File No. 333-47595
Rule 424(b)(3)
THE PANDA PROJECT, INC.
Supplement to Prospectus
November 17, 1998
The Prospectus of The Panda Project, Inc. (the "Company") dated
July 16, 1998 relating to 2,150,000 shares of Common Stock of the
Company is hereby amended as follows:
The section entitled "Selling Securityholders" is deleted in its
entirety and the following is inserted in lieu thereof:
SELLING SECURITYHOLDERS
All of the shares of Common Stock of the Company offered hereby
are being sold by the Selling Securityholders named below. The
Company will receive none of the proceeds from the sale of shares
offered hereby. To the best knowledge of the Company, none of the
Selling Securityholders has held any office or maintained any material
relationship with the Company or its predecessors or affiliates over
the past three years.
The following table sets forth information concerning the
beneficial ownership, to the best knowledge of the Company, of shares
of Common Stock by the Selling Securityholders as of October 30, 1998,
the number of such shares included for sale in this Prospectus,
assuming the sale of all Shares being offered by this Prospectus, and
the number of shares of Common Stock to be held by the Selling
Securityholders after giving effect to this offering. The shares
offered hereby consist of (i) an estimated number of shares not to
exceed 293,328 shares issuable upon conversion of shares of Series A
Preferred sold in a private placement completed on February 11, 1998
(this number excludes an aggregate of 1,999,776 shares that had been
sold pursuant to the Prospectus prior to October 30, 1998), and (ii)
150,000 shares issuable upon the exercise of Common Stock Purchase
Warrants (the "Warrants") granted by the Company in connection with
such private placement. The Warrants are exercisable during the
period beginning February 11, 1998 and ending February 11, 2003 at an
exercise price of $6.10 per share.
Shares Shares
Owned as Shares Owned
as Of Offered After
Selling Securityholders (1) October 30, 1998 Hereby Offering
- --------------------------- ---------------- ------- --------
AGR Halifax
Fund, Ltd. (2)(3)(4)(6) 694,215 234,092 460,123
Leonardo, L.P. (2)(3)(5)(6) 403,139 96,391 306,748
GAM Arbitrage Investments,
Inc. (2)(3)(5)(6) 10,328 10,328 --
AG Super Fund International
Partners, L.P. (2)(3)(5)(6) 10,328 10,328 --
Raphael, L.P. (2)(3)(5)(6) 82,005 20,655 61,350
Ramius Fund, Ltd. (2)(3)(4)(6) 126,450 34,425 92,025
Pine Street Asset
Management, L.P. (2)(3)(6) 6,885 6,885 --
Samuel R. Shipley (2)(7) 24,500 7,500 17,000
Kevin J. Raidy (2)(7) 41,500 7,500 34,000
Bradley J. Ackerman (2)(7) 56,000 15,000 41,000
(1) The persons named in this table have sole voting and investment
power with respect to all shares of Common Stock shown as beneficially
owned by them, except as indicated in the other footnotes to this
table. Beneficial ownership is determined in accordance with the
rules of the United States Securities and Exchange Commission.
Assuming the sale of shares offered hereby, AGR Halifax Fund, Ltd. and
Leonardo, L.P. will own 2.8% and 1.9%, respectively, of the Company's
Common Stock. All other Selling Securityholders will own less than 1%
of the Company's Common Stock.
(2) The number of shares set forth in the table represents an estimate
of the number of shares of Common Stock to be offered by the Selling
Securityholders. The actual number of shares of Common Stock issuable
upon conversion of Series A Preferred is indeterminate, is subject to
adjustment and could be materially less or more than such estimated
number depending on factors which cannot be predicted by the Company
at this time, including, among other factors, the future market price
of the Common Stock. To the extent the average closing bid price of
the Company's Common Stock for the five days preceding conversion of
Series A Preferred exceeds $2.73 per share, the number of shares of
Common Stock offered hereby will be less than the amount shown. The
closing bid price for the Company's Common Stock on October 30, 1998
was $.84 per share. The actual number of shares of Common Stock
offered hereby and included in the Registration Statement, includes
such additional number of shares of Common Stock as may be issued or
issuable upon conversion of the Series A Preferred or upon exercise of
the Warrants by reason of, in the case of the Series A Preferred, the
floating conversion price mechanisms applicable to the Series A
Preferred, or, in the case of Series A Preferred and the Warrants, by
reason of any stock split, stock dividend or similar transaction
involving the Common Stock, in order to prevent dilution, in
accordance with Rule 416 under the Securities Act.
(3) The number of shares offered includes the following number of
shares of Common Stock issuable upon exercise of Warrants: AGR Halifax
Fund, Ltd., 68,000 shares; Leonardo, L.P., 28,000 shares; GAM
Arbitrage Investments, Inc., 3,000 shares; AG Super Fund International
Partners, L.P., 3,000 shares; Raphael, L.P., 6,000 shares; Ramius
Fund, Ltd., 10,000 shares; and Pine Street Asset Management, L.P.,
2,000 shares. The number of shares offered excludes 1,999,776 shares
of Common Stock previously issued upon conversion of Series A
Preferred and sold by the Selling Securityholders pursuant to the
Prospectus.
(4) AG Ramius Partners, LLC ("AG Ramius"), a registered investment
advisor, acts pursuant to contract as discretionary investment advisor
for AGR Halifax Fund, Ltd. and Ramius Fund, Ltd., holding voting and
dispositive powers with respect to securities acquired for their
accounts. In such capacity, AG Ramius may be considered a beneficial
owner of shares of Common Stock that such Selling Securityholders own
or have the right to acquire.
(5) Angelo, Gordon & Co., LP ("Angelo Gordon"), a registered
investment advisor that is one of the members of AG Ramius, or its
affiliates, manages the accounts of Leonardo, L.P., GAM Arbitrage
Investments, Inc., Raphael, L.P. and AG Super Fund, Ltd. on a
discretionary basis. In such capacity, Angelo Gordon may be
considered a beneficial owner of shares of Common Stock that such
Selling Securityholders own or have the right to acquire.
(6) To comply with applicable rules of The Nasdaq Stock Market, the
Company's Articles of Incorporation provide that the aggregate number
of shares issuable upon conversion of Series A Preferred and exercise
of the Warrants may not exceed 19.99% of the Company's outstanding
shares of capital stock immediately prior to closing of the private
placement of Series A Preferred (2,443,104 shares), without
shareholder approval. In the absence of this provision, the Selling
Securityholders would beneficially own the following number of shares
based on the closing bid price of the Company's Common Stock on
October 30, 1998 ($.84): AGR Halifax Fund, Ltd., 3,806,337 shares;
Leonardo, L.P., 1,821,617 shares; GAM Arbitrage Investments, Inc.,
134,905 shares; AG Super Fund International Partners, L.P., 131,333
shares; Raphael, L.P., 267,457 shares; Ramius Fund, Ltd., 102,025
shares; and Pine Street Asset Management, L.P., 91,082 shares. The
terms of the Series A Preferred also provide that shares of Series A
Preferred are convertible by any holder only to the extent the number
of shares of Common Stock owned by such holder and its affiliates
would not exceed 4.9% of the then outstanding Common Stock of the
Company.
(7) Shares offered consist of shares of Common Stock issuable upon
exercise of Warrants. Shares owned does not include an aggregate of
43,252 shares of Common Stock owned by Shipley Raidy Capital Partners,
LP, which such persons may be deemed to own beneficially by virtue of
their positions with Shipley Raidy Capital Partners, LP.
