SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): May 28, 1998
SOFTNET SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation)
1-5270 11-1817252
(Commission File Number) (I.R.S. Employer Identification Number)
520 Logue Ave., Mountain View, CA 94043
(Address of principal executive offices) (Zip Code)
(650) 965-3700
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
On May 28, 1998, the Registrant issued 10,000 shares of Series B Convertible
Preferred Stock ("Preferred Stock") and warrants ("Warrants") to purchase
200,000 shares of Common Stock through a combined $10,000,000 private equity
placement. For the next nine months, the Preferred Stock is convertible into the
Company's Common Stock at $13.20 per share. Thereafter, the conversion price of
the Preferred Stock may vary based upon the trading price of the Company's
Common Stock during the period preceding conversion. The Warrants are
exercisable at $13.75 per share, and expire on May 28, 2002. Any Preferred Stock
outstanding on May 28, 2001 will either be redeemed at face value or converted
into the Company's Common Stock, at the sole option of the Company.
The Preferred Stock is entitled to dividends, at the rate of 5% per annum,
payable in cash or, at the Company's election, in additional shares of Preferred
Stock. In certain circumstances, including failure to list the Common Stock
underlying the Preferred Stock and Warrants on the American Stock Exchange or
failure to register such Common Stock for resale under the Securities Act of
1933, as amended, the Preferred Stock is subject to mandatory redemption at 120%
of its stated value of $1,000 per share and the Company is subject to certain
penalties. At the Company's option, the Preferred Stock may be redeemed after
November 28, 1999 at 120% of its stated value. The associated Warrants contain
certain call and anti-dilution provisions and permit cashless exercise.
The financing was arranged by Shoreline Pacific Institutional Finance, the
Institutional Division of Financial West Group ("Shoreline"). Shoreline received
a fee of $500,000 plus warrants, exercisable at $11.00 per share and expiring on
May 28, 2002, to purchase 50,000 shares of the Company's Common Stock.
Also on May 28, 1998, the Registrant disclosed its intent to raise up to
approximately $150 million through the issuance and private placement under Rule
144A of units (expected to consist of both Notes and Warrants) to qualified
institutional buyers.
The Registrant issued two separate press release on these matters, attached
hereto as Exhibits 99.1 and 99.2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description of Document
----------- ---------------------------------------------
99.1 Press release dated May 28, 1998 issued by
the Registrant announcing $10 million private
equity placement.
99.2 Press release dated May 28, 1998 issued by
the Registrant announcing intention to seek
up to $150 million private placement of
securities.
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.
SOFTNET SYSTEMS, INC.
/s/ Lawrence B. Brilliant
-----------------------------
Lawrence B. Brilliant
C.E.O.
/s/ Garrett J. Girvan
-----------------------------
Garrett J. Girvan
C.F.O. and C.O.O.
Dated: June 1, 1998
SoftNet Systems Announces $10 Million Private Equity Placement
MOUNTAIN VIEW, CA (May 28, 1998) -- SoftNet Systems, Inc. (AMEX:SOF), announced
that it received an investment of $10 million through a private equity placement
on May 28, 1998. The placement consists of 10,000 shares of Series B Convertible
Preferred Stock, together with warrants to purchase 200,000 shares of the
Company's Common Stock at $13.75 per share, for combined proceeds of $10 million
in cash. The conversion price of the Preferred Stock will be $13.20 per share
for the next nine months and may vary thereafter based on the trading price for
the Company's Common Stock during the period preceding conversion. The financing
was arranged by Shoreline Pacific Institutional Finance, the Institutional
Division of Financial West Group of Sausalito, California.
The proceeds from this offering will be used primarily to expand the Company's
Internet services business (the ISP Channel(SM)) and for general corporate
purposes.
SoftNet operates three divisions. SoftNet's Internet division provides
comprehensive business-to-business Internet services including Internet access
and web development along with the "ISP Channel(SM)" branded program for cable
operators. SoftNet's Document Management division develops, markets, installs
and services electronic information and document management systems that allow
customers to electronically request and receive information from multiple media.
The Company's Telecommunications division markets and installs telecom and
datacom solutions for middle-market companies.
SoftNet Systems Announces Intention to Seek Up to $150 Million Private Placement
of Securities
MOUNTAIN VIEW, CA (May 28, 1998) -- SoftNet Systems, Inc. (AMEX:SOF), announced
that, subject to market and other conditions, it plans to raise up to
approximately $150 million through the issuance and private placement under Rule
144A of units to QIB's (qualified institutional buyers). Each unit is expected
to consist of one Note and one Warrant to purchase shares of the Company's
Common Stock. The interest rate on the Notes and the number of shares covered by
each Warrant will not be determined until the offering is completed.
The Company expects the offering to close this summer. The Company plans to use
the net proceeds from the offering to expand its Internet services business (the
ISP Channel(SM)) and for general corporate purposes.
The units have not been and will not be registered under the Securities Act of
1933, as amended, or applicable state or foreign securities laws, and may not be
offered or sold in the United States absent registration under federal and
applicable state securities laws or an available exemption from such
registration requirements. This news release shall not constitute an offer to
sell or the solicitation of an offer to buy the units.
SoftNet operates three divisions. SoftNet's Internet division provides
comprehensive business-to-business Internet services including Internet access
and web development along with the "ISP Channel(SM)" branded program for cable
operators. SoftNet's Document Management division develops, markets, installs
and services electronic information and document management systems that allow
customers to electronically request and receive information from multiple media.
The Company's Telecommunications division markets and installs telecom and
datacom solutions to middle-market companies.
