Attached files
| file | filename |
|---|---|
| EX-3.1 - IndiePub Entertainment, Inc. | v167640_ex3-1.htm |
| EX-4.1 - IndiePub Entertainment, Inc. | v167640_ex4-1.htm |
| EX-3.2 - IndiePub Entertainment, Inc. | v167640_ex3-2.htm |
| EX-10.1 - IndiePub Entertainment, Inc. | v167640_ex10-1.htm |
| EX-10.3 - IndiePub Entertainment, Inc. | v167640_ex10-3.htm |
| EX-10.2 - IndiePub Entertainment, Inc. | v167640_ex10-2.htm |
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): November 20, 2009
ZOO
ENTERTAINMENT, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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333-124829
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71-1033391
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(State
or Other Jurisdiction
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(Commission
File Number)
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(I.R.S.
Employer
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of
Incorporation)
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Identification
No.)
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2121
Avenue of the Stars, Suite 2550
Los
Angeles, CA 90067
(Address
of principal executive
offices
including zip code)
(310)
601-2500
(Former
name or former address, if changed since last report)
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)
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| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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| o |
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.
Financing
On November 20, 2009, Zoo
Entertainment, Inc. (the “Company”) entered into a Securities Purchase Agreement
(the “Purchase Agreement”), with certain investors identified therein
(collectively, the “Investors”), pursuant to which the Company agreed to sell to
the Investors in a private offering an aggregate of up to 2,000,000 shares of
the Company’s Series A Convertible Preferred Stock, par value $0.001 per
share (the “Series A Preferred Shares”), at a price per share equal to $2.50,
for gross proceeds to the Company of up to $5,000,000 (the
“Financing”). On November 20, 2009, the Company sold Series A
Preferred Shares and Warrants (as defined below), that when converted and
exercised, will equal 1,689,606,000 shares of Common Stock (as defined below),
for gross proceeds to the Company of $4,224,015. Such amount includes an
aggregate $450,000 investment made by certain of the Company’s officers and
directors, which investment of at least $300,000 was a condition to the closing
of the Financing. The Purchase Agreement provides for subsequent
closings whereby the Company may issue additional Series A Preferred Shares to
one or more additional investors at any time and from time to time on or before
November 30, 2009. Each Series A Preferred Share shall automatically convert
into 1,000 shares of the Company’s common stock, par value $0.001 per share
(“Common Stock”), upon the effectiveness of the filing of an amendment to the
Company’s Certificate of Incorporation authorizing a sufficient number of shares
of Common Stock to permit the conversion of the Series A Preferred
Shares. The Series A Preferred Shares have such other terms and
conditions as set forth in the Certificate of Designation, Preferences and
Rights of Series A Convertible Preferred Stock, as described under Item 5.03 of
this Current Report on Form 8-K, which is incorporated herein by
reference.
In connection with the Financing, the
Company also issued to each of Focus Capital Partners, LLC and Socius Capital
Group, LLC, two of the lead Investors in the Financing (the “Lead Investors”), a
warrant (the “Warrants”) to purchase a certain number of shares of Common Stock
included as part of the 1,689,606,000 shares described
above. The Warrants have a five year term and an exercise price
of $0.01 per share. The Warrants contain customary limitations on the
amount of the Warrants that can be exercised. Additionally, the
Warrants provide that they cannot be exercised until the effectiveness of the
filing of an amendment to the Company’s Certificate of Incorporation authorizing
a sufficient number of shares of Common Stock to permit the exercise of the
Warrants. The foregoing description of the Warrants does not purport
to be complete and is qualified in its entirety by reference to the form of
Warrant, a copy of which is attached hereto as Exhibit 4.1 and which is
incorporated herein by reference.
The Company also entered into a
Registration Rights Agreement with the Lead Investors, pursuant to which the
Company agreed to register the resale of the shares of Common Stock issuable
upon conversion of the Series A Preferred Shares and exercise of the Warrants
that were issued to the Lead Investors (the “Registrable Securities”). The
Company is required to file a registration statement (the “Registration
Statement”) with the Securities and Exchange Commission (the “Commission”) no
later than December 5, 2009 (the “Filing Date”). The Company is obligated to use
its best efforts to cause the Registration Statement to be declared effective
under the Securities Act of 1933, as amended (the “Securities Act”), as soon as
possible, but in any event within 60 days of November 20, 2009 (“Closing Date”).
The Company is required to use its best efforts to keep the Registration
Statement effective under the Securities Act until the date when all Registrable
Securities have been sold, or can be sold without restrictions pursuant to Rule
144 promulgated under the Securities Act.
In the event that (a) the
Registration Statement is not filed on or before the Filing Date, (b) the
Registration Statement is not declared effective within 60 days of the Closing
Date, (c) the Registration Statement is not declared effective within 90
days from the Closing Date (and in such case the penalty will increase to 2% for
the following 30 days or until earlier declared effective), (d) the Registration
Statement is not declared effective within 120 days from the Closing Date (and
in such case the penalty will increase to 3% and will be and remain payable
until the Registration Statement is declared effective), (e) the Company fails
to file with the Commission a request for acceleration of a Registration
Statement within five trading days of the date that the Company is notified that
such Registration Statement will not be reviewed or will not be subject to
further review by the Commission or (f) the Company does not respond to comments
received from the Commission with respect to the Registration Statement as soon
as practicable and, in any event, within seven business days of receipt of such
comments (if such comments relate to accounting issues) and within five business
days of receipt of such comments (if such comments relate to any other issue),
then the Company is
required to pay to each Lead Investor an amount in cash equal to 1% of the
number of Registrable Securities held by such Lead Investor as of the date of
such event, multiplied by the purchase price paid by such Investor for such
Registrable Securities then held, on the date of such event and on every monthly
anniversary of such event until it is cured. Notwithstanding the
foregoing, penalties for any of the events under subsections (a) and (f) above,
shall be half a percent, and all penalties shall not exceed 1.5% for each of the
first two 30 day periods, 1% for the next 30 day period, or 3% for each of the
next three 30 day periods. The registration rights set forth in the
Registration Rights Agreement are also subject to customary cut-back provisions
pursuant to Rule 415 of the Securities Act.
Pursuant to the Purchase Agreement, one
of the Investors, David Smith, or his nominee, will be invited to join the
Company’s board of directors.
Except
with the prior written consent of the Company, the Company’s officers and
directors who made an aggregate $450,000 investment pursuant to the Purchase
Agreement, agreed not to sell, transfer, pledge or otherwise dispose of any
shares of Common Stock, or securities convertible into or exercisable or
exchangeable for Common Stock, owned by them for a period of 190 days from the
Closing Date.
Amendments to Existing
Notes
As a condition to the closing of the
Financing, on November 20, 2009, the Company entered into Amendment No. 6 to
Senior Secured Convertible Note (“Amendment No. 6”), with the requisite number
of holders (the “Holders”) of the Company’s senior secured convertible notes
issued in the aggregate principal amount of $11,150,000 (the
“Notes”). As previously disclosed, the Notes were issued pursuant to
that certain Note Purchase Agreement, dated as of July 7, 2008, as subsequently
amended on July 15, 2008, July 31, 2008 and August 12, 2008, pursuant to which
the Company consummated a financing to raise $9,000,000 through the sale of
Notes to certain Holders (the “First Convertible Note Financing”), and that
certain Note Purchase Agreement, dated as of September 26, 2008, pursuant to
which the Company consummated a second financing to raise $1,400,000 through the
sale of Notes to certain Holders (the “Second Convertible Note
Financing”). Additionally, on July 7, 2008, the Company issued a Note
to Trinad Capital Management, LLC in the principal amount of
$750,000.
Amendment No. 6 provides that the
principal balance and all accrued and unpaid interest underlying all of the
Notes shall automatically convert into shares of the Company’s Series B
Convertible Preferred Stock, par value $0.001 per share (“Series B Preferred
Shares”), at a rate of one Series B Preferred Share for every $10.00 of
principal plus accrued and unpaid interest underlying the Notes, following the
consummation of a sale of Series A Preferred Shares, provided that such sale
results in aggregate gross cash proceeds to the Company of at least $4,000,000,
and each Series A Preferred Share is initially convertible into 1,000 shares of
Common Stock. Additionally, pursuant to Amendment No. 6, the Company
and the Holders terminated that certain letter agreement, dated as of June 26,
2009, which provided for certain registration rights with respect to the shares
of Common Stock issuable upon conversion of the Notes. The foregoing
description of Amendment No. 6 does not purport to be complete and is qualified
in its entirety by reference to Amendment No. 6, a copy of which is attached
hereto as Exhibit 10.1 and which is incorporated herein by
reference.
On November 20, 2009, upon consummation
of the Financing, $11,884,390 of principal plus accrued and unpaid interest
underlying the Notes converted into an aggregate of 1,188,439 Series B Preferred
Shares, which, when converted, will represent 1,188,439,000 shares of Common
Stock. All outstanding rights with respect to the Notes were
terminated and all obligations of the Company under the Notes were discharged in
full. Each Series B Preferred Share shall automatically convert into
1,000 shares of Common Stock upon the effectiveness of the filing of an
amendment to the Company’s Certificate of Incorporation authorizing a sufficient
number of shares of Common Stock to permit the conversion of the Series B
Preferred Shares. The Series B Preferred Shares were issued on the
terms and conditions set forth in the Certificate of Designation, Preferences
and Rights of Series B Convertible Preferred Stock, as disclosed under Item 5.03
of this Current Report on Form 8-K, which is incorporated herein by
reference.
Except with the prior written consent
of the Company, certain of the Holders agreed not to sell, transfer, pledge or
otherwise dispose of any shares of Common Stock, or securities convertible into
or exercisable or exchangeable for Common Stock, owned by them for a period of
190 days from the Closing Date.
Amendments to Fee
Letters
On November 20, 2009, as a condition to
the consummation of the Financing, the Company entered into an Amendment No. 2
to Letter Agreement with each of Mark Seremet, the President, Chief Executive
Officer and a director of the Company, and David Rosenbaum, President of Zoo
Publishing, Inc. (the “Fee Letter Amendments”), which amended each of those
letter agreements, dated as of May 12, 2009, as amended on August 31, 2009,
pursuant to which, in consideration of each of Messrs. Seremet and Rosenbaum
entering into guarantees with each of Wells Fargo Bank, National Association in
connection with the Company’s purchase order financing, and Solutions 2 Go, Inc.
to guaranty the payment of all indebtedness of the Company and its affiliates in
connection with that certain Advance Agreement with Solutions 2 Go, Inc. and
Solutions 2 Go, LLC, the Company agreed to provide certain compensation to
Messrs. Seremet and Rosenbaum (the “Fee Letters”), as previously disclosed in
those Current Reports on Form 8-K filed with the Commission on May
18, 2009 and September 4, 2009. The Fee Letter Amendments provide
that the monthly compensation payable to each of Messrs. Seremet and Rosenbaum
shall terminate on November 30, 2010, and that the Company shall grant to each
of Messrs. Seremet and Rosenbaum an option to purchase (or restricted stock or
other incentives intended to comply with Section 409A of the Internal Revenue
Code) approximately 6.25% of the Company’s outstanding shares of common stock,
as soon as possible following the consummation of the Financing on such terms
and conditions as shall be determined by the board of directors of the
Company. If the Company’s board of directors determines that the
aforementioned issuance will be in the form of options, the options to acquire
such shares shall be based on a fully diluted current basis as adjusted for
stock splits, dividends, reorganizations and like events. The
foregoing description of the Fee Letter Amendments does not purport to be
complete and is qualified in its entirety by reference to the Fee Letter
Amendments, copies of which are attached hereto as Exhibits 10.2 and 10.3 and
which are incorporated herein by reference.
ITEM 1.02 TERMINATION OF A MATERIAL
DEFINITIVE AGREEMENT.
In connection with the conversion of
the Notes into 1,188,439 Series B Preferred Shares, as described under Item 1.01
of this Current Report on Form 8-K, which is incorporated by reference herein,
that certain Note Purchase Agreement, dated as of July 7, 2008, as amended,
entered into by and among the Company and certain Holders in connection with the
First Convertible Note Financing, and that certain Note Purchase Agreement,
dated as of September 26, 2008, entered into by and among the Company and
certain Holders in connection with the Second Convertible Note Financing, each
terminated in its entirety. The material terms of each Note Purchase
Agreement were disclosed in those Current Reports on Form 8-K filed with the
Commission on July 11, 2008, July 17, 2008, August 1, 2008, August 15, 2008 and
October 2, 2008, which are incorporated herein by reference. No
penalties were incurred in connection with the termination.
Additionally, in connection with the
conversion of the Notes, that certain Security Agreement, dated as of July 7,
2008, as amended, entered into by and among the Company and certain Holders in
connection with the First Convertible Note Financing, and that certain Security
Agreement, dated as of September 26, 2008, entered into by and among the Company
and certain Holders in connection with the Second Convertible Note Financing,
along with the security interests in all of the Company’s assets granted
thereunder to each of the Holders to secure the Company’s obligations under the
Notes, each terminated in its entirety. The material terms of each
Security Agreement were disclosed in those Current Reports on Form 8-K filed
with the Commission on July 11, 2008, August 15, 2008 and October 2, 2008, which
are incorporated herein by reference. No penalties were incurred in connection
with the termination.
ITEM 3.02 UNREGISTERED SALES OF
EQUITY SECURITIES.
The information contained in
Item 1.01 of this Current Report on Form 8-K with respect to the Series A
Preferred Shares, the Series B Preferred Shares and the Warrants is incorporated
herein by reference. The Series A Preferred Shares, the Series B Preferred
Shares and the Warrants were issued pursuant to Section 4(2) of the
Securities Act, and the rules and regulations promulgated thereunder, including
Rule 506 of Regulation D. A registration statement covering
the resale of the Registrable Securities issued to the Lead Investors will be
filed with the Commission, as described under Item 1.01 of this Current Report
on Form 8-K.
ITEM 5.03 AMENDMENTS TO ARTICLES OF
INCORPORATION OR BY-LAWS; CHANGE IN FISCAL YEAR.
On November 20, 2009 the Company filed
with the Secretary of State of the State of Delaware a Certificate of
Designation, Preferences and Rights of Series A Convertible Preferred Stock
(the “Series A Certificate of Designation”) designating 2,000,000 shares of its
authorized preferred stock, par value $0.001 per share, as Series A Convertible
Preferred Stock (the “Series A Preferred Stock”), and a Certificate of
Designation, Preferences and Rights of Series B Convertible Preferred Stock
(the “Series B Certificate of Designation”) designating 1,200,000 shares of its
authorized preferred stock, par value $0.001 per share, as Series B Convertible
Preferred Stock (the “Series B Preferred Stock”). The Series A Certificate of
Designation and the Series B Certificate of Designation were approved by the
Company’s Board of Directors on November 13, 2009.
Immediately upon the effectiveness of
the filing of an amendment to the Company’s Certificate of Incorporation
authorizing a sufficient number of shares of Common Stock to permit the
conversion of the shares of Series A Preferred Stock and Series B Preferred
Stock into shares of Common Stock (a) all issued and outstanding shares of
Series A Preferred Stock shall automatically convert into that number of shares
of Common Stock obtained by dividing the original purchase price of the shares
of such Series A Preferred Stock, which is $2.50 per share, plus the amount of
any accumulated but unpaid dividends as of the conversion date, by the
conversion price in effect at the close of business on the conversion date,
which is initially $0.0025 and (b) all issued and outstanding shares of Series B
Preferred Stock shall automatically convert into that number of shares of Common
Stock obtained by dividing the original purchase price of the shares of such
Series B Preferred Stock, which is $10 per share, plus the amount of any
accumulated but unpaid dividends as of the conversion date, by the conversion
price in effect at the close of business on the conversion date, which is
initially $0.01.
The holders of Series A Preferred
Stock and Series B Preferred Stock are entitled to vote together along with the
holders of the Common Stock and any other class or series of capital stock of
the Company entitled to vote together with the holders of the Common Stock as a
single class, on all matters submitted for a vote (or written consents in lieu
of a vote) of the holders of Common Stock, and are entitled to other voting
rights as set forth in the Company’s Certificate of Incorporation and the Series
A Certificate of Designation and Series B Certificate of Designation, as
applicable. On all matters as to which shares of Series A Preferred Stock,
Series B Preferred Stock or Common Stock are entitled to vote or consent, each
share of Series A Preferred Stock or Series B Preferred Stock, as
applicable, entitles its holder to the number of votes that the Common Stock
into which it is convertible would have if such Series A Preferred Stock or
Series B Preferred Stock, as applicable, had been so converted into Common
Stock.
Dividends on the Series A Preferred
Stock and Series B Preferred Stock are not mandatory, but if and when the
Company’s board of directors declares such dividends, they shall be payable pari
passu with one another, and in preference and priority to any payment of any
dividends on the Common Stock. After payment of any preferential
dividends to the holders of Series A Preferred Stock and Series B Preferred
Stock, if the Company’s board of directors declares a dividend on the Common
Stock, it shall also declare a dividend at such time on each share of Series A
Preferred Stock and Series B Preferred Stock.
In the event of any liquidation,
dissolution or winding up of the Company, or in the event of its insolvency, the
holders of the Series A Preferred Stock and the Series B Preferred Stock shall
be entitled, pari passu with distributions to the other, to have set apart for
them or to be paid out of the assets of the Company available for distribution
to stockholders (after provision for the payment of all debts and liabilities,
and before any distribution made to any holders of Common Stock or any class of
securities junior to the Series A Preferred Stock and the Series B Preferred
Stock), an amount equal to $2.50 per share with respect to the Series A
Preferred Stock and $10 per share with respect to the Series B Preferred
Stock.
The foregoing description of the Series
A Certificate of Designation and the Series B Certificate of Designation does
not purport to be complete, and is qualified in its entirety by reference to the
Series A Certificate of Designation and the Series B Certificate of Designation,
copies of which are attached hereto as Exhibits 3.1 and 3.2, respectively, and
incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d)
Exhibits
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Number
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Description
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3.1
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Certificate
of Designation, Preferences and Rights of Series A Convertible Preferred
Stock.
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3.2
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Certificate
of Designation, Preferences and Rights of Series B Convertible Preferred
Stock.
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4.1
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Form
of Warrant.
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10.1
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Amendment
No. 6 to Senior Secured Convertible Promissory Note, by and among Zoo
Entertainment, Inc. and the note holders set forth therein, dated as of
November 20, 2009.
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10.2
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Amendment
No. 2 to Letter Agreement, by and between Zoo Entertainment, Inc. and Mark
Seremet, dated as of November 20, 2009.
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10.3
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Amendment
No. 2 to Letter Agreement, by and between Zoo Entertainment, Inc. and
David Rosenbaum, dated as of November 20, 2009.
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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 hereunto
duly authorized.
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Date:
November 27, 2009
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ZOO
ENTERTAINMENT, INC.
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By:
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/s/ Mark
Seremet
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Name:
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Mark
Seremet
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Title:
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Chief Executive
Officer
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4770860v.6
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