Attached files
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): December 9,
2009
Commission
File Number: 0-21092
OCTuS
Inc.
(Exact
name of registrant as specified in its charter)
Nevada
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33-0013439
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(State
of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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803
Second Street, Suite 303, Davis CA 95616
(Address
of principal executive offices) (Zip Code)
(530)
564-0200
(Registrant's
Telephone Number, Including Area Code)
(Former
name and 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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CF1R
240.14a-12)
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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))
Entry
into a Material Definitive Agreement, Unregistered Sale of Equity
Securities
Item
1.01. Entry into a Material Definitive Agreement.
On
December 6, 2009, we entered into a Reserve Equity Financing Agreement ("REF")
with AGS Capital Group, LLC ("AGS"), pursuant to which AGS committed to
purchase, from time to time over a period of two years, shares of our common
stock for cash consideration up to $5,000,000, subject to certain conditions and
limitations. In connection with the REF, we also entered into a registration
rights agreement with AGS, dated December 6, 2009.
The
following is a summary of the REF and the registration rights agreement, is not
complete, and is qualified in its entirety by reference to the full text of
those agreements, each of which are attached as an exhibit to this Current
Report on Form 8-K. Readers should review those agreements for a complete
understanding of the terms and conditions associated with this financing. The
provisions of the REF and registration rights agreement, including without
limitation the representations and warranties contained therein, are not
intended as documents for investors and the public to obtain factual information
about the current state of affairs of the parties to those documents and
agreements. Rather, investors and the public should look to other disclosures
contained in the Company's reports under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
Reserve
Equity Financing Agreement
For a
period of 24 months from the effectiveness of a registration statement filed
pursuant to the registration rights agreement (the "Registration Statement"), we
may, from time to time, at our discretion, and subject to certain conditions
that we must satisfy, draw down funds under the REF by selling shares of our
common stock to AGS. The purchase price of these shares will be 92% of the
"VWAP" of the common stock during the five consecutive trading days after we
give AGS a notice of an advance of funds (an "Advance") under the REF (the
"Pricing Period"). "VWAP" generally means, as of any date, the daily dollar
volume weighted average price of our common stock as reported by Bloomberg, L.P.
or comparable financial news service. The amount of an Advance will
automatically be reduced by 50% if on any day during the Pricing Period, the
VWAP for that day does not meet or exceed 85% of the VWAP for the five trading
days prior to the notice of Advance (the "Floor Price"). We also will issue
unregistered shares of our common stock to AGS equaling 10% of the shares issued
in each Advance. The REF does not prohibit the Company from raising
additional debt or equity financings, other than financings similar to the
REF.
Our
ability to require AGS to purchase our common stock is subject to various
limitations. The maximum amount of each Advance is 50% of the average daily
trading volume for the five days immediately preceding the notice of Advance, as
reported by Bloomberg or comparable financial news service (the "Maximum Advance
Amount"). In addition, unless AGS agrees otherwise, a minimum of five calendar
days must elapse between each notice of Advance.
In
addition, before AGS is obligated to buy any shares of our common stock pursuant
to a notice of Advance, the following conditions, none of which is in AGS's
control, must be met:
� The Company shall
have filed with the SEC a Registration Statement with respect to the resale of
the shares of common stock issued to AGS in accordance with and subject to the
terms of the registration rights agreement.
� The Company shall
have obtained all permits and qualifications required by any applicable state in
accordance with the registration rights agreement for the offer and sale of the
shares of common stock, or shall have the availability of exemptions therefrom.
The sale and issuance of the shares of common stock shall be legally permitted
by all laws and regulations to which the Company is subject.
� There shall not
be any fundamental changes to the information set forth in the Registration
Statement which are not already reflected in a post-effective amendment to the
Registration Statement.
� The Company shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the REF agreement and the
registration rights agreement to be performed, satisfied or complied with by the
Company.
� No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority
of competent jurisdiction that prohibits the consummation of or which would
materially modify or delay any of the transactions contemplated by the REF
agreement, and no proceeding shall have been commenced that may have the effect
of prohibiting the consummation of or materially modify or delay any of the
transactions contemplated by the REF Agreement.
� The common stock
is trading on a principal market (as defined in the REF, and including the OTC
Bulletin Board). The trading of the common stock is not suspended by the SEC or
the principal market. The issuance of shares of common stock with respect to the
applicable closing will not violate the shareholder approval requirements of the
principal market. The Company shall not have received any notice threatening the
continued quotation of the common stock on the principal market and the Company
shall have no knowledge of any event that would be more likely than not to have
the effect of causing the common stock to not be trading or quoted on a
principal market.
� The amount of an
Advance shall not exceed the Maximum Advance Amount. In no event shall the
number of shares issuable to AGS pursuant to an Advance cause the aggregate
number of shares of common stock beneficially owned by AGS and its affiliates to
exceed 9.99% of the then outstanding shares of common stock of the Company
("Ownership Limitation"). Any portion of an Advance that would cause AGS exceed
the Ownership Limitation shall automatically be withdrawn. For the purposes of
this provision, beneficial ownership is calculated in accordance with Section
13(d) of the Exchange Act.
� The Company has
no knowledge of any event which would be more likely than not to have the effect
of causing such Registration Statement to be suspended or otherwise ineffective
at Closing.
� AGS shall have
received an Advance notice executed by an officer of the Company and the
representations contained in such Advance notice shall be true and correct.
There is
no guarantee that we will be able to meet the foregoing conditions or any other
conditions under the REF agreement or that we will be able to draw down any
portion of the amounts available under the REF.
There is
no contractual limit to the number of shares that we may be required to issue to
obtain funds from the REF as it is dependent upon our share price, which varies
from day to day. If we draw down amounts under the REF when our share price is
decreasing, we will need to issue more shares to raise the same amount than if
our stock price was higher. This could cause downward pressure on the price of
our common stock.
The REF
contains representations and warranties of the Company and AGS that are typical
for transactions of this type. AGS agreed that during the term of the REF,
neither AGS nor any of its affiliates, nor any entity managed or controlled by
it, will, or cause or assist any person to, enter into or execute any short sale
of any shares of our common stock as defined in Regulation SHO promulgated under
the Exchange Act. The representations and warranties made by the Company in the
REF are qualified by reference to certain exceptions contained in disclosure
schedules delivered to AGS. The REF also contains a variety of covenants on the
part of the Company which are typical for transactions of this type, as well as
the obligation, without the prior written consent of AGS, not to enter into any
other equity line of credit agreement with a third party during the term of the
REF.
The REF
obligates the Company to indemnify AGS for certain losses resulting from a
misrepresentation or breach of any representation or warranty made by the
Company or breach of any obligation of the Company. AGS also indemnifies the
Company for similar matters.
The
Company paid no fees, and is not obligated to pay any fees in the future, in
connection with the REF, other than a due diligence fee of $10,000, which will
be paid at the date of the first draw.
The
Company may terminate the REF effective upon fifteen trading days' prior written
notice to AGS; provided that (i) there are no Advances outstanding, and (ii) the
Company has paid all amounts owed to AGS pursuant to the REF. AGS is obligated
to make an Advance to the Company pursuant to the REF within 15 days of such
request by the Company.
Item
3.02. Unregistered Sales of Equity Securities.
The
information set forth under Item 1.01 of this Current Report on Form 8-K is
hereby incorporated by reference into this Item 3.02.
Item
9.01. Financial Statements and Exhibits
(d)
Exhibits
99.1
Reserve Equity Financing Agreement, dated December 6, 2009, by and between AGS
Capital Group, LLC and Octus, Inc.
99.2
Registration Rights Agreement, dated December 6, 2009, by and between AGS
Capital Group, LLC and Octus, Inc.
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.
OCTuS
Inc.
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Date:
December 9, 2009
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By:
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/s/
Christian J. Soderquist
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Christian
J. Soderquist
Chief
Executive Officer
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