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)
January 26, 2004
SORRENTO NETWORKS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-15810 04-3757586
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
9990 Mesa Rim Road, San Diego, California 92121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (858) 558-3960
Item 5. - Other Events and Regulation FD Disclosure.
On January 26, 2004, Sorrento Networks Corporation (the "Company")
consummated the issuance of 2,921,512 newly-issued shares of the Company's
common stock, and warrants to purchase 1,460,755 newly-issued shares of the
Company's common stock, to a small number of institutional and other accredited
investors, resulting in approximately $10 million in gross proceeds to the
Company, prior to the exercise of the warrants. These proceeds are in addition
to the approximately $6.35 million raised in a private placement that closed on
December 31, 2003.
Investors received a warrant to purchase one share of common stock for
each two shares of common stock purchased; the effective price in the private
placement was $3.44 for each unit. Each unit consists of one share of common
stock and a warrant to purchase one-half of a share of common stock. The $3.44
per share purchase price was determined based on the fair market value of the
Company's common stock as of the date the investors became obligated to purchase
the shares by signing the securities purchase agreement on January 13, 2004,
determined in accordance with Nasdaq Marketplace Rules, using the average
closing bid price on the five days prior to the execution date of the securities
purchase agreement, plus an additional amount to take into account the value of
the warrant coverage. The warrants have an exercise period of five-years and an
exercise price of $3.44 per share. The warrants are exercisable in cash, and
they allow for cashless exercise, representing a potential $5 million in
additional proceeds, bringing the total gross proceeds of this offering to
approximately $15 million upon full exercise of the warrants, assuming the
warrants are fully-exercised.
None of the shares of common stock, the warrants sold to the investors,
nor the shares of common stock to be issued upon exercise of the warrants has
been registered under the Securities Act of 1933. Accordingly, these shares and
warrants may not be offered or re-sold in the United States, except pursuant to
an effective registration statement or an applicable exemption from the
registration requirements of the Securities Act. The Company has agreed to file
a registration statement covering resale by the investors of these shares and
shares of common stock issuable upon exercise of the warrants.
This announcement shall not constitute an offer to sell or the
solicitation of an offer to buy the common stock, warrants or common stock
issuable upon exercise of the warrants. The private placement was made by the
Company with a selling agent, and any opportunity to participate in the private
placement was available to a very limited group of institutional and other
accredited investors.
The foregoing description of the private placement does not purport to
be complete and is qualified in its entirety by reference to the form of
Securities Purchase Agreement, which is attached hereto as Exhibit 4.1 and
incorporated herein by reference, the form of Registration Rights Agreement,
which is attached hereto as Exhibit 4.2 and incorporated herein by reference,
and the form of Warrant, which is attached hereto as Exhibit 4.3 and
incorporated herein by reference. A copy of the press release announcing the
closing of the private placement is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 7. - Exhibits
(c) Exhibits.
Exhibit Number Description
4.1 Securities Purchase Agreement, dated
January 13, 2004, by and among
Sorrento Networks Corporation and the
investors a party thereto
4.2 Registration Rights Agreement, dated
January 13, 2004, by and among
Sorrento Networks Corporation and the
investors a party thereto
4.3 Form of Warrant issued pursuant to the
Securities Purchase Agreement, dated
January 13, 2004, by and among
Sorrento Networks Corporation and the
investors a party thereto
99.1 Press Release, dated January 26, 2004
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.
SORRENTO NETWORKS CORPORATION.
January 26, 2004 /s/ Joe R. Armstrong
-----------------------------------
Joe R. Armstrong,
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
4.1 Securities Purchase Agreement, dated
January 13, 2004, by and among
Sorrento Networks Corporation and the
investors a party thereto
4.2 Registration Rights Agreement, dated
January 13, 2004, by and among
Sorrento Networks Corporation and the
investors a party thereto
4.3 Form of Warrant issued pursuant to the
Securities Purchase Agreement, dated
January 13, 2004, by and among
Sorrento Networks Corporation and the
investors a party thereto
99.1 Press Release, dated January 26, 2004