Attached files
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| EX-99 - EXHIBIT 99.1 - IMAGEWARE SYSTEMS INC | ex99-1.htm |
| EX-10 - EXHIBIT 10.1 - IMAGEWARE SYSTEMS INC | ex10-1.htm |
| EX-3 - EXHIBIT 3.1 - IMAGEWARE SYSTEMS INC | ex3-1.htm |
UNITED STATES
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): July 9, 2020
IMAGEWARE SYSTEMS, INC.
(Exact name of Registrant as specified in its Charter)
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Delaware
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001-15757
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33-0224167
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(State
or other jurisdiction
of
incorporation)
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(Commission
File No.)
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(IRS
Employer
Identification
No.)
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13500
Evening Creek Drive N., Suite 550
San Diego, California 92127
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(Address
of principal executive offices)
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(858)
673-8600
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(Registrant’s
Telephone Number)
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Not
Applicable
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(Former
name or address, if changed since last report)
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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))
Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name
of exchange on which registered
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None
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IWSY
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N/A
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (17
CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR 240.12b-2) ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act ☐
Item 1.01 Entry into a Material Definitive Agreement
See
Item 8.01 below.
Item 3.02 Unregistered Sales of Equity Securities
See
Item 8.01 below.
Item 3.03 Material Modifications to Rights of Security
Holders
See
Item 8.01 below.
Item 5.03 Amendments to Articles of
Incorporation or Bylaws; Change in Fiscal Year
Creation of Series A-1 Convertible Preferred Stock
On July 14, 2020, ImageWare Systems, Inc. (the
“Company”) filed the Certificate of Designations,
Preferences, and Rights of Series A-1 Convertible Preferred Stock
(“Series A-1
COD”) with the Secretary
of State for the State of Delaware – Division of
Corporations, designating 31,021 shares of the Company’s
preferred stock, par value $0.01 per share, as Series A-1
Convertible Preferred Stock (“Series A-1
Preferred”). Shares of
Series A-1 Preferred accrue cumulative
dividends and are payable quarterly beginning March 31, 2021 at a
rate of 8% per annum if paid in cash, or 10% per annum if paid by
the issuance of shares of the Company’s common stock, par
value $0.01 per share (“Common
Stock”).
Shares of Series A-1 Preferred rank senior to the
Company’s Common Stock, pari-passu to the Company's Series A
Convertible Preferred Stock (the “Series A
Preferred”), and
are subordinate and rank junior to (i) the Series B Convertible
Redeemable Preferred Stock; (ii) the Series C Convertible
Redeemable Preferred Stock (“Series C Preferred”); (iii) any
Series C-1 Convertible Preferred Stock (“Series
C-1 Preferred”) that may be created and
issued upon exchange of the Series C Preferred; (iv) any Preferred
Stock (“New
Preferred”) issued in connection with a financing
resulting in gross proceeds to the Company of at least $10.0
million (“Qualified
Financing”), provided such Qualified Financing occurs
on or before December 31, 2020. In the event the Company
consummates a Qualified Financing prior to December 31, 2020, the
Company may continue to offer such New Preferred until December 31,
2020, provided, however,
the Qualified Financing shall not exceed $15.0 million, exclusive
of any New Preferred offered in exchange for Series C Preferred or
Series C-1 Preferred; and (v) all indebtedness of the Company now
or hereafter outstanding.
Each share of Series A-1 Preferred has a
liquidation preference equal to the greater of the greater
of (i) $1,000 per share plus all accrued and unpaid dividends, or
(ii) such amount per share as would have been payable had each such
share been converted into Common Stock immediately prior to such
liquidation, dissolution or winding up (the amount payable pursuant
to the foregoing is referred to herein as the “Series A-1 Liquidation
Preference Amount”) before any payment shall
be made or any assets distributed to the holders of the Common
Stock or any other classes and series of equity securities of the
Company which by their terms rank junior to the Series A-1
Preferred.
Each share of Series A-1 Preferred is convertible
into that number of shares of the Company’s Common
Stock (“Series A-1 Conversion
Shares”) equal to
that number of shares of Series A-1 Preferred being converted
multiplied by $1,000, divided by $0.65, or the conversion price as
defined in the Series A-1 COD in effect as of the date the holder
delivers to the Company their notice of election to convert.
Holders of Series A-1 Preferred may
elect to convert shares of Series A-1 Preferred into Series A-1
Conversion Shares at any time.
The
foregoing description of the Series A-1 Preferred is qualified, in
its entirety, by the full text of the Series A-1 COD, a copy of
which is attached to this Current Report on Form 8-K as
Exhibit 3.1 and is incorporated by reference
herein.
Item 8.01 Other Events
On
July 9, 2020, the Company entered into
an Exchange Agreement, Consent and Waiver
(“Exchange
Agreement”) with certain
holders of its Series A Preferred (the "Series A
Holders"), pursuant to which
such Series A Holders agreed to exchange one-half of the Series A
Preferred beneficially owned by such Series A Holders for an
equivalent number of Series A-1 Preferred in consideration for
their waiver of approximately $1,705,000 in dividends payable to
the Series A Holders on Series A Preferred beneficially owned by
such Series A Holders and payable for the quarters ended March 31,
2020 and June 30, 2020 , (the “Series A
Restructuring”). Shares
of the Series A-1 Preferred issued to the Series A Holders pursuant
to the Exchange Agreement are convertible into shares of Common
Stock at $0.65 per share, and automatically convert into Common
Stock when the volume weighted average closing price (VWAP) of the
Company’s Common Stock for the preceding twenty trading days
is at least $1.00.
A copy
of the Exchange Agreement is attached hereto as Exhibit
10.1.
The
foregoing description of the Exchange Agreement does not purport to
be complete, and is qualified in its entirety by reference to the
form of Exchange Agreement attached hereto as Exhibit 10.1,
which is incorporated by reference herein.
On July 15, 2020,
the Company issued a press release announcing the Series A
Restructuring. A copy of the press release is attached hereto as
Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
(d)
Exhibits
EXHIBIT INDEX
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Exhibit Number
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Description
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Certificate
of Designations, Preferences, and Rights of Series A-1 Convertible
Preferred Stock of ImageWare Systems, Inc., dated July 14,
2020
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Form of Exchange Agreement, Consent and Waiver
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Press
Release dated July 15, 2020
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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.
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IMAGEWARE SYSTEMS, INC.
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Date:
July 15, 2020
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By:
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/s/
Jonathan Morris
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Jonathan
Morris
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Chief
Financial Officer
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