-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F/jQ+2rhV5I5zA7uzt9P565rk+7XHNs99/mg7lVKjtFGDMJVK9RtGQQ6QdJus7U+ 8ADM2hOE22fmctJl0E4WRQ== 0000911420-02-000274.txt : 20021101 0000911420-02-000274.hdr.sgml : 20021101 20021101112137 ACCESSION NUMBER: 0000911420-02-000274 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021025 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMDIAL CORP CENTRAL INDEX KEY: 0000230131 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 942443673 STATE OF INCORPORATION: DE FISCAL YEAR END: 0724 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09023 FILM NUMBER: 02806073 BUSINESS ADDRESS: STREET 1: 1180 SEMINOLE TRAIL STREET 2: P O BOX 7266 CITY: CHARLOTTESVILLE STATE: VA ZIP: 22906-2200 BUSINESS PHONE: 8049782200 MAIL ADDRESS: STREET 1: 1180 SEMMINOLE TRAIL STREET 2: P O BOX 7266 CITY: CHARLOTTESVILLE STATE: VA ZIP: 22906 8-K 1 d847398.txt CURRENT REPORT 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): October 25, 2002 COMDIAL CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-9023 94-2443673 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 106 Cattlemen Road Sarasota, Florida 34232 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (941) 554-5000 -------------- ITEM 5. OTHER EVENTS. Second Closing of Private Placement As previously disclosed in our Current Report on Form 8-K dated October 2, 2002, as amended on October 2, 2002, Comdial Corporation (the "Company" or "Comdial") consummated an initial closing of approximately $14.5 million under two private placements (collectively, the "Private Placement"). This included the issuance of approximately $12.5 million aggregate principal amount of 7% subordinated secured convertible promissory notes (the "7% Notes") and $2.0 million aggregate principal amount of 12% subordinated secured convertible promissory notes (the "12% Notes"), and warrants to purchase an aggregate of approximately 68.2 million shares of the Company's common stock at an exercise price of $0.01 per share (the "Placement Warrants"). On October 29, 2002, the Company conducted a second and final closing (the "Second Closing") under the Private Placement. The Second Closing included the issuance of $775,000 aggregate principal amount of 7% Notes, and 3,875,000 Placement Warrants. Accordingly, the total amount invested pursuant to the Private Placement was approximately $15.3 million. Of the Placement Warrants issued under the Second Closing, 775,000 are subject to forfeiture, on a pro rata basis, if the 7% Notes issued pursuant to the Second Closing are repaid during the first eighteen months following their issuance. The 7% Notes may in the future be convertible under certain circumstances at the option of the Company if the common stock of the Company trades at or above $1.00 for 20 consecutive trading days. The initial conversion price of the 7% Notes is $0.33 per share, and is subject to downward adjustment in the event of certain defaults. In addition, the Common Stock underlying the 7% Notes and the Placement Warrants is subject to certain registration rights. The Company received $775,000 in new investments from the Second Closing. In connection with the Second Closing, Commonwealth Associates, L.P. ("Commonwealth") received a 7% placement fee equaling approximately $55,000 and approximately $44,000 in expenses. Pursuant to the terms of the previously disclosed placement agency agreement between the Company and Commonwealth, the Company issued warrants to Commonwealth to acquire 387,500 shares of Common Stock at an exercise price of $0.01 per share. The net proceeds of the Second Closing was approximately $662,000, which will be used for working capital purposes. Amendment to Reimbursement Agreement As previously reported, ComVest Venture Partners, L.P. ("ComVest"), an affiliate of Commonwealth, deposited $1.5 million to secure two outstanding letters of credit previously issued by Bank of America ("BofA") to the Company, and entered into a pledge agreement (the "Pledge Agreement") with BofA concerning the disposition of the deposited funds. As security for the deposit, the Company entered into a reimbursement agreement (the "Reimbursement Agreement") with ComVest, and issued a revolving note (the "Revolving Note") to ComVest in the amount of the deposit. On October 25, 2002, ComVest and the Company entered into an amendment to the Reimbursement Agreement (the "Amendment"). Pursuant to the Amendment the Company paid $1.5 million to ComVest and ComVest issued a letter of direction to BofA directing BofA to pay to the Company any amounts payable to ComVest pursuant to the Pledge Agreement. In addition, the Revolving Note was canceled. 2 Changes in Board of Directors On October 3, 2002, Michael S. Falk and Edwin W. Cooperman were named to the Company's Board of Directors, and Travis Lee Provow was named Chairman of the Board, replacing Nickolas A. Branica, the Company's CEO who was serving as interim Chairman and who will remain on the Board as a director. Also on such date, Joseph P. Wynne resigned from the Board. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) None. (b) None. (c) 99.1 Press Release dated October 30, 2002 3 Forward-Looking Statements This Form 8-K contains statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, including Comdial Corporation's ability to obtain additional funding for its business, the illiquidity caused by the delisting of its stock from the Nasdaq SmallCap Market and its ability to obtain a listing on NASD's OTC-BB, Nasdaq or another national exchange, the risks associated with the outsourcing of its manufacturing requirements, including international risk factors, its ability to meets its obligations to its suppliers and its lenders, its ability to achieve its operational goals and to generate positive cash flow, any unfavorable outcomes of pending disputes or litigation and the various other factors set forth from time to time in Comdial's filings with the SEC, including but not limited to Comdial's most recent Form 10-K and 10-Q. Comdial Corporation undertakes no obligation to publicly update or revise the forward-looking statements made in this press release to reflect events or circumstances after the date of this Form 8-K or to reflect the occurrence of unanticipated events. 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. COMDIAL CORPORATION By: /s/ Paul K. Suijk ---------------------------------------- Paul K. Suijk Senior Vice President and Chief Financial Officer Dated: November 1, 2002 5 EX-99.1 3 e847399.txt PRESS RELEASE EXHIBIT 99.1 PRESS RELEASE Comdial Corporation 106 Cattlemen Road Sarasota, FL 34232 Telephone (941) 554-5000 Contact: Paul K. Suijk, Chief Financial Officer (x1104) FOR IMMEDIATE RELEASE - --------------------- COMDIAL ANNOUNCES FINAL CLOSING OF $15.3 MILLION PRIVATE PLACEMENT AND CHANGES IN BOARD OF DIRECTORS SARASOTA, FL. - OCTOBER 30, 2002 - Comdial Corporation (the "Company") (NASD OTC: CMDL.PK) announced today that on October 29, 2002, the Company conducted a second and final closing (the "Second Closing") under its private placement (the "Private Placement") for a total of $15.3 million. As previously announced, the Company consummated an initial closing of approximately $14.5 million under the Private Placement on September 27, 2002. "Securing this investment reflects the confidence of the investment community in our products, distribution channel, and business strategy. The successful placement of this offering concludes a two-year implementation of our new business model. Now that we have this behind us, we can focus our resources on advancing our market position," commented Nick Branica, President and Chief Executive Officer. The Second Closing included the issuance by the Company to accredited investors of 7% subordinated secured convertible promissory notes in the aggregate principal amount of $775,000 and warrants to purchase approximately 3.9 million shares of the Company's common stock at an exercise price of $0.01 per share. Commonwealth Associates, L.P. acted as placement agent in connection with the Private Placement. ComVest Venture Partners, L.P., an affiliate of Commonwealth, was the largest single investor in the Private Placement with a purchase of approximately $3.2 million of the notes. COMDIAL ANNOUNCES PRIVATE PLACEMENT INVESTMENT; CHANGES IN BOARD With this cash infusion, Comdial will continue implementing its marketing strategies, which include: o Developing its enhanced IP-PBX, next generation SIP-based open standards telephony platform, integrated messaging options, and a value-priced mid-market telephony platform. o Expanding its sales and distribution channel, leveraging its national accounts program, and strengthening its existing dealer relationships. o Exploring new market opportunities such as multi-media contact center applications, international distribution, new service and support programs, and recurring revenue offers. In addition to the new investments, the Company also announced changes in its Board of Directors. Comdial announced that Travis Lee Provow has been named Chairman of the Board and that Edwin Cooperman and Michael Falk have been named directors of the Company. Mr. Provow replaces Nickolas Branica, the Company's President and CEO, as Chairman, a position Mr. Branica held on an interim basis. Mr. Branica will continue to serve as a director and CEO. Mr. Provow previously served as President and Chief Executive Officer of Intelispan since January 2000, until the company was sold to McLeod USA, and served as a director since August 1998. From May 1998 to December 1999, Mr. Provow served as the Chief Operating Officer of Slingshot Networks LLC, a provider of digital media storage, until the company was purchased by Qwest Communications. From June 1995 to May 1998, Mr. Provow served as the Executive Vice President and Chief Operating Officer of GridNet International, a provider of enhanced data communications services, which Mr. Provow founded and which was purchased by MCI WorldCom in July 1997. Prior to founding GridNet, Mr. Provow spent 15 years with NCR and its successor, AT&T Global Information Services, in various domestic and international technical, marketing, product management, and strategic planning positions, including Vice President of Retail Product and Systems Marketing. Mr. Provow serves as a director of US Wireless Data, Horizon Medical Products and Intraware. COMDIAL ANNOUNCES PRIVATE PLACEMENT INVESTMENT; CHANGES IN BOARD Mr. Cooperman is a principal of T.C. Solutions, a privately-held investment and financial services consulting firm. Previously, Mr. Cooperman was Chairman of the Travelers Bank Group and Executive Vice President, Travelers Group, where he was responsible for strategic marketing, the integration of Travelers brands and products, joint and cross marketing efforts and corporate identity strategies, as well as expanding the Travelers Bank Group's credit card run in portfolios. After joining Travelers in 1991, Mr. Cooperman became Chairman and CEO of Primerica Financial Services Group, which comprises Primerica Financial Services, Benefit Life Insurance Company and Primerica Financial Services Canada. Previous to this, Mr. Cooperman served at American Express where he became Chairman and Co-Chief Executive of Travel Related Services, North America. Mr. Cooperman is also a director of US Wireless Data, Inc., ProxyMed, Inc. and Grannum Value Mutual Fund. Mr. Falk co-founded Commonwealth Associates in 1988 and in 1995 became Chairman, Chief Executive Officer, and President. Under Mr. Falk's leadership, Commonwealth has become a leading private equity financier of emerging technology company's. Mr Falk is responsible for Commonwealth's strategy and direction and spends the majority of his time working closely with Commonwealth's portfolio companies. He is a director of Proxymed and Intraware. Mr. Falk is a graduate of the Stanford University Executive Program for Smaller Companies and holds a BA degree with honors in Economics from Queens College. "Edwin Cooperman and Michael Falk each bring tremendous talent and a wealth of experience to help guide the new Comdial," said Mr. Provow. "Overall, the strength of the current board puts us in a very good position for growth and success in the future." Mr. Provow also discussed the Company's financial and competitive position. He said, "Comdial has been in business more than 25 years and has built a brand known for quality and reliability. With very limited financial flexibility, management has successfully concluded a refinancing and restructuring of the Company and has positioned the Company for future success. The Company's financial challenges over the past couple of years were caused primarily by its heavy debt load, upheavals in the telecommunications industry and the overall economic malaise affecting the country. These conditions have posed a significant challenge to management, but the Company has been able to get through this COMDIAL ANNOUNCES PRIVATE PLACEMENT INVESTMENT; CHANGES IN BOARD period and is finally ready to take the next step in its transformation. The Company is now financially positioned to aggressively meet the challenges that remain." This announcement does not constitute an offer to sell nor shall there be any sale of these securities in any state in which such offering, solicitation or sale would be unlawful. The securities sold in the aforementioned described offering will not be nor have they been registered under the Securities Act of 1933, as amended, and they may not be offered or sold in the United States absent a registration or applicable exemption from registration requirements. ABOUT COMDIAL - ------------- Comdial Corporation, headquartered in Sarasota, Florida, develops and markets sophisticated communications solutions for small to mid-sized offices, government, and other organizations. Comdial offers a broad range of solutions to enhance the productivity of businesses, including voice switching systems, voice over IP (VoIP), voice processing and computer telephony integration solutions. For more information about Comdial and its communications solutions, please visit www.comdial.com. ABOUT COMMONWEALTH ASSOCIATES - ----------------------------- Commonwealth Associates, L.P. is an Investment and Merchant Bank, established in 1988, dedicated to creating long-term value for its corporate clients and investors. Through its affiliated fund, ComVest Venture Partners, L.P., Commonwealth contributes its own capital and its partners' capital to each transaction, typically acting as the lead investor in each investment that it sponsors. For more information about Commonwealth Associates, please visit www.comw.com. FORWARD-LOOKING STATEMENTS This press release contains statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, including Comdial Corporation's ability to obtain additional funding for its business, the illiquidity of its stock as a result of its delisting on the Nasdaq SmallCap Market and its ability to obtain a listing for its stock on another national market, the risks associated with the outsourcing of its manufacturing requirements, including international risk factors, its ability to meets its obligations to its suppliers and its lenders, its ability to achieve its operational goals and to generate positive cash flow, any unfavorable outcomes of pending disputes or litigation and the various other factors set forth from time to time in Comdial's filings with the SEC, including but not limited to Comdial's most recent Form 10-K and Form 10-Q. Comdial Corporation undertakes no obligation to publicly update or revise the forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. - END - -----END PRIVACY-ENHANCED MESSAGE-----