UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 3, 2002
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TeraForce Technology Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-11630 76-0471342
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1240 East Campbell Road, Richardson, Texas 75081
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (469) 330-4960
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The Company hereby amends "Item 5. Other Events" and "Item 7. Financial
Statements and Exhibits" of its Current Report on Form 8-K filed on October 21,
2002, dated October 3, 2002, to include the following:
ITEM 5. OTHER EVENTS.
As part of our previously announced financial restructuring, on October 29,
2002, the Company completed the sale of 4,166,666 shares of common stock for
$.12 per share to six private investors for aggregate net cash proceeds of
$500,000. The Company will apply the net proceeds to working capital. Including
sales of common stock that were completed earlier in October 2002, the Company
has (i) repaid or reduced indebtedness by $2,000,000, and (ii) privately placed
6,250,000 shares of the Company's common stock for $.12 per share to raise
$750,000 in working capital.
The Company has entered into registration rights agreements with each of these
six investors, and has agreed to file a registration statement with the
Securities and Exchange Commission under the Securities Act of 1933 (the
Securities Act) registering the resale of the 4,166,666 shares of common stock
purchased by the investors no later than November 30, 2002.
The Company's sales of common stock were exempt from registration pursuant to
Section 4(2) of the Securities Act and pursuant to Rule 506 of Regulation D of
the Securities Act. A Rule 506 exemption was available for these sales because
the Company sold only to accredited investors; the Company did not solicit or
advertise the sales; a restrictive legend was placed on each certificate issued
describing the restrictions against resale; and a Form D was filed with the
Securities and Exchange Commission and in each state where the individual
investors reside.
The Company is currently pursuing discussions to raise additional equity
capital, but there can be no assurance that the Company will be successful in
its efforts.
The Company is in the process of completing the restructuring of its other debt
obligations. The Company believes it has an agreement in principle regarding
$600,000 in notes payable by the Company in favor of a private investor who
provided the letter of credit for the June 1, 2001, Bank One, N.A. Credit
Agreement, as amended. The tentative agreement is to exchange these notes for a
new note with a maturity of September 15, 2003. The Company also believes it has
an agreement in principle to amend its $1,500,000 Loan Agreement with Bank One,
N.A., dated October 12, 2001, that is also guaranteed by this private investor.
Under the tentative agreement the maturity of this facility's term would be
extended to September 15, 2003, and the private investor would continue to
provide an unconditional guarantee of the Bank One facility. The Company has not
reached definitive agreements for either of these contemplated transactions.
There can be no assurance that these proposed arrangements will be completed as
described or that they will be completed at all.
These statements in "Other Events" regarding our expectations in terms of
raising additional equity capital and restructuring our indebtedness are
forward-looking statements as defined in Section 27A of the Securities Act of
1933. We use the words "may," "will," "expect,"
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"anticipate," "believe," "continue," "intend," or other similar words to
identify forward-looking statements. You should read statements that contain
these words carefully because they discuss future expectations and/or state
other "forward-looking" information. Events may occur in the future that we are
unable to accurately predict, or over which we have no control. If one or more
of these uncertainties materialize, or if underlying assumptions prove
incorrect, actual outcomes may vary materially from those forward-looking
statements included in this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business to Be Acquired: N/A
(b) Pro Forma Financial Information: N/A
(c) Exhibits:
Exhibit Description of Exhibit
4.1 Form of Securities Purchase Agreement
4.2 Form of Registration Rights Agreement
4.3 Schedule of Investors
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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.
TeraForce Technology Corporation
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(Registrant)
Date: November 12, 2002 By: /s/ Herman M. Frietsch
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(Signature)
Herman M. Frietsch
Chairman of the Board and CEO
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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4.1 Form of Securities Purchase Agreement
4.2 Form of Registration Rights Agreement
4.3 Schedule of Investors