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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): November 3, 2004
FRANKLIN CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 811-05103 13-3419202
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
100 Wilshire Boulevard, 15th Floor, Suite 1500
Santa Monica, California 90401
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (310) 752-1416
Not Applicable
(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:
[ ] 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))
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Item 1.01 Entry into a Material Definitive Agreement
On November 3, 2004, Franklin Capital Corporation ("Franklin") entered into a
Subscription Agreement with several accredited investors led by Bodnar Capital
Management, LLC (the "Investors"), relating to the issuance and sale by Franklin
of shares of its common stock (the "Shares") and five-year warrants (the
"Warrants") to purchase additional shares of its common stock (the "Warrant
Shares") in one or more closings of a private placement (the "Private
Placement") exempt from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act").
Pursuant to the Subscription Agreement, Franklin may issue and sell to
accredited investors an aggregate of up to 625,000 Shares at a price per Share
of $8.00. Each investor that purchases Shares pursuant to the Subscription
Agreement will also receive a Warrant to purchase that number of Warrant Shares
equal to 50% of the number of Shares purchased by that investor at an exercise
price per Warrant Share equal to 110% of the closing price of Franklin's common
stock on the date of the issuance and sale of the Shares to such investor. Each
Warrant further specifies that Franklin may require the holder thereof to
exercise the Warrant in accordance with its terms in the event that the average
closing price of Franklin's common stock during any period of five consecutive
trading days exceeds 200% of the Warrant's exercise price per share. Pursuant to
the Subscription Agreement, Franklin has agreed to register for resale all of
the Shares and Warrant Shares issuable upon exercise of the Warrants issued and
sold to investors in connection with the Private Placement.
Item 3.02 Unregistered Sales of Equity Securities
In connection with the Private Placement, on November 3, 2004, Franklin issued
and sold to the Investors an aggregate of 405,625 Shares and Warrants to
purchase an aggregate of up to 202,810 Warrant Shares pursuant to the terms of
the Subscription Agreement. These issuances resulted in aggregate gross proceeds
to Franklin of $3,245,000, and no discount or commission was paid by Franklin in
connection with such issuances.
The foregoing issuances were made in reliance upon the exemption provided in
Section 4(2) of the Securities Act and the safe harbor of Rule 506 under
Regulation D promulgated under the Securities Act. No form of general
solicitation or general advertising was conducted in connection with the Private
Placement. Each of the Warrants and the certificates representing Shares and
Warrant Shares contain or will contain restrictive legends preventing the sale,
transfer or other disposition of such Shares, Warrant Shares or Warrants, unless
registered under the Securities Act, and each investor was informed by Franklin
of these restrictions prior to the issuance of the Shares and Warrants.
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Item 7.01 Regulation FD Disclosure
On November 4, 2004, Franklin issued a press release announcing the issuance and
sale of Shares and Warrants in connection with the Private Placement. A copy of
that press release is being furnished as Exhibit 99.1 to this current report on
Form 8-K.
The information in this Item 7.01 of this current report on Form 8-K, together
with the information in Exhibit 99.1, is being furnished and shall not be deemed
"filed" for the purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, or otherwise subject to the liabilities of that Section. Such
information shall not be deemed incorporated by reference into any registration
statement or other document filed with the SEC.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press release issued on November 4, 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.
FRANKLIN CAPITAL CORPORATION
By: /s/ Milton "Todd" Ault III
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Milton "Todd" Ault III
Chairman and Chief Executive Officer
Date: November 9, 2004
Index to Exhibits
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Exhibit No. Description of document
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99.1 Press release issued on November 4, 2004