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EX-99.1 - China Wi-Max Communications, Inc. | v191878_ex99-1.htm |
EX-99.2 - China Wi-Max Communications, Inc. | v191878_ex99-2.htm |
EX-99.3 - China Wi-Max Communications, Inc. | v191878_ex99-3.htm |
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): July
28,
2010
(Exact name of registrant as specified
in its charter)
Nevada
(State or other jurisdiction of
incorporation)
000-53268
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61-1504884
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(Commission File
Number)
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(I.R.S.
Employer
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Identification
No.)
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1905 Sherman
Street, Suite 335, Denver, Colorado 80203
(Address of principal executive
offices)(Zip Code)
Registrant's telephone number, including
area code: 303-993-8028
____n/a_____
(Former name, former address and former
fiscal year,
if changed since last
report)
Total number of pages in this document:
4
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.
¨ Written communications pursuant to Rule
425 under the Securities Act (17 CFR240.14d-2(b))
¨ Soliciting material pursuant to Rule
14a-12 under Exchange Act (17 CFR240.14a-12)
¨ Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR240.14d-2(b))
¨ Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND
OPERATIONS
Item 1.01. Entry into a
Material Definitive Agreement
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”). 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 100% 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:
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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.
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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.
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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.
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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.
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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.
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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 which 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.
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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.
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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.
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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.
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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.
The REF
contains representations and warranties of the Company and AGS which 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 and AGS will each pay its own fees and expenses (including the fees of
any attorneys, accountants, appraisers or others engaged by such party) in
connection with the REF and the transactions contemplated hereby. The
Company shall transfer to AGS freely tradable Common Stock equal to 7% of the
Commitment Amount upon signing the REF (“Commitment Shares”), however, the
Company shall issue to AGS no more than 9.99% of the current outstanding share
account. The balance of the Commitment Shares shall be delivered to
AGS as soon as possible in accordance with the 9.99% threshold
limitation. The pricing for the Commitment Shares will be based on
the average closing price for the 10 trading days preceding the date of this
Agreement.
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. The
obligation of AGS to make an Advance to the Company pursuant to the REF shall
terminate permanently if (i) there shall occur any stop order or suspension
of the effectiveness of the Registration Statement for an aggregate of fifty
(50) trading days or (ii) the Company shall at any time fail
materially to comply with certain covenants specified in the REF and such
failure is not cured within thirty (30) days after receipt of written
notice from AGS, subject to exceptions.
Registration
Rights Agreement
The
shares of common stock that may be issued to AGS under the REF will be issued
pursuant to an exemption from registration under the Securities Act of 1933, as
amended, or the Securities Act of 1933, as amended (the “Securities Act”).
Pursuant to the registration rights agreement, we will file a registration
statement, covering the possible resale by AGS of the shares that we may issue
to AGS under the REF (the “Registration Statement”). The Registration Statement
may cover only a portion of the total shares of our common stock issuable
pursuant to the REF with AGS. We may file subsequent Registration Statements
covering the resale of additional shares of our common stock issuable pursuant
to the REF. As described above, the effectiveness of this
Registration Statement is a condition precedent to our ability to sell common
stock to AGS under the REF. We intend to file the Registration Statement within
30-45 days from the date hereof.
Placement
Agent
If so
required by the SEC, the Company agrees to pay a registered broker dealer to act
as placement agent, a percentage of the Put Amount on each draw toward the
fee. AGS shall have no obligation with respect to any claims made by
or on behalf of other persons or entities for fees of a type contemplated in
this Section that may be due in connection with the transactions contemplated by
the Reserve Equity Financing Documents. The Company shall indemnify
and hold harmless AGS, its employees, officers, directors, agents, and partners,
and their respective affiliates, from and against all claims, loses, damages,
costs (including the costs of preparation and attorney’s fees) and expenses
incurred in respect of any such claimed or existing fees, as such fees and
expenses are incurred.
The
securities sold in this transaction have not been registered under the
Securities Act of 1933, as amended (the “Act”) and may not be offered or sold in
the United States in the absence of an effective registration statement or
exemption from the registration requirements under the Act. CHWM believes that
the issuance of the foregoing securities was exempt from registration under
Section 4(2) of the Act as transactions not involving a public
offering. The facts relied upon to claim the exemption include: (i)
the purchaser represented that he purchased shares from the Company for
investment and not with a view to distribution to the public; (ii) the
certificate issued for unregistered securities contains a legend stating that
the securities have not been registered under the Securities Act and setting
forth the restrictions on the transferability and the sale of the securities;
(iii) the purchaser represented that he is an accredited investor and
sophisticated and is familiar with our business activities; and (iv) the
purchaser was given full and complete access to any corporate information
requested by them.
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.
On July 23, 2010 we entered into a
Convertible Promissory Note for $50,000 bearing interest at 8% per annum, due on
April 27, 2011, and related Securities Purchase Agreement with Asher
Enterprises, Inc.. The conversion price will be at 58% of the lowest of three
closing bid prices during the ten trading day period ending one trading day
prior to the date the holder sends a conversion notice to us. We have instructed
our transfer agent to reserve shares in an amount deemed sufficient to meet this
conversion right.
Item
7.01. Regulation FD Disclosure
The information
in this Item 7.01 of this Current Report is furnished pursuant to
Item 7.01 and shall not be deemed "filed" for any purpose, including
for the purposes of Section 18 of
the Exchange Act, or otherwise subject to the
liabilities of that Section. The information in this Current Report
on Form 8-K shall not be deemed incorporated by reference
into any filing under the Securities Act or the Exchange Act
regardless of any general incorporation language in such filing.
On July
28, 2010, the Company issued a press release regarding recent events. The text
of the press release is attached as Exhibit 99.3.
Item
9.01. Financial Statements and Exhibits
(d)
Exhibits
99.1
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Reserve
Equity Financing Agreement, dated July 23, 2010, by and between AGS
Capital Group, LLC and China Wi-Max Communications,
Inc.
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99.2
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Registration
Rights Agreement, dated July 23, 2010, by and between AGS Capital Group,
LLC and China Wi-Max Communications, Inc.
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99.3
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Press
Release of China WI-Max Communications, Inc. dated July 28,
2010.
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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.
CHINA
WI-MAX COMMUNICATIONS, INC. (Registrant)
Dated:
July 28, 2010
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/s/ Steven Berman
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Steven
Berman, President
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