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): June 16, 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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N/A
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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:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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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
June
17, 2008, the Company (as defined below) entered into an amendment agreement
with Longview Marquis Master Fund, L.P. (“Longview”)
(the
“Amendment
Agreement”)
whereby Longview agreed, for consideration in the amount of $50,000 (the
“Extension
Amount”),
payable in immediately available funds to extend the maturity date on that
certain senior secured promissory note, originally issued in favor of Longview
pursuant to that certain securities purchase agreement dated as of November
15,
2007 (originally filed with the Securities and Exchange Commission on Current
Report on Form 8-K dated November 20, 2007) and amended by that certain
amendment agreement dated May 30, 2008 (originally filed with the Securities
and
Exchange Commission on Current Report on Form 8-K dated June 2, 2008), from
June
13, 2008 until June 20, 2008. The Extension Amount may be credited against
the
outstanding principal balance in certain circumstances as described in the
Amendment 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 Sales of Equity Securities.
On
June
16, 2008, Customer Acquisition Network Holdings, Inc. (“Registrant”
or
the
"Company") sold
an aggregate of (i) 250,000 shares of its common stock, par value $0.001 per
share (the “Common
Stock”)
and
(ii) five-year warrants to purchase 125,000 shares of its common stock at an
exercise price of $2.50 per share (the “Warrants”),
pursuant to a Subscription Agreement with Stephen B. Wechsler (the
“Subscriber”). Registrant received aggregate gross proceeds of $500,000 from the
sale of the Common Stock and Warrants (collectively the “Securities”).
The
sale of the Securities by the Company is referred to herein as the “Offering.”
The Securities 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
Agreement
The
Subscription Agreement, attached hereto as
Exhibit 10.1,
and
herein incorporated by reference to this Current Report on Form 8-K provides
for
the purchase by the Subscriber and the sale by Registrant of the Securities.
The
Subscription Agreement contains representations and warranties of the Company
and the Subscriber that are typical for transactions of this type.
The
Subscription Agreement contains covenants on the part of the Company that are
typical for transactions of this type, including but not limited to the
following covenants:
Most
Favored Nation Protection
Until
such time as the Subscriber no longer holds any of the Securities, 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 (the “Common
Stock Equivalent”))
in
the Company’s next private placement, if the Subscriber reasonably believes that
any of the terms of the next private placement are more favorable as to the
terms granted under the Subscription Agreement, upon notice to the Company,
Registrant will amend the terms of the Subscription Agreement so as to give
the
Subscriber the benefit of the more favorable terms.
Price
Protection for Subsequent Equity Sales
Until
the
earlier of (i) June 16, 2010 (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 and shares of Common Stock underlying
the Warrants (the “Warrant
Stock”),
in
the event that the Company issues or sells any Common Stock or any Common Stock
Equivalent for which the shares of Common Stock may be acquired for less than
$2.00 per share, then the Company is obligated to issue an amount of
additional shares of Common Stock to the Subscriber, so that the actual price
paid per share when divided by the total number of shares issued will
result in an actual per share price paid by the Subscriber equal to such lower
price.
Indemnification
The Subscription
Agreement also obligates Registrant to indemnify the Subscriber for certain
losses resulting from (1) any misrepresentation or breach of any representation
or warranty made by the Company or (2) any breach of any covenant or agreement
of the Company to the Subscriber in connection with the sale of the
Securities.
Warrants
Price
Protection
Until
the
earlier of (i) June 16, 2010 or (ii) such date that there is an effective
registration statement on file with the Securities and Exchange Commission
covering the resale of any Warrant Stock, in the event that the Company issues
or sells any warrants or options to purchase shares of capital stock to which
they may be acquired at an exercise price of less than $2.50 per share, then
the
Company shall promptly issue additional warrants to the holder in an amount
sufficient that the actual price per warrant paid hereunder (which is $2.50)
(the “Per
Warrant Purchase Price”),
when
divided by the total number of warrants issued will result in an actual Per
Warrant Purchase Price paid by the holder hereunder equal to such lower price
(this is intended to be a “full ratchet” adjustment). Such adjustment shall be
made successively whenever such an issuance is made.
Maximum
Exercise
The
Warrants contain limitations on exercise, including the limitation that the
holder may not exercise its Warrants to the extent that upon exercise the
holder, together with its affiliates, would own in excess of 4.99% of the
Company’s outstanding shares of Common Stock (subject to an increase or
decrease, upon at least 61-days’ notice by the Warrant holder to the
Company, of up to 9.99%).
The
foregoing is not a complete summary of the terms of the transaction described
in
this Item 3.02, and reference is made to the complete text of the Subscription
Agreement and the form of Warrant attached hereto as Exhibits 10.1 and 10.2
respectively.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
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Exhibit
No.
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Description
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10.1
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Subscription
Agreement, dated as of June 16, 2008, between the Company and Stephen
B.
Wechsler.
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10.2
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Form
of Warrant
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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:
June 18, 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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Subscription
Agreement, dated as of June 16, 2008, between the Company and Stephen
B.
Wechsler.
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10.2
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Form
of Warrant
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