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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1 TO 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 23, 2005
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RCG COMPANIES INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 1-8662 23-2265039
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
6836 MORRISON BLVD., STE. 200, CHARLOTTE, 28211
NORTH CAROLINA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (704) 366-5054
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(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))
EXPLANATORY NOTE
This Amendment No. 1 to our Current Report on Form 8-K filed February 14,
2005 is being filed for the sole purposes of (i) adding one investor to the
private placement, (ii) increasing the aggregate amount raised in the private
placement by $500,000, and (iii) filing as exhibits the following two additional
agreements: Amendment No. 1 to Securities Purchase Agreement dated February 8,
2005, and an Intercreditor Agreement dated February 8, 2005. Funds were received
under the additional investment as of February 17, 2005.
Item 1.01 Entry into Material Definitive Agreement
Item 2.03 Creation of a Direct Financial Obligation
Item 3.02. Unregistered Sale of Equity Securities
On February 8, 2005, RCG Companies Incorporated (the "Company") closed an
initial private placement offering with eight accredited investors. Pursuant to
the terms of the Securities Purchase Agreement, the Company sold and the
purchasers purchased an aggregate of $7,968,700 of two year senior secured
convertible debentures (the "Debentures"). The Debentures are original issue
discounted notes, discounted to $6,294,391. If not converted earlier, the
Debentures are due on February 8, 2007. The initial conversion price of the
Debentures is $1.30 per share and the Debentures are not convertible into shares
of the Company's common stock until the shareholders of the Company have
approved the transaction pursuant to the rules of the American Stock Exchange.
The Company has a right to redeem the Debentures for cash any time after the
issuance date at 130% of the principal amount of the Debentures. The purchasers
are granted a senior security interest in the assets of the Company, subject to
carve outs for certain existing indebtedness.
In addition, the Company issued a total of 10,177,139 Warrants,
exercisable for the Company's common stock. 50% of the Warrants are exercisable
at $1.55 per share and the remaining 50% of the Warrants are exercisable at
$1.87 per share. The shares underlying the Warrants are not issuable for 180
days from the closing date of the offering. The Warrants have full ratchet
anti-dilution provisions, but only after the shareholders approve the issuance
in excess of 20% of the outstanding common stock of RCG to the purchasers of the
Debentures.
The Company has covenanted to hold a shareholders meeting to approve the
issuance in excess of 20% of its common stock no later than May 31, 2005. The
Company also covenanted to file a registration statement underlying the common
stock in both the Debentures and Warrants within 45 days of the closing date and
to make its reasonable best efforts to have such registration declared effective
at the earliest date. If the registration statement is not timely filed or
declared effective within 120 days following the closing, additional cash
payments equal to 1.5% per month shall be owed on the Debentures.
The Company paid a placement fee equal to 10% in cash of the aggregate
number of dollars raised and issued Warrants in substantially the same form as
issued to the purchasers in the amount of 50,000 Warrants for each $1 million
aggregate principal amount of dollars raised.
The proceeds of the offering will be used for an initial deposit on the
disclosed OneTravel, Inc. acquisition, marketing and general working capital.
The transaction was approved by the Company's Board of Directors on February 7,
2005. The securities will be issued pursuant to an exemption from registration
provided by Section 4(2) and Rule 506 of Regulation D of the Securities Act of
1933, as amended.
The securities offered have not been registered under the Securities Act
and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors,
Appointment of Principal Officers
On February 8, 2005, K. Wesley M. Jones, Sr. resigned as a member of the
Company's Board of Directors. Mr. Jones served on the nominating and corporate
governance committee and compensation committee. At the time of his resignation,
Mr. Jones cited time constraints for his resignation.
Item 9.01. Financial Statements and Exhibits
Exhibits
Exhibit Description
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4.1 Securities Purchase Agreement dated February 8, 2005 (2)
4.2 Form of Secured Convertible Debenture (2)
4.3 Security Agreement dated February 8, 2005 (2)
4.4 Form of Warrant (2)
4.5 Registration Rights Agreement dated February 8, 2005 (2)
4.6 Amendment No. 1 to Securities Purchase Agreement dated February 8,
2005 (1)
4.7 Intercreditor Agreement dated February 8, 2005 (1)
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(1) Filed herewith.
(2) Previously filed on Form 8-K on February 14, 2005.
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.
Dated: February 23, 2005
RCG COMPANIES INCORPORATED
By: /s/ Michael Pruitt
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Michael Pruitt
President