MysoglandSECURITIES 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 3, 2005
WARP TECHNOLOGY HOLDINGS, INC.
------------------------------
(Exact Name of Registrant as Specified in Charter)
Nevada 000-33197 88-0467845
---------------------- ---------------------- ----------------------
(State of (Commission File No.) (I.R.S.
Incorporation) Employer
Identification
Number)
151 Railroad Avenue, Greenwich, Connecticut 06830
-------------------------------------------------
(Address of Principal Executive Offices)
(203) 422-2950
--------------
(Registrant's Telephone Number, including area code)
--------------------------------------------------------------------------------
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))
--------------------------------------------------------------------------------
Section 1 - Registrant's Business and Operations
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
As previously reported, Warp Technology Holdings, Inc. ("Warp" or the "Company")
has entered into that certain Purchase Agreement Assignment and Assumption (the
"Assignment"), as of October 13, 2004, by and between ISIS Capital Management,
LLC ("ISIS") and the Company. Under the Assignment, Warp acquired all of the
rights and assumed all of the liabilities of the Purchaser under that certain
Membership Interest Purchase Agreement (as amended by the Extension, the
"Purchase Agreement") made and entered into as of September 2, 2004, by and
between ISIS Capital Management, LLC (as the "Purchaser") and Gupta Holdings,
LLC (the "Seller"). The Purchase Agreement was amended by that certain Extension
Agreement (the "Extension"), by and between ISIS and the Seller, dated as of
September 27, 2004, which was amended by that certain Amendment No. 1 To
Extension Agreement made by and between ISIS and the Seller, as of the 13th day
of October, 2004, and which was further amended by that certain Amendment No. 2
To Extension Agreement made by and between Warp and the Seller, as of December
8, 2004 (together, as amended, the "Extension").
Pursuant to the Extension, the Closing under the Purchase Agreement had been
extended to January 3, 2005. In order to further extend the Closing date until
January 20, 2005, Warp and the Seller have entered into that certain Amendment
No. 3 to Extension Agreement, by and between the Company and the Seller (the
"Amendment No. 3"), and pursuant thereto, the Company has paid to the Seller a
payment of $250,000. Such payment reduces the purchase price to be paid at the
Closing, but is non-refundable.
Item 3.02 Unregistered Sales of Equity Securities
In exchange for loans in the aggregate principal amount of $250,000, the
proceeds of which were used to fund the payment made on January 3, 2005 to the
Seller as described above under Item 1, the Company sold certain Convertible
Notes in the aggregate principal amount of $250,000 (the "Convertible Notes").
This sale of securities was made in reliance upon the exemption from the
registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), set forth in Sections 4(2) thereof and the rules and
regulations under the Securities Act, including Regulation D, as transactions by
an issuer not involving any public offering and/or sales to a limited number of
purchasers who were acquiring such securities for their own account for
investment purposes and not with a view to the resale or distribution thereof.
The Convertible Notes have the following material terms:
Security. The Convertible Notes, along with the notes previously issued by
the Company to fund payments to the Seller, are secured by a first priority
security interest in the assets of the Company.
Interest. Interest accrues at the rate of rate of 12% per annum, payable
quarterly in arrears.
Maturity. The Convertible Notes mature on the fifth anniversary of their
issuance.
Prepayment. The Company may prepay the Convertible Notes at any time.
Mandatory Conversion. Contemporaneously with the closing of the Purchase
Agreement, the Convertible Notes shall be automatically converted into senior
convertible preferred stock (the "Senior Equity") issued by the Company in
connection with the financing of the Gupta acquisition. Upon such mandatory
conversion, the holder of the note will receive that number of shares of Senior
Equity equivalent to (i) the sum of (x) 1.3 multiplied by the amount of the
principal under the note, plus (y) any accrued but unpaid interest under the
note, divided by (ii) the purchase price payable of the Senior Equity. In
addition, the holder shall also be entitled to receive a proportionate amount of
any other securities issued in such Senior Equity financing, such as warrants,
as well as all other applicable securities, certificates and documentation. As
of the date of such conversion all principal and accrued but unpaid interest
under the notes shall be converted.
Optional Conversion. In the event that the closing of the Purchase
Agreement does not occur by the closing date thereunder ("Drop Date"), the note
holder shall have the right at any time thereafter, at its sole option, to
convert the note into i) any existing class of equity security of the Company,
or ii) any other instrument or instruments issued by the Company in connection
with any later capital raising activities of the Company.
Acceleration. In the event that closing of the Purchase Agreement does not
occur by the Drop Date, the holders of the Convertible Notes may elect to
accelerate all amounts due thereunder.
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.
Dated: January 7, 2005
Warp Technology Holdings, Inc.
By: /s/ Ernest C. Mysogland
------------------------------
Name: Ernest C. Mysogland
Title: Executive Vice President,
Chief Legal Officer and Secretary