000.00) into shares of the Company's Common Stock. The
conversion price of these Debentures was $0.63336 (eighty percent (80%) of the
average bid price of the Company's Common Stock on the three days preceeding
December 23, 1996). These Purchasers were issued four hundred and seventy-three
thousand six hundred and sixty-four (473,664) shares of the Company's Common
Stock.
On January 3, 1997 and January 8, 1997, certain of the Purchasers again
notified the Company that they intended to convert Debentures totalling one
hundred and fifty thousand dollars ($150,000.00) into shares of the Company's
Common Stock. The conversion price for these Debentures was seventy-six cents
($0.76) (eighty percent (80%) of the average bid price of the Company's Common
Stock on the three days preceeding January 3, 1997, which is the same as eighty
percent (80%) of the average bid price of the Company's Common Stock on the
three days preceeding January 8, 1997). These Purchasers were issued one hundred
and ninety-seven thousand three hundred and sixty-eight (197,368) shares of the
Company's' Common Stock.
Were the Purchasers to convert the remaining one million seven
hundred and fifty thousand dollars ($1,750,000.00) of Debentures outstanding at
a conversion price of $0.63336 (which is the lowest conversion price to date),
such Purchasers they would be entitled to an additional two million seven
hundred and sixty-three thousand and forty-one (2,763,041) shares.
The existence and conversion of the Debentures and the existence and
exercise of the Warrant into shares of the Company's Common Stock without the
19.9% Limit will significantly dilute any earnings per share amounts and
significantly dilute the ownership interests of MPI's other shareholders.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired. None.
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(b) Pro Forma Financial Information. None.
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(c) Exhibits. The following document is filed as an exhibit to the report:
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2.
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Exhibit No. Description
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10.84 Form of Amendment to 8% Convertible debenture.
3.
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SIGNATURES
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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.
Microelectronic Packaging, Inc.
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(Registrant)
Date: January 15, 1997 By /s/ Denis Trafecanty
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Name: Denis Trafecanty
Title: Chief Financial Officer and
Secretary
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Microelectronic Packaging, Inc.
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Exhibit Index
to Form 8-K
Sequentially
Numbered
Exhibit No. Description Page
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10.84 Form of Amendment to 8% Convertible Debenture.
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EXHIBIT 10.84
MICROELECTRONIC PACKAGING, INC.
Amendment to Convertible Debentures ____ through ____
This Amendment to Convertible Debentures ____ through ____ (the
"Original Debentures") is dated as of this 16th day of December, 1996, by and
between Microelectronic Packaging, Inc. (the "Corporation") and
_________________ (the "Holder").
WHEREAS, on October 23, 1996, the Corporation issued to Holder the
Original Debentures, which Original Debentures have an aggregate value of
$_________________;
WHEREAS, on October 23, 1996, the Corporation also issued Convertible
Debentures to other holders, which Convertible Debentures, including the
Original Debentures, have an aggregate value of $2,800,000.00.
WHEREAS, Section 2.2 of the Convertible Debentures provides that a
Debenture holder may not exercise the conversion rights provided in Section 2
thereof to the extent that the number of shares of Common Stock issuable to such
holder pursuant to such conversion and to any other holder simultaneously
converting a Debenture issued as part of the same series as that Debenture, plus
the number of shares of Common Stock previously issued to such holder and any
other holder of Debentures issued as part of the same series as that Debenture
pursuant to any previous conversion, plus the total number of shares of Common
Stock issuable pursuant to that certain Warrant issued by the Corporation to
Dusseldorf Securities Limited (whether or not such shares have been issued),
would equal or exceed 1,112,628 shares of the Corporation's Common Stock (the
"20% Limit");
WHEREAS, Section 2.2 also provides that in the event that the
Corporation is unable to redeem some portion of the principal due under that
Debenture (the "Outstanding Balance") because of the 20% Limit, the Corporation
shall, within 15 days of the date that it receives the Conversion Notice
(defined therein), redeem the Outstanding Balance by payment to the holder of
cash in an amount equal to 120% of the Outstanding Balance (the "Premium");
WHEREAS, on December 3, 1996, the Corporation obtained an exemption
from the shareholder approval provisions of Rule 4460(i) of the Rules of The
Nasdaq Stock Market (attached hereto as Exhibit 1), thereby allowing the holders
of the Convertible Debentures to convert all the Debentures even if such
conversion would exceed the 20% Limit as described in Section 2.2 thereof; and
WHEREAS, the Corporation and the Holder now deem it desirable and in
the best interests of the Corporation to enter into this Amendment in order to
amend
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the Original Debentures to remove the 20% Limit and the obligation to pay the
Premium;
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual premises and covenants contained in this Amendment, the parties hereto
agree as follows:
1. Section 2.2 of the Original Debentures is hereby amended by
deleting said Section 2.2 in its entirety and by inserting in lieu thereof the
following new Section 2.2:
"2.2 The holder of this Debenture may exercise the conversion right
provided in this Section 2 by giving written notice in the form attached
hereto (the "Conversion Notice") to the Corporation of the exercise of such
right, in whole or in part, and stating the name or names in which the
stock certificate or stock certificates for the shares of Common Stock are
to be issued and the address to which such certificates shall be delivered.
The Conversion Notice shall be accompanied by the Debenture. The number of
shares of Common Stock that shall be issuable upon conversion of the
Debenture shall equal the amount of the outstanding principal for which a
Conversion Notice is given, divided by a conversion price (the "Conversion
Price") equal to the lesser of (x) --- [110 % of the closing bid price of
the Common Stock on the closing date] or (y) 80% of the average closing bid
price of the Common Stock as reported by NASDAQ for the three (3)
consecutive trading days immediately preceding the Date of Conversion (as
defined below), subject to adjustment as provided in Section 4."
2. Except as expressly set forth herein, all of the terms and
provisions of the Original Debentures shall remain unmodified and in full force
and effect and the Original Debentures shall be read together and construed with
the applicable sections of this Amendment.
3. This Amendment may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
4. Capitalized terms used but not otherwise defined herein shall
have the meaning ascribed to them in the Original Debentures.
5. This Amendment shall be governed by and construed in accordance
with the laws of the State of California.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as
the day and year first written above.
MICROELECTRONIC PACKAGING, INC.
By: _____________________________
Denis Trafecanty
Chief Financial Officer
[NAME OF DEBENTURE HOLDER]
By: ______________________________
Print Name: ________________________
Title: ______________________________
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