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): December 28, 2005
Roaming Messenger, Inc.
(Exact name of registrant as specified in its charter)
Nevada 0-13215 30-0050402
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
50 Castilian Dr. Suite A, Santa Barbara, California 93117
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code (805) 683-7626
Copies to:
Greg Sichenzia, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
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))
Item 1.01 Entry into a Material Definitive Agreement.
On December 28, 2005, Roaming Messenger, Inc. (the "Company") consummated a
Securities Purchase Agreement (the "Purchase Agreement") dated December 28, 2005
with Cornell Capital Partners L.P. ("Cornell") providing for the sale by the
Company to Cornell of its 10% secured convertible debentures in the aggregate
principal amount of $1,200,000 (the "Debentures") of which $400,000 was advanced
immediately. The second installment of $350,000 will be advanced two business
days prior to the filing by the Company with the Securities and Exchange
Commission (the "Commissions") of the Registration Statement (as defined below).
The last installment of $450,000 will be advanced two business days prior to the
date the Registration Statement is declared effective by the Commission.
The Debentures mature on the third anniversary of the date of issuance (the
"Maturity Date") and the Company is not required to make any payments until the
Maturity Date.
Holders (the "Holders") of the Debentures may convert at any time amounts
outstanding under the Debentures into shares of Common Stock of the Company (the
"Common Stock") at a conversion price per share equal to the lesser of (i) $0.15
or (ii) eighty percent (80%) of the lowest Volume Weighted Average Price of the
Common Stock during the five (5) trading days immediately preceding the
Conversion Date as quoted by Bloomberg, LP. Cornell has agreed not to short any
of the shares of Common Stock.
The Company has the right to redeem a portion or all amounts outstanding under
the Debenture prior to the Maturity Date at a 20% redemption premium provided
that the closing bid price of the Common Stock is less than $0.15. In addition,
in the event of a redemption, the Company is required to issue to Cornell 50,000
shares of Common Stock for each $100,000 redeemed.
Under the Purchase Agreement, the Company also issued to Cornell five-year
warrants to purchase 1,500,000, 4,000,000 and 4,000,000 shares of Common Stock
at $0.08, $0.10 and $0.12, respectively (collectively, the "Warrants").
In connection with the Purchase Agreement, the Company also entered into a
registration rights agreement with Cornell (the "Registration Rights Agreement")
providing for the filing of a registration statement (the "Registration
Statement") with the Securities and Exchange Commission registering the Common
Stock issuable upon conversion of the Debentures and exercise of the Warrants.
The Company is obligated to use its best efforts to cause the Registration
Statement to be declared effective no later than April 27, 2006 and to insure
that the registration statement remains in effect until all of the shares of
common stock issuable upon conversion of the Debentures and exercise of the
Warrants have been sold. In the event of a default of its obligations under the
Registration Rights Agreement, including its agreement to file the Registration
Statement with the Securities and Exchange Commission no later than January 27,
2006, or if the Registration Statement is not declared effective by April 27,
2006, it is required to pay to Cornell, as liquidated damages, for each month
that the registration statement has not been filed or declared effective, as the
case may be, either a cash amount or shares of our common stock equal to 2% of
the liquidated value of the Debentures.
The Company's obligations under the Purchase Agreement are secured by
substantially all of the Company's assets. As further security for the Company's
obligations thereunder, Jon Lei, the Company's Chief Executive Officer, has
granted a security interest in 2,000,000 shares of Common Stock that he owns.
Item 1.02 Termination of a Material Definitive Agreement.
On December 28, 2005, the Company terminated the Periodic Equity Investment
Agreement dated March 28, 2005 with Wings Fund, Inc. ("Wings"). That agreement
provided for the sale to Wings of up to $3,000,000 worth of Common Stock at the
Company's discretion in twelve monthly increments of up to $250,000 commencing
in September 2005. To date, the Company has sold approximately 4,279,174 shares
of Common Stock for total proceeds of $272,147.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
See Item 1.01 for a description of a secured loan obligation by the Company.
Item 3.02 Unregistered Sales of Equity Securities.
See Item 1.01 above for a description of the transactions pursuant to which the
Company issued Debentures and Warrants. All securities were issued pursuant to
Rule 506 of Regulation D promulgated under the Securities Act of 1933, as
amended (the "Act"), and/or Section 4(2) of the Act.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit
Number Description
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4.1 Convertible Debenture dated December 28, 2005
4.2 Form of $0.08 Warrant
4.3 Form of $0.10 Warrant
4.4 Form of $0.12 Warrant
10.1 Securities Purchase Agreement dated December 28, 2005 between the
Company and Cornell
10.2 Investor Registration Rights Agreement dated December 28, 2005
10.3 Insider Pledge and Escrow Agreement dated December 28, 2005 by and
among the Company, Cornell and David Gonzalez as escrow agent
10.4 Security Agreement dated December 28, 2005 by and between the
Company and Cornell
10.5 Escrow Agreement Dated December 28, 2005 by and among the Company.
Cornell and David Gonzalez, as Escrow Agent
10.6 Irrevocable Transfer Agent Instructions
99.1 Press Release
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.
Roaming Messenger, Inc.
By: /s/ Jon Lei
-------------------------------------
Chief Executive Officer
Date: December 29, 2005