Attached files
UNITED STATES
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): February 24, 2010 (February 18, 2010)
OVERLAND STORAGE, INC.
(Exact name of registrant as specified in its charter)
California | 000-22071 | 95-3535285 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer Identification Number) |
4820 Overland Avenue
San Diego, California 92123
(Address of principal executive offices)
Registrants telephone number, including area code: (858) 571-5555
Not applicable
(Former name or former address, if changed since last report).
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement. |
On February 18, 2010, Overland Storage, Inc. (the Company) entered into a placement agency agreement (the Placement Agency Agreement) with Roth Capital Partners, LLC, as placement agent (the Placement Agent), relating to a proposed offering of securities of the Company. A copy of the Placement Agency Agreement is attached hereto as Exhibit 1.1 and incorporated herein by reference.
On February 18, 2010, the Company entered into a Purchase Agreement (the Purchase Agreement) between the Company and the investors party thereto (the Investors). A copy of the form of Purchase Agreement is attached hereto as Exhibit 10.1 and incorporated herein by reference. Pursuant to the Purchase Agreement, the Company agreed to issue to the Purchasers in a private placement an aggregate of 794,659 shares of the Companys Series A Convertible Preferred Stock, no par value per share (the Series A Preferred Stock), initially convertible into 4,521,616 shares of the Companys common stock, no par value per share (the Common Stock), and (ii) warrants initially exercisable to purchase up to 6,373,266 shares of Common Stock (together with the Placement Agent Warrants (as defined below), the Warrants), for an aggregate offering price of approximately $11.9 million (the Offering). A copy of the form of the Series A Preferred Stock certificate is attached hereto as Exhibit 4.1.
In connection with the Offering, the Company has agreed to solicit shareholder approval of the Offering at a shareholders meeting to be held not later than April 30, 2010 (the Shareholders Meeting).
Each Warrant has an initial exercise price of $2.583 per share of Common Stock. The Warrants are immediately exercisable, have a five year term and provide for weighted-average anti-dilution protection. The warrants are subject to a 20% blocker provision and a floor on adjustments to the exercise price to comply with Nasdaq Marketplace Rules, which provisions will expire if the shareholders approve the Offering at the Shareholders Meeting. A copy of the form of the Warrants is attached hereto as Exhibit 4.2 and incorporated herein by reference.
The Company also entered into a Registration Rights Agreement dated as of February 22, 2009, by and among the Company, the Investors and the Placement Agent (the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company has agreed to file a registration statement (the Registration Statement) with the Securities and Exchange Commission within 30 days of closing the Offering (the Filing Deadline) to register the shares of Common Stock issuable upon conversion or exercise of the shares of Series A Preferred Stock and the Warrants, as the case may be (collectively, the Underlying Shares). In the event the Company does not file the Registration Statement on or before the Filing Deadline, the Company will be required to pay liquidated damages in an amount equal to 1.5% of the aggregate amount invested by each Investor for each 30-day period or pro rata portion thereof following the Filing Deadline. A copy of the form of Registration Rights Agreement is attached hereto as Exhibit 4.3 and incorporated herein by reference.
In connection with the Offering and as partial compensation for the Placement Agents services, the Company issued to the Placement Agent a warrant initially exercisable to purchase up to 180,865 shares of Common Stock at an exercise price of $2.952 per share of Common Stock (the Placement Agent Warrants).
The above descriptions of the Placement Agency Agreement, the Purchase Agreement, the Warrants and the Registration Rights Agreement are qualified in their entirety by reference to Exhibits 1.1, 10.1, 4.2 and 4.3 attached hereto, respectively.
Item 3.02 | Unregistered Sales of Equity Securities. |
All shares of Series A Preferred Stock, the Warrants, and the Underlying Shares were offered and sold by the Company pursuant to an exemption from the registration requirements of the Securities Act 1933, as amended (the Securities Act), provided by Section 4(2) thereunder.
Item 3.03 | Material Modification to Rights of Security Holders. |
On February 19, 2010, the Company filed the Certificate of Determination of Rights, Preferences, Privileges and Restrictions of Series A Convertible Preferred Stock (the Certificate of Determination) to its Amended and Restated Articles of Incorporation (the Articles of Incorporation) with the Secretary of State of the State of California, establishing the Series A Preferred Stock. Each share of Series A Preferred Stock has a stated value of $15.00 (the Stated Value). Each holder of shares of Series A Preferred Stock is entitled to receive cumulative dividends at the rate of 6% per annum of the Stated Value for each share of Series A Preferred Stock held by such holder, provided that no dividend shall accrue or become payable on any shares of Series A Preferred Stock that are converted into shares of Common Stock on or prior to June 30, 2010. Each share of Series A Preferred Stock is entitled to a liquidation preference equal to the greater of (i) the Stated Value plus any accrued and unpaid dividends or (ii) such amount per share of Series A Preferred Stock as would have been payable had such share of Series A Preferred Stock been converted into shares of Common Stock immediately prior to such liquidation. The shares of Series A Preferred Stock are convertible into shares of Common Stock at an initial conversion price of $2.6362 per share and are convertible (a) at the option of the holder at any time after the earlier of (x) the record date for the Shareholders Meeting and (y) March 21, 2010, or (b) automatically if the shareholders approve the Offering at the Shareholders Meeting, provided that in the case of clause (a), the conversion of shares of Series A Preferred Stock into shares of Common Stock is subject to a 20% blocker provision, which provision will expire if the shareholders approve the Offering at the Shareholders Meeting. Except as is otherwise required by law, Holders of shares of Series A Preferred Stock are entitled to vote together with shares of Common stock (based on one vote per share of Series A Preferred Stock) on any matter on which the holders of Common Stock are entitled to vote, provided that no shares of Series A Preferred Stock may be voted at the Shareholders Meeting to approve the Offering. In addition, for so long as any shares of Series A Preferred Stock remain outstanding, the Company may not, among other things, (1) authorize, create, designate, establish or issue an increased number of shares of Series A Preferred Stock or any other class or series of capital stock ranking senior to or on parity with the shares of Series A Preferred Stock, (2) amend any existing stock option, stock compensation or stock purchase plan to increase the number of shares of Common Stock covered thereby except as permitted by the Certificate of Determination, (3) enter into any transaction with any affiliate or shareholder of the Company without the approval of a majority of the non-employee members of the Board of Directors, (4) amend, alter or repeal, whether by merger, consolidation or otherwise the Articles of Incorporation, the Certificate of Determination or the Companys Amended and Restated Bylaws in a manner which would adversely affect any right, preference, privilege or voting power of the shares of Series A Preferred Stock, or (5) directly or indirectly purchase, redeem, repurchase or otherwise acquire any shares of Common Stock or any other class or series of the Companys capital stock other than repurchases from current or former employees, consultants or directors upon termination of service. A copy of the Certificate of Determination is attached hereto as Exhibit 3.1 and incorporated herein by reference. The above description of the Certificate of Determination is qualified in its entirety by reference to Exhibit 3.1 attached hereto.
Item 5.02 | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements with Certain Officers. |
(e) | Compensatory Arrangements with Certain Officers. |
The Compensation Committee of the Board of Directors (the Compensation Committee) approved a new bonus plan, the Annual Incentive Plan for Senior Officers (the Bonus Plan), which became effective February 18, 2010, that provides bonus opportunities for selected employees of the Company, including each of the Companys chief executive officer and chief financial officer. Each participant in the Bonus Plan is assigned a target bonus percentage that is expressed as a percentage of the participants base salary for the applicable bonus period. Bonuses are determined based on the Companys revenue, gross profit and operating income during the bonus period in relation to performance goals established by the Compensation Committee.
The bonus opportunities for the chief executive officer and chief financial officer under the Bonus Plan for the 6-month period ending June 30, 2010 are set forth in the following table:
Executive Officer |
Target Bonus (% of Base Salary) | |
Eric Kelly |
100% | |
Kurt Kalbfleisch |
50% |
The Compensation Committee also approved grants of stock options to the chief executive officer and chief financial officer under the Companys 2009 Equity Incentive Plan (the Equity Plan). These option grants are subject to approval by the shareholders of the Company of an increase in the number of shares of Common Stock available for award grant purposes under the Equity Plan within six months following the date of grant.
The following table presents the number of options granted to such officers:
Executive Officer |
No. of Options Granted | |
Eric Kelly |
1,238,000 | |
Kurt Kalbfleisch |
177,000 |
The Compensation Committee also approved an increase in Mr. Kalbfleischs base salary to $240,000.
Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On February 19, 2010, the Company filed the Certificate of Determination, a copy of which is attached hereto as Exhibit 3.1 and incorporated herein by reference. The Certificate of Determination, which is effective as of February 19, 2010, establishes and designates the Series A Preferred Stock and the rights, preferences, privileges and restrictions thereof.
Item 7.01 | Regulation FD Disclosure. |
A copy of the Companys press release, entitled Overland Storage Announces Private Placement of Approximately $12.0 Million of Equity Securities is furnished and not filed pursuant to Item 7.01 as Exhibit 99.1 hereto. Such information shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Companys filings under the Securities Act or the Exchange Act whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit |
Description | |
1.1 | Placement Agency Agreement, dated February 18, 2010, by and between Overland Storage, Inc. and Roth Capital Partners, LLC. | |
3.1 | Certificate of Determination of Rights, Preferences, Privileges and Restrictions of Series A Convertible Preferred Stock | |
4.1 | Form of Series A Preferred Stock Certificate. | |
4.2 | Form of Common Stock Purchase Warrant. | |
4.3 | Form of Registration Rights Agreement. | |
10.1 | Form of Purchase Agreement. | |
99.1 | Press Release, dated February 22, 2010, entitled Overland Storage Announces Private Placement of Approximately $12.0 Million of Equity Securities. |
SIGNATURE
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.
OVERLAND STORAGE, INC. | ||||||||
Date: February 24, 2010 | By: | /s/ Kurt L. Kalbfleisch | ||||||
Kurt L. Kalbfleisch | ||||||||
Vice President, Finance and Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
Description | |
1.1 | Placement Agency Agreement, dated February 18, 2010, by and between Overland Storage, Inc. and Roth Capital Partners, LLC. | |
3.1 | Certificate of Determination of Rights, Preferences, Privileges and Restrictions of Series A Convertible Preferred Stock | |
4.1 | Form of Series A Preferred Stock Certificate. | |
4.2 | Form of Common Stock Purchase Warrant. | |
4.3 | Form of Registration Rights Agreement. | |
10.1 | Form of Purchase Agreement. | |
99.1 | Press Release, dated February 22, 2010, entitled Overland Storage Announces Private Placement of Approximately $12.0 Million of Equity Securities. |