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
June
1, 2006 (May 25, 2006)
Date
of
Report (Date of earliest event reported)
INNOFONE.COM,
INCORPORATED
(Exact
name of registrant as specified in its charter)
|
Nevada
|
0-31949
|
98-0202313
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File No.)
|
(IRS
Employer
Identification
No.)
|
1431
Ocean Ave., Suite 1100
Santa
Monica, CA 90401
(Address
of principal executive offices, including zip code)
Registrant's
telephone number, including area code: (310)
458-3233
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Statements
in this Current Report on Form 8-K (including the exhibit) that are not purely
historical facts, including statements regarding Innofone's beliefs,
expectations, intentions or strategies for the future, may be "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995. All
forward-looking statements involve a number of risks and uncertainties that
could cause actual results to differ materially from the plans, intentions
and
expectations reflected in or suggested by the forward-looking statements. Such
risks and uncertainties include, among others, introduction of products in
a
timely fashion, market acceptance of new products, cost increases, fluctuations
in and obsolescence of inventory, price and product competition, availability
of
labor and materials, development of new third-party products and techniques
that
render Innofone’s products obsolete, delays in obtaining regulatory approvals,
potential product recalls and litigation. Risk factors, cautionary statements
and other conditions which could cause Innofone's actual results to differ
from
management's current expectations are contained in Innofone's filings with
the
Securities and Exchange Commission. Innofone undertakes no obligation to update
any forward-looking statement to reflect events or circumstances that may arise
after the date of this filing.
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On
May
25, 2006, Innofone.com, Incorporated (“Innofone” or the “Company”) entered into
a Letter Agreement (“Agreement”) with the NIR Group for the repayment (the
“Repayment”) of those certain notes (“Notes”) and cancellation of those certain
warrants (“Warrants”) issued on or about August 31, 2005 and October 31, 2005
pursuant to
that
certain Securities Purchase Agreement (the “SPA”) by and between the Company and
AJW Partners, LLC (“Partners”), New Millennium Capital Partners, II, LLC
(“Millennium”), AJW Offshore, Ltd. (“Offshore”) and AJW Qualified Partners, LLC
(“Qualified, with Partners, Millennium and Offshore, collectively, the “NIR
Group”). As described herein, the Repayment was applied to the outstanding
principal and interest owing under the Notes and as consideration for the
cancellation of the Warrants issued to the NIR Group, and the termination of
any
and all UCC-1s filed in favor of NIR. Further, in connection with the SPA,
Notes
and Warrants, the following ancillary documents were executed and/or filed:
(1)
Guaranty and Pledge Agreement, dated August 31, 2005, by and between the
Company, Mr. Alex Lightman, the Company’s President and Chief Executive Officer,
and NIR (“Pledge Agreement”); (2) Security Agreement by and between the Company
and NIR, dated August 31, 2005 (“Security Agreement”); and (3) UCC-1 Financing
Statements (“UCC-1s”) filed by NIR in Nevada (the Notes, SPA, Warrants, Pledge
Agreement and Security Agreement are referred to collectively as “Original
Documents”).
In
connection with the Repayment, the Company and NIR executed and delivered the
Agreement, a new promissory note (the “New Notes”), a new stock purchase warrant
(the “New Warrants”), and a new registration rights agreement (“New Registration
Agreement”) (the Agreement, New Notes, New Warrants and New Registration
Agreement and the UCC-3s shall be referred to collectively as the “New
Documents”, each of which is filed herewith as an Exhibit). Further, NIR is
required to file UCC-3 Termination Statements (“UCC-3s”) necessary to terminate
any perfected security interest they had obtained pursuant to the Security
Agreement.
The
terms
of the Repayment, as provided in the Agreement are as follows: (a) upon signing
of Agreement, the Company made a cash Payment to NIR in the amount of $2,635,400
to be applied to the repayment of all amounts of principal and interest owing
and outstanding under the Notes; (b) upon signing of the Agreement, the Company
issued to NIR the New Notes in the aggregate amount of $1,200,000. The New
Notes
are self-amortizing over a one-year time period commencing on July 1, 2006,
with
each installment payment due on the twelve consecutive monthly anniversaries
beginning July 1, 2006. Further, pursuant to the New Notes, the Company will
pay
to NIR an aggregate of $100,000 per month. The New Notes may be prepaid by
the
Company at anytime without penalty; (c) upon signing of the Agreement, the
Company shall issued to NIR the New Warrants exercisable into an aggregate
of
750,000 shares of the Company’s Common Stock (the “Warrant Shares”); the New
Warrants. The New Warrants shall have a term of five years and an exercise
price
equal to $1.79. The New Warrants may be exercised on a cashless basis only
in
the event that there is no effective registration statement covering the Warrant
Shares. NIR may exercise the New Warrants by utilizing any amounts still owing
under the New Notes. The Company may buy back all of the New Warrants from
NIR
for an aggregate of $100,000 at any time prior to the New Warrants being
exercised; (d) upon signing of the Agreement, the Company and NIR executed
and
delivered the New Registration Agreement providing for the registration of
the
Warrant Shares with the Securities and Exchange Commission. The New Registration
Agreement provides for one piggyback registration right no sooner than six
months from the date of hereof; (e) NIR
agrees not to sell the Company's Common Stock short, either directly or
indirectly through its affiliates, principals or advisors; (f) the
Original Documents were terminated in all respects, and were rendered null
and
void and no longer binding NIR or the Company to any obligations, duties and
responsibilities contained therein. Further, NIR and the Company mutually agree
that the New Documents shall supersede the Original Documents in all respects;
(g) the
Company filed a Form AW to withdraw the Registration Statement on Form SB-2
currently on file with the Securities and Exchange Commission covering the
shares of common stock underlying the Notes and the Warrants; (h) All security
interests perfected by NIR on the “Collateral” (as defined in the Security
Agreement), pursuant to the Original Documents, including the Security
Agreement, shall be terminated. Accordingly, NIR agreed to file within (2)
days
of the Agreement, UCC-3 Termination Statement.
Separately,
the Company entered into a term sheet with Mr. Lawrence Hughes providing for
an
investment by Mr. Hughes in the aggregate amount of $4,000,000 in exchange
for
approximately 3,478,260 shares of the Company’s restricted common stock at $1.15
per share. Further, pursuant to the term sheet, the Company is to issue a
warrant to purchase 400,000 shares of the Company’s restricted common stock at
an exercise price equal to eighty percent (80%) of the five (5) day trading
average close price of the Company’s common stock.
A
copy of
the Term Sheet is filed herewith as Exhibit 10.5. Copies of the definitive
agreements will be filed by amendment upon execution.
We
claim
an exemption from the registration requirements of the Securities Act of 1933,
as amended (the “Act”) for the private placement of these securities pursuant to
Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder
since, among other things, the transaction did not involve a public offering,
the Investor was an “accredited investor” and/or qualified institutional buyers,
the Investor had access to information about the Company and its investment,
the
Investor took the securities for investment and not resale, and we took
appropriate measures to restrict the transfer of the securities.
ITEM
1.02 TERMINATION OF MATERIAL DEFINITIVE AGREEMENT.
See
Item
1.01 above.
ITEM
2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION.
ITEM
3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
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
|
|
|
|
|
10.1*
|
Letter
Agreement, dated as of May 25, 2006, by and between Innofone.com,
Incorporated and the NIR Group.
|
|
10.2*
|
Form
of Note issued by Innofone.com, Incorporated, dated May 25,
2006
|
|
10.3*
|
Form
of Warrant issued by Innofone.com, Incorporated, dated May 25,
2006
|
|
10.4*
|
Registration
Rights Agreement, dated May 25, 2006, by and between Innofone.com,
Incorporated and the NIR Group
|
|
10.5*
|
Term
Sheet between Innofone.com, Incorporated and Lawrence Hughes, dated
April
29, 2006
|
*
Filed
herewith
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this Current Report on Form 8-K to be signed on
its
behalf by the undersigned thereunto duly authorized.
| |
|
|
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INNOFONE.COM,
INCORPORATED
|
|
|
|
By:
|
|
/s/
Alex Lightman
Chief
Executive Officer and President
|
June
1,
2006
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
|
|
|
|
|
10.1*
|
Letter
Agreement, dated as of May 25, 2006, by and between Innofone.com,
Incorporated and the NIR Group.
|
|
10.2*
|
Form
of Note issued by Innofone.com, Incorporated, dated May 25,
2006
|
|
10.3*
|
Form
of Warrant issued by Innofone.com, Incorporated, dated May 25,
2006
|
|
10.4*
|
Registration
Rights Agreement, dated May 25, 2006, by and between Innofone.com,
Incorporated and the NIR Group
|
|
10.5*
|
Term
Sheet between Innofone.com, Incorporated and Lawrence Hughes, dated
April
29, 2006
|