Attached files
| file | filename |
|---|---|
| EX-99.5 - WARRANT FOR STOCK - Lightning Gaming, Inc. | s22-9594_ex995.htm |
| EX-99.1 - DEBT CONVERSION AGREEMENT - Lightning Gaming, Inc. | s22-9594_ex991.htm |
| EX-99.6 - WARRANT FOR STOCK - Lightning Gaming, Inc. | s22-9594_ex996.htm |
| EX-99.8 - SECURITY AGREEMENT - Lightning Gaming, Inc. | s22-9594_ex998.htm |
| EX-99.4 - PROMISSORY NOTE - Lightning Gaming, Inc. | s22-9594_ex994.htm |
| EX-99.3 - PROMISSORY NOTE - Lightning Gaming, Inc. | s22-9594_ex993.htm |
| EX-99.9 - INTELLECTUAL PROPERTY SECURITY AGREEMENT - Lightning Gaming, Inc. | s22-9594_ex999.htm |
| EX-99.7 - GUARANTY AGREEMENT - Lightning Gaming, Inc. | s22-9594_ex997.htm |
| EX-99.11 - CERTIFICATE OF DESIGNATION OF RIGHTS - Lightning Gaming, Inc. | s22-9594_ex9911.htm |
| EX-99.10 - INTELLECTUAL PROPERTY SECURITY AGREEMENT - Lightning Gaming, Inc. | s22-9594_ex9910.htm |
| EX-99.2 - LOAN AGREEMENT - Lightning Gaming, Inc. | s22-9594_ex992.htm |
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 8-KCURRENT REPORTPursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 5, 2010
Lightning Gaming, Inc.(Exact name of registrant as specified in charter)
Nevada 000-52575 20-8583866 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 23 Creek Circle, Suite 400, Boothwyn, Pa 19061(Address of principal executive offices) (Zip Code)(Registrant’s telephone number, including area code) 610 494 5534_____________________________________________________(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfythe filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
Section
1 - Registrant’s Business and Operations
Item
1.01 Entry into a Material Definitive Agreement.
1. Debt Conversion
Agreement
On
February 5, 2010, we and our wholly-owned subsidiary, Lightning Poker, Inc.
(“LPI”), entered into a Debt Conversion Agreement (the “Conversion Agreement”)
with Stewart J. Greenebaum, LLC (“Greenebaum”). Pursuant to the
Conversion Agreement, a $1,000,000 promissory note that LPI issued to Greenebaum
on July 2, 2007 was converted into 500,000 shares of our Series A Nonvoting
Capital Stock (“Nonvoting Stock”), which is described in Item 5.03 below, and
all accrued and unpaid interest and all other amounts payable under the note
(other than the converted principal amount) were canceled. The
conversion took place after our filing on February 22, 2010 with the
Secretary of State of the State of Nevada (the “Nevada Secretary”) of a
Certificate Of Designation Of Rights, Powers, Limitations And Restrictions with
respect to the Nonvoting Stock (the “Certificate of
Designation”). The Conversion Agreement gives Greenebaum preemptive
rights to purchase additional shares of Nonvoting Stock (or certain equivalents
of Nonvoting Stock) if we sell additional stock in certain types of
transactions, so as to maintain Greenebaum’s aggregate percentage ownership of
all of our outstanding stock on a fully-diluted basis.
In
addition to the Nonvoting Stock acquired under the Conversion Agreement,
Greenebaum beneficially owns more than 5% of our outstanding common stock, based
on Greenebaum's ability to acquire our common stock through the exercise of
warrants or conversion of promissory notes.
2. Financing
Transaction
On
February 22, 2010, LPI borrowed $2,000,000, at an interest rate of 8% per annum,
under a loan agreement with The Co-Investment Fund II, L.P. (“CI II”) and
Greenebaum (together with CI II, the “Lenders”). All principal and
accrued interest under the loans are payable by LPI on the February 22,
2013 maturity date, subject to conversion and acceleration provisions summarized
below. Each of the Lenders financed one-half of LPI’s total
borrowing. LPI will use the loan proceeds for working capital
purposes. We have guaranteed LPI’s obligations under the loan
agreement, and LPI has pledged substantially all of its assets as collateral for
those obligations.
As
partial consideration for the loans, we issued to each of the Lenders a warrant
to purchase up to 500,000 shares of our common stock at an exercise price of
$2.00 per share (subject to antidilution adjustments). The warrants
are exercisable until February 22, 2015. If the warrants are
exercised and we later register any of our securities under the Securities Act
of 1933, as amended (the “Securities Act”), the holders of our shares that were
acquired through the exercise of the warrants can require us to make reasonable
efforts to include their shares in that registration, at our expense, subject to
the terms and conditions of the warrants.
The loan
agreement restricts LPI from prepaying the loans; incurring further indebtedness
outside the ordinary course of business; renewing, extending or refinancing
pre-existing indebtedness; subjecting its property to further liens; or
transferring the collateral, without the required consent of the
Lenders.
2
The
maturity of the loans is subject to acceleration in the event of a default by
LPI, which would include, among other things, a material adverse change with
respect to LPI (as detailed in the loan agreement), an unstayed or undischarged
judgment against LPI in excess of $50,000, a default by LPI under its
pre-existing loans from the Lenders, or LPI’s breach of any other material
obligation, or loss of a material license or permit, that would reasonably be
expected to have a material adverse effect on LPI.
The
entire balance of principal and accrued interest under the loans can, at the
discretion of the respective Lenders, be converted into shares of stock that we
issue in our next equity financing transaction. Such conversion would
be at the same price and on the same terms and conditions as the shares we issue
in that equity financing.
CI II is
managed by Cross Atlantic Capital Partners Inc. (“Cross Atlantic”). Donald
Caldwell is a member of our board of directors and is the founder and chief
executive officer of Cross Atlantic. Frederick R. Tecce is a member of our board
of directors and is a managing director and of counsel of Cross Atlantic. CI II
and Greenebaum are each deemed to own beneficially more than 5% of our
outstanding common stock, based on their ability to acquire our common stock
through the exercise of warrants or conversion of promissory notes.
The above
descriptions of the Conversion Agreement and the financing transaction are
merely summaries of their material terms. Copies of the Conversion
Agreement and the material agreements relating to the financing transaction are
filed as exhibits to this Form 8-K. Interested parties should read
those agreements in their entirety.
Section
2 - Financial Information
Item
2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
Please
refer to Item 1.01 of this Form 8-K for information concerning the direct
financial obligations on which we and LPI have become obligated under the loan
agreement with the Lenders.
Section
3 - Securities and Trading Markets
Item
3.02 Unregistered
Sales of Equity Securities.
Please
refer to Item 1.01 of this Form 8-K for information concerning the shares of
Nonvoting Stock that we issued under the Conversion Agreement, the loans that
LPI obtained from the Lenders, which under certain circumstances are convertible
into shares of our common stock, and the warrants to purchase shares of our
common stock that we issued to the Lenders as partial consideration for the
loans. The notes evidencing the loans and the warrants were issued
without registration under the Securities Act pursuant to the exemption from
registration in Section 4(2) of the Securities Act. The
Nonvoting Stock was issued without registration under the Securities Act
pursuant to exemptions from registration set forth in Sections 3(a)(9) and
4(2) of the Securities Act.
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Item
3.03 Material
Modification to Rights of Security Holders.
Effective
February 22, 2010, through our filing of the Certificate of Designation with the
Nevada Secretary, we created the Nonvoting Stock as a new series of capital
stock, consisting of 6,000,000 shares, of which we issued 500,000 shares to
Greenebaum under the Conversion Agreement as discussed in Item 1.01
above. The Nonvoting Stock participates with, and is identical to,
our common stock in all respects, except that the Nonvoting Stock carries no
voting rights (unless legally mandated). The Conversion Agreement
gives Greenebaum certain preemptive rights to maintain its aggregate percentage
ownership of all of our outstanding stock, as discussed in Item 1.01
above.
Section
5 - Corporate Governance and Management
Item
5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Effective
February 22, 2010, we authorized 6,000,000 shares of Nonvoting Stock
through the filing of the Certificate of Designation. The Nonvoting
Stock was authorized as a new series of stock within our class of capital stock
titled “Preferred Stock,” which consists of 10,000,000 shares. Each
share of Nonvoting Stock is identical in all respects to each share of our
common stock, except that Nonvoting Stock carries no voting rights whatsoever
(unless legally mandated). We have not fixed the terms of the
remaining 4,000,000 shares of Preferred Stock that are authorized under our
articles of incorporation.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial
Statements and Exhibits.
(a) Not
applicable.
(b) Not
applicable.
(c) Not
applicable.
(d) Exhibits:
|
Exhibit No.
|
Description
|
|
|
99.1
|
Debt
Conversion Agreement among Lightning Gaming, Inc. (“LGI”), LPI and
Greenebaum
|
|
|
99.2
|
Loan
Agreement among LPI and the Lenders
|
|
|
99.3
|
Promissory
Note issued by LPI to CI II
|
|
|
99.4
|
Promissory
Note issued by LPI to Greenebaum
|
|
|
99.5
|
Warrant
for Stock issued by LGI to CI II
|
|
|
99.6
|
Warrant
for Stock issued by LGI to Greenebaum
|
|
|
99.7
|
Guaranty
Agreement by LGI in favor of CI II as the Lenders’ Agent
(“Agent”)
|
|
|
99.8
|
Security
Agreement between LPI and CI II as Agent
|
|
|
99.9
|
Intellectual
Property Security Agreement for Patents and Trademarks between LPI and CI
II as Agent
|
|
|
99.10
|
Intellectual
Property Security Agreement for Copyrights and Mask Works between LPI and
CI II as Agent
|
|
|
99.11
|
Certificate
Of Designation Of Rights, Powers, Limitations And Restrictions Of Series A
Nonvoting Capital Stock Of Lightning Gaming,
Inc.
|
4
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.
Lightning
Gaming, Inc.
By:/s/
Robert Ciunci
Robert Ciunci, Chief Financial Officer
Date: February
26, 2010
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