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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): January 21, 1997
STRUTHERS INDUSTRIES, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-2707 730746455
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(State or other jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1875 Century Park East, Suite 200, Century City, CA 90067
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 557-1875
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On January 28, 1997, the Board of Directors accepted the resignation of
Jarius De Walt from the Board of Directors and Sean P. O'Keefe resigned as
President and as a Director. The Board of Directors appointed C. P. Shankar to
fill one of the vacancies resulting from the departure of Messrs. De Walt and
O'Keefe. The Board is thus presently made up of six (6) individuals, namely C.
P. Shankar, Richard Wade, Rauol L. Carroll, Ted Tarr, Robert Wainwright, and
Dale Smith. The Board also appointed C. P. Shankar as President and Chief
Executive Officer of the Company and Richard Wade was appointed Secretary and
Vice-President of the Company. However, Mr. Shankar shall not assume his duties
as President and Chief Executive Officer of the Company until March 1, 1997.
During this interim time period, Mr. Richard Wade shall be acting President and
Chief Executive Officer of the Company. The Board also established an
Executive Committee of three (3) directors, namely C. P. Shankar, Rauol L.
Carroll and Richard Wade.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
On January 21, 1997, Struthers Industries, Inc. (the "Company") issued
and sold $6,770,000 of its 3% Convertible Debentures due January 1, 2000 (the
"Debentures"), to "accredited investors", as that term is defined in Rule 501(a)
under the Securities Act of 1933, as amended (the "Act"), in a transaction
exempt from registration pursuant to Regulation S promulgated under the Act.
Pursuant to the terms of the sbscription for the Debentures, a 25% discount
from the face amount of the Debenture is granted subscribers resulting in
actual subscription proceeds of $5,044,445. The conversion rights and other
terms of the Debentures are set forth below under the caption "Description of
3% Convertible Debentures."
A fee of $406,200 will be paid by the Company to J. P. Carey
Enterprises, Inc. for providing investment banking and consulting services in
connection with the sale of the Debentures.
DESCRIPTION OF 3% CONVERTIBLE DEBENTURES.
The following description is a summary of the rights and limitations of
the Debentures:
1. Debentures. The Debentures are issuable in denominations of at least Ten
Thousand Dollars ($10,000, U.S.). The Debentures are exchangeable for an equal
aggregate principal amount of Debentures of different authorized denominations,
as requested by the holders surrendering the same, but shall not be issuable in
denominations less than integral multiples of Ten Thousand Dollars ($10,000,
U.S.). No service charge will be made for such registration of transfer or
exchange.
2. Withholding. The Company shall be entitled to withhold from all payments of
principal of, and interest on, the Debentures any amounts required to be
withheld under the applicable
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provisions of the United States income tax laws or other applicable laws at the
time of such payments. The holder shall pay any other taxes, charges, or levies
in connection with the issuance or transfer thereof.
3. Transfer. The Debentures have been issued subject to investment
representations of the original purchaser and may be transferred or exchanged
only in compliance with the Securities Act of 1933, as amended (the "Act"),
including Regulation S promulgated under the Act. Prior to due presentment to
the Company for transfer of the Debentures, the Company and any agent of the
Company may treat the person in whose name the Debenture is duly registered on
the Company's Debenture Register as the owner thereof for the purpose of
receiving payment as provided in the Debenture and for all other purposes,
whether or not the Debenture be overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.
4. Conversion. The record holders of the Debentures shall have conversion rights
as follows (the "Conversion Rights"):
(a) Right to Convert. The record holder of a Debenture shall be
entitled, at the option of the holder, to convert any or all of the aggregate
principal amount of Debentures held by such holder, at any time beginning
forty-five (45) days after the date of issuance of the Debenture, at the office
of the Company or any transfer agent for the Debentures, into that number of
fully-paid and non-assessable shares of common stock of the Company ("Common
Stock") calculated in accordance with the following formula:
Number of shares to be issued upon conversion = (Principal + Interest) x
Conversion Price, where
o Principal = The principal amount of the Debenture(s) to be converted,
o Interest = Principal x (N/365) x .03, where N = the number of days between
(i) the date of issuance of this Debenture, and (ii) the date of conversion of
this Debenture, and
o Conversion Price = the lesser of (x) the average Closing Bid Price, as that
term is defined below, of the Company's Common Stock for the five (5) trading
days immediately preceding the date of issuance of the Debenture, or (y) the
average Closing Bid Price, as that term is defined below, of the Company's
Common Stock for the five (5) trading days immediately preceding the Date of
Conversion, as defined below. The term "Closing Bid Price" shall mean the
closing bid price of the Company's Common Stock as reported by NASDAQ (or, if
not reported by NASDAQ, as reported by such other exchange or market where
traded).
(b) Automatic Conversion on Maturity Date. Each outstanding Debenture
shall automatically be converted into Common Stock on January 1, 2000 at the
Conversion Price for each share of Common Stock calculated in accordance with
the formula in Section 4(a) above, and January 1, 2000 shall be deemed the Date
of Conversion with respect to such conversion.
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(c) Adjustment to Conversion Price.
(i) If, prior to the conversion of all of the Debentures, the
number of outstanding shares of Common Stock is increased by a stock split,
stock dividend, or other similar event, the Fixed Conversion Price shall be
proportionately reduced, or if the number of outstanding shares of Common Stock
is decreased by a combination or reclassification of shares, or other similar
event, the Fixed Conversion Price shall be proportionately increased.
(ii) If, prior to the conversion of all of the Debentures at a
time when conversion would be at the Floating Conversion Price, there is a stock
split, stock dividend or other similar event which occurs during the five-day
period utilized to compute the Conversion Price, then the Closing Bid Price used
to compute the Conversion Price shall be appropriately adjusted to reflect, as
deemed equitable and appropriate by the Company, such stock split, stock
dividend or other similar event.
(iii) If, prior to the conversion of all Debentures, there
shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common
Stock of the Company shall be changed into the same or a different number of
shares of the same or another class or classes of stock or securities of the
Company or another entity, then the holders of Debentures shall thereafter have
the right to purchase and receive upon conversion of Debentures, upon the basis
and upon the terms and conditions specified herein and in lieu of the shares of
Common Stock immediately theretofore issuable upon conversion, such shares of
stock and/or securities as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
purchasable and receivable upon the conversion of Debentures held by such
holders had such merger, consolidation, exchange of shares, recapitalization or
reorganization not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the holders of the
Debentures to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Fixed Conversion Price and of the number of
shares issuable upon conversion of the Debentures) shall thereafter be
applicable, as nearly as may be practicable in relation to any shares of stock
or securities thereafter deliverable upon the exercise hereof. The Company shall
not effect any transaction described hereunder unless the resulting successor or
acquiring entity (if not the Company) assumes by written instrument the
obligation to deliver to the holders of the Debentures such shares of stock
and/or securities as, in accordance with the foregoing provisions, the holders
of the Debentures may be entitled to purchase.
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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 hereunto duly authorized.
STRUTHERS INDUSTRIES, INC.
By: /s/ Richard Wade
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Richard Wade, Vice President and
Acting Chief Executive Officer and President
Dated: February 5, 1997
35833
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