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) May 7, 2004
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PARLEX CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
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(State or Other Jurisdiction of Incorporation)
0-12942 04-2464749
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(Commission File Number) (IRS Employer Identification No.)
One Parlex Place, Methuen, Massachusetts 01844
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(Address of Principal Executive Offices) (Zip Code)
(978) 685-4341
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(Registrant's Telephone Number, Including Area Code)
Item 5. OTHER EVENTS.
On May 7, 2004, Parlex Corporation completed an initial closing on its
private placement offering (the "Private Placement") of shares of its Series
A Convertible Preferred Stock (the "Preferred Stock") at $80.00 per share.
Investors in the Private Placement (the "Investors") purchased a total of
38,750 shares of Preferred Stock for an aggregate $3.1 million, and also
received accompanying warrants (the "Warrants") to purchase an aggregate of
193,750 shares of Parlex's common stock, $.10 par value per share (the
"Common Stock"). Each Investor also has an option to purchase, on or before
November 8, 2004, up to an additional 20% of the shares of Preferred Stock
originally purchased by such Investor.
The Preferred Stock may be converted in whole or in part at any time
by the Investors into shares of Common Stock at an initial conversion price
of $8.00 per share. In the event the trading price of Parlex Common Stock
exceeds 150% of the conversion price for 20 consecutive trading days, then
all outstanding shares of Preferred Stock shall be automatically converted
into Common Stock.
The Preferred Stock has a fixed dividend rate of 8.25% per annum,
payable quarterly, at Parlex's sole discretion, in either cash or shares of
Common Stock. On the third anniversary of the issuance date, Parlex may in
its sole discretion redeem all, but not less than all, of the then-
outstanding Preferred Stock. The redemption price shall be equal to the
initial purchase price of the Preferred Stock, subject to equitable
adjustments for stock splits or similar actions, plus all accrued and unpaid
dividends to the redemption date. Parlex must provide the Investors with
notice of its intent to redeem at least 30 days prior to the third
anniversary date. Following receipt of such notice, the Investors may elect
to convert their Preferred Stock into Common Stock prior to the redemption
date, provided that they perform such conversion within 20 days of receipt
of the redemption notice. If Parlex does not redeem the Preferred Stock on
the third anniversary date of the issuance date, the fixed dividend rate
shall thereafter be increased to 14%, and shall be payable solely in cash.
The Warrants are exercisable commencing November 8, 2004 at an initial
exercise price of $8.00, and expire on May 7, 2007.
The conversion price of the Preferred Stock and the exercise price of
the Warrants are subject to adjustment in the event of stock splits,
dividends and certain combinations. The Investors do not have any
redemption rights relating to the Preferred Stock. In addition, the
Investors' voting rights are limited to certain matters directly affecting
the Series A Preferred Stock.
The securities were offered and sold only to "accredited investors,"
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended (the "Securities Act").
Parlex has received net proceeds of approximately $2.8 million after
deducting the estimated expenses and commission in connection with the
Private Placement, including a cash payment to a placement agent. Parlex
has agreed to file a registration statement with the Securities and Exchange
Commission covering the resale from time to time of the shares of Common
Stock that may be issued as interest on the Preferred Stock, or upon the
conversion of the Preferred Shares or exercise of the Warrants.
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Copies of the documents governing these transactions are filed as
exhibits to this report and are incorporated in this report by reference.
The above description of the transactions are qualified in their entirety by
these documents.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
3.1 Certificate of Vote of Directors establishing Series A Convertible
Preferred Stock
4.1 Form of Stock and Warrant Purchase Agreement dated May 7, 2004
between Parlex Corporation and the Investors
4.2 Form of Warrant to Purchase Common Stock
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.
PARLEX CORPORATION
(Registrant)
By: /s/ Jonathan R. Kosheff
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Jonathan R. Kosheff
Chief Financial Officer
Dated: May 11, 2004
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