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):
March 4, 2002
eMagin Corporation
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 000-24757 56-1764501
-------------------------------- ------------------------ -------------------
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification
Number)
2070 Route 52, Hopewell Junction, New York 12533
--------------------------------------------------------------------------------
(Address of principal executive offices) (zip code)
(845) 892-1900
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On March 4, 2002, eMagin Corporation ("eMagin" or the "Company")
entered into a common stock purchase agreement (the "Purchase Agreement") and
related documents (collectively, the "Transaction Agreements") with Northwind
Associates, Inc., a Cayman Islands corporation (the "Investor"), pursuant to
which the Company may receive in periodic draw downs at its option, subject to
the terms and conditions of the Transaction Agreements, up to $15,000,000 in
equity financing (the "Equity Line") over a three year period. The aggregate
amount of the Equity Line may increase to $20,000,000 provided certain
additional conditions regarding share price, trading volume and Company market
capitalization are met. The initial closing of the Purchase Agreement occurred
on Friday, March 22, 2002. The right of the Company to draw down on the Equity
Line is subject to the Company registering for resale and the continuing
effectiveness of such registration with the U.S. Securities and Exchange
Commission (the "Commission") the shares of eMagin common stock issuable
pursuant to the Equity Line and is also subject to certain other significant
conditions, including limits as to the maximum and minimum draw down amounts as
specified in the common stock purchase agreement. The maximum investment amount
for any draw down is the lesser of (i) $5,000,000, and (ii) 15% of the volume
weighted average price for the Company's common stock (as reported by the
American Stock Exchange) for the 30 trading days immediately prior to the
applicable commencement date for such draw down multiplied by the total
aggregate trading volume in respect of the Company's common stock for such
period. Pursuant to a draw down, the Investor will purchase the shares of the
Company at a discount to the price of the Company's common shares on the
American Stock Exchange. More specifically, the discounted purchase price to be
paid by the Investor under the Equity Line will generally equal (i) 88% of the
daily volume weighted average price of the Company's common stock on the
American Stock Exchange for a prescribed 10 trading day period provided that the
such stock price is less than $4.00 per share at the time of determination, (ii)
90% should such Company stock price at the time of determination exceed $4.00
per share, and (iii) 92% should such Company stock price at the time of
determination exceed $6.00 per share. The discounted purchase price may be
reduced by an additional 3% pursuant to certain special conditions as set forth
in the Purchase Agreement. The amount of Company shares issued pursuant to draw
downs on the Equity Line is also limited to 19.9% of the issued and outstanding
Company common stock (unless stockholder approval of any excess amount is
received) and no draw down shall be made to the extent that it would result in
the Investor and its affiliates beneficially owning more than 9.9% of the
Company's outstanding common stock. The Purchase Agreement also limits the
Company's ability to enter into any other equity line type of financing during
the term of the agreement and provides to the Investor a right of first refusal
for certain subsequent sales by the Company of its securities.
Additionally, in consideration for the Investor's purchase commitment
under the Equity Line and certain costs associated therewith, the Company issued
to the Investor 30,000 unregistered shares of eMagin's common stock and warrants
to purchase up to 150,000 shares of the Company's common stock at an exercise
price equal to 115% of the daily volume weighted average price of the common
stock for the fifteen trading days preceding the date of the delivery of the
warrant by the Company. Each warrant is exercisable for a period of three years
commencing six months from the date of their delivery by the Company.
In connection with the Equity Line, the Company also entered into a
registration rights agreement dated as of March 4, 2002 (the "Registration
Rights Agreement") with the Investor that requires the Company to file, obtain
and maintain the effectiveness of a Registration Statement on an appropriate
form with the Commission in order to register the sale and public resale of
shares of the common stock acquired by the Investor under the Transaction
Agreements. Under the terms of the Registration Rights Agreement, the Company
must file such registration statement within sixty days of the date of the
agreement.
-2-
On March 19, 2002, eMagin issued a press release concerning the
transactions described above, a copy of which is attached as Exhibit 99.1 to
this Form 8-K and incorporated herein by reference.
The foregoing description is only a summary of the transactions
described and is qualified in its entirety by the Common Stock Purchase
Agreement, the Registration Rights Agreement, the Form of Warrant and the Escrow
Agreement attached as exhibits to this Form 8-K, which exhibits are incorporated
herein by reference.
ITEM 7. EXHIBITS.
Exhibit
Number Description
4.1 Form of Warrant.
10.1 Common Stock Purchase Agreement dated as of March 4, 2002 by
and between eMagin and the Investor.
10.2 Form of Registration Rights Agreement by and between eMagin
and the Investor.
99.1 Press Release of the Company dated March 19, 2002,
announcing the $15,000,000 equity financing commitment.
99.2 Form of Escrow Agreement.
-3-
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMAGIN CORPORATION
By:
-----------------------------------
Name: Edward V. Flynn
Title: Chief Financial Officer
Dated: March 26, 2002
-4-