Unassociated Document
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 5, 2008
Customer
Acquisition Network Holdings, Inc.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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333-141141
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01-0692341
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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200
Park Avenue South
Suite
908-909
New
York, NY
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10003
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (954) 712-0000
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(Former
name or former address, if changed since last
report)
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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:
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
oPre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
oPre-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.
The
information set forth in Item 3.02 of this Current Report on Form 8-K that
relates to the entry into a material definitive agreement is incorporated by
reference into this Item 1.01.
Item
3.02 Unregistered Sale of Equity Securities.
Subscription
Agreements
On
April
30, 2008, Customer Acquisition Network Holdings, Inc. (the “Company”)
entered into a Subscription Agreement with JMB Capital, LLC (“JMB”),
pursuant to which the Company sold JMB (i) 50,000 shares of common stock and
(ii) a five-year warrant to purchase 25,000 shares of common stock at an
exercise price of $2.50 per share for aggregate gross proceeds of
$100,000.
On
May 5,
2008, the Company entered into a Subscription Agreement with Leon Frenkel,
pursuant to which the Company sold Mr. Frenkel (i) 150,000 shares of common
stock and (ii) a five-year warrant to purchase 75,000 shares of common stock
at
an exercise price of $2.50 per share for aggregate gross proceeds of
$300,000.
On
May 5,
2008, the Company entered into a Subscription Agreement with Triage Capital
Management L.P. (“Triage”),
pursuant to which the Company sold Triage (i) 50,000 shares of common stock
and
(ii) a five year warrant to purchase 25,000 shares of common stock at an
exercise price of $2.50 per share for aggregate gross proceeds of
$100,000.
On
May 5,
2008, the Company entered into a Subscription Agreement with Alla Pasternack,
pursuant to which the Company sold Mr. Pasternack (i) 25,000 shares of common
stock and (ii) a five year warrant to purchase 12,500 shares of common stock
at
an exercise price of $2.50 per share for aggregate gross proceeds of
$50,000.
Each
of
the foregoing Subscription Agreements provide for the following:
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The
Company shall use the proceeds from the sale of common stock and
warrants
for general working capital
purposes.
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Until
such time as any of the above listed subscribers do not hold any
of the
shares of common stock or warrants acquired pursuant to the Subscription
Agreements, in the event the Company issues or sells any common stock
(including, without limitation, any debt preferred stock, rights,
options,
warrants or other instrument that is at any time convertible into
or
exercisable or exchangeable for, or otherwise entitles the holder
thereof
to receive common stock (“Common Stock Equivalents”)) that a subscriber
reasonably believes were offered on terms more favorable to those
provided
in such subscriber’s Subscription Agreement, the Company will amend the
terms of such subscriber’s Subscription Agreement so as to give such
subscriber the benefit of the more favorable
terms.
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Until
the earlier of (i) 24 months from the date of each Subscription Agreement
or (ii) until the date that there is an effective registration statement
on file with the Securities and Exchange Commission covering the
resale of
the common stock issued and underlying the warrants issued, in the
event
that the Company issues or sells any common stock or any Common Stock
Equivalent whereby shares of common stock may be acquired for less
than
$2.00 per share, then the Company shall issue that number of additional
shares of common stock to the subscribers such that the actual price
paid
per share of common stock when divided by the total number of shares
issued will result in an actual per share paid by the subscriber
equal to
such lower price.
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The
Company shall indemnify the subscribers for certain losses resulting
from
(i) any misrepresentation or breach of any representation or warranty
made
by the Company or (ii) any breach of any covenant or agreement of
the
Company to the subscribers in connection with the sale of the common
stock
and warrants.
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The
foregoing common stock and warrants were offered solely to “accredited
investors” in reliance on the exemption from registration afforded by Rule 506
of Regulation D promulgated under Section 4(2) of the Securities Act of 1933,
as
amended.
Subscription
Warrants
Each
of
the warrants issued in connection with the foregoing Subscription Agreements
provide that the exercise price and number of shares issuable upon exercise
of
the warrants are subject to adjustments for stock splits, combinations or
similar events. In addition, until the earlier of (i) 24 months from the date of
such warrant or (ii) the date that there is an effective registration statement
on file with the Securities and Exchange Commission covering the resale of
the
shares of common stock underlying such warrant, in the event that the Company
issues or sells any warrant or options to purchase shares of capital stock
at a
price per share of less than $2.50, the Company shall issue such holder that
number of additional warrants that will result in the actual price per warrant
being reduced to such lower price.
The
Company is prohibited from effecting the exercise of these warrants to the
extent that as a result of such exercise the holder of the exercised warrants
beneficially owns more than 4.99% (or, if such limitation is waived by the
holder upon no less than 61 days prior notice to us, 9.99%) in the aggregate
of
the issued and outstanding shares of common stock calculated immediately after
giving effect to the issuance of shares of common stock upon the exercise of
the
warrants.
Should
the Company fail to register the resale of all of the common stock underlying
any of these warrants with the Securities and Exchange Commission within six
months following their respective issuance dates, the holders of such warrants
shall have the right to exercise such warrants by means of a cashless
exercise.
On
May 5,
2008, the Company entered into an Amendment Agreement with Alpha Capital Anstalt
(“Alpha”),
pursuant to which Alpha agreed to cancel that certain promissory note, issued
by
the Company to Alpha on November 30, 2007 in the principal sum of $611,000
in
exchange for (i) $305,500 shares of common stock and (ii) a five year warrant
to
purchase 152,750 shares of common stock at an exercise price of $2.50 per
share.
In
addition to the foregoing, the Amendment Agreement provides that, subject to
certain limitations, should the Company issue or sell any common stock or
securities convertible or exchangeable for common stock at a price per share
that is less than $2.50, the Company shall issue Alpha such number of additional
shares of Common Stock that will result in Alpha’s actual price paid per share
being reduced to such lower price.
The
warrant issued to Alpha in connection with the Amendment Agreement provides
that
the exercise price and number of shares issuable upon exercise of the warrant
is
subject to adjustments for stock splits, combinations or similar events. In
addition, until the 18th month anniversary from the date of issuance, in the
event that the Company issues or sells any warrant or options to purchase shares
of capital stock at a price per share of less than $2.50, then the exercise
price of the warrant shall be reduced to 125% of such lower price.
The
Company is prohibited from effecting the exercise of this warrant to the extent
that as a result of such exercise Alpha would beneficially own more than 4.99%
(or, if such limitation is waived by Alpha upon no less than 61 days prior
notice to us, 9.99%) in the aggregate of the issued and outstanding shares
of
common stock calculated immediately after giving effect to the issuance of
shares of common stock upon the exercise of the warrant.
Should
the Company fail to register the resale of all of the common stock underlying
this warrant with the Securities and Exchange Commission within six months
following its issuance date, then Alpha shall have the right to exercise such
warrant by means of a cashless exercise.
The
common stock and warrants issued pursuant to the Amendment Agreement were
offered solely to Alpha, an “accredited investor,” in reliance on the exemption
from registration afforded by Rule 506 of Regulation D promulgated under Section
4(2) of the Securities Act of 1933, as amended.
Price
Protection Issuances
On
April
5, 2008, the Company issued (i) 200,000 shares of common stock and (ii) a
five-year warrant to purchase 100,000 shares of common stock at an exercise
price of $2.75 per share to Whalehaven Capital Fund Limited (“Whalehaven”)
for
aggregate gross proceeds of $500,000. These shares were issued pursuant to
a
Subscription Agreement that provided that, subject to certain limitations,
should the Company issue or sell any common stock or securities convertible
or
exchangeable for common stock at a price per share less than $2.50, then the
Company shall issue Whalehaven such number of additional shares of Common Stock
that will result in Whalehaven’s actual price paid per share being reduced to
such lower price. In addition, the warrant issued to Whalehaven provided that,
subject to certain limitations, should the Company issue or sell any warrants
or
options to purchase shares of capital stock with an exercise or conversion
price
of less than $2.75 per share,
the
Company shall issue Whalehaven such number of additional warrants that will
result in Whalehaven’s actual price per warrant being reduced to such lower
price. As
the
Company sold common stock on April 30, 2008 for $2.00 per share and issued
warrants with an exercise price of $2.50 per share, as a result of the foregoing
provisions, on May 5, 2008 we issued Whalehaven 50,000 shares of common stock
and a five-year warrant to purchase 10,000 shares of common stock at an exercise
price of $2.50 per share.
On
April
5, 2008, the Company issued (i) 100,000 shares of common stock and (ii) a
five-year warrant to purchase 50,000 shares of common stock at an exercise
price
of $2.75 per share to Chestnut Ridge Capital LLC (“Chestnut”)
for
aggregate gross proceeds of $250,000. These shares were issued pursuant to
a
Subscription Agreement that provided that, subject to certain limitations,
should the Company issue or sell any common stock or securities convertible
or
exchangeable for common stock at a price per share less than $2.50 per share,
then the Company shall issue Chestnut such number of additional shares of Common
Stock that will result in Chestnut’s actual price paid per share being reduced
to such lower price. In addition, the warrant issued to Chestnut provided that,
subject to certain limitations, should the Company issue or sell any warrants
or
options to purchase shares of capital stock with an exercise or conversion
price
of less than $2.75 per share, the Company shall issue Chestnut such number
of
additional warrants that will result in Chestnut’s actual price per warrant
being reduced to such lower price. As the Company sold common stock on April
30,
2008 for $2.00 per share and issued warrants with an exercise price of $2.50
per
share, as a result of the foregoing provisions, on May 5, 2008 we issued
Chestnut 25,000 shares of common stock and a five-year warrant to purchase
5,000
shares of common stock at an exercise price of $2.50 per
share.
The
common stock and warrants issued as a result of the above described price
protection provisions were offered solely to Whalehaven and Chestnut, each
of
which is an “accredited investor,” in reliance on the exemption from
registration afforded by Rule 506 of Regulation D promulgated under Section
4(2)
of the Securities Act of 1933, as amended.
The
foregoing is not a complete summary of the terms of the offering described
in
this Item 3.02, and reference is made to the complete text of the Amendment
Agreement, Form of Subscription Agreement, Form of Alpha Warrant and Form of
Subscriber Warrant attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4,
respectively.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
May 6,
2008, Devon Cohen, the Chief Operating Officer (“COO”) of the Company was
terminated from his position as COO, effective immediately.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
The
exhibits listed in the following Exhibit Index were filed as exhibits to the
Form 8-K.
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Exhibit
No.
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Description
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10.1
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Amendment
Agreement, dated as of May 5, 2008, between the Company and Alpha
Capital
Anstalt.
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10.2
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Form
of Subscription Agreement
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10.3
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Alpha
Warrant
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10.4
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Form
of Warrant for Subscribers
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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 thereunto
duly authorized.
Date:
May
7, 2008
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Customer Acquisition Network
Holdings,
Inc. |
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By: |
/s/ Michael
D. Mathews |
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Michael
D. Mathews |
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Chief
Executive Officer |
EXHIBIT
INDEX
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Exhibit
No.
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Description
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10.1
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Amendment
Agreement, dated as of May 5, 2008, between the Company and Alpha
Capital
Anstalt.
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10.2
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Form
of Subscription Agreement
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10.3
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Alpha
Warrant
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10.4
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Form
of Warrant for Subscribers
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