UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) January 6, 2005
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Securac Corp.
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(Exact Name of Registrant as Specified in Its Charter)
Nevada
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(State or Other Jurisdiction of Incorporation)
033-07456-LA 88-0210214
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(Commission File Number) (IRS Employer Identification No.)
2500, 520-5th Avenue SW, Calgary, Alberta T2P 3R7
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(Address of Principal Executive Offices) (Zip Code)
(403) 225-0403
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(Registrant's Telephone Number, Including Area Code)
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(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 (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| 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))
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION.
On January 6, 2005, we acquired all of the outstanding stock of Risk
Governance, Inc., a private Delaware corporation ("RGI"), in exchange for stock
of our company valued at $1,147,722 for purposes of the transaction. The
transaction was effected pursuant to a share purchase agreement entered into on
the same date by our company with the shareholders of RGI. Pricing of the
transaction was fixed in connection with a letter of intent previously entered
into between our company and RGI. As a result of the acquisition, RGI is now a
wholly-owned subsidiary of our company.
The principal asset of RGI is a license to certain corporate governance
software technology owned and developed by Risk Governance Ltd., a United
Kingdom company under common ownership with RGI prior to the acquisition
("RGL"). The license gives RGI the right to commercialize applications of the
software technology on an exclusive basis in North America in exchange for
royalty payments to RGL. Contemporaneous with and as a condition to the
acquisition of RGI, Securac Holdings Inc., a private Alberta corporation
("Holdings") from which we license our Acertus(TM) software technology, acquired
all of the outstanding stock of RGL in exchange for an equity interest in
Holdings. The value of the consideration paid by Holdings was agreed for
purposes of the agreement to be equal to $1,147,722, the agreed value of the
stock paid by our company for RGI. Holdings is controlled and substantially
owned by three members of our management, Messrs. Terry Allen, Bryce Mitchell
and Paul Hookham.
RGI's Messrs. David Sallis and Su Ahmad have agreed to continue in their
management capacities with RGI following the acquisition under the terms of
their existing management contracts. In connection with and as a condition to
the acquisition, RGI's board of directors and other management members were
replaced with members of our management.
See Item 3.02 below.
SECTION 3 - SECURITIES AND TRADING MARKETS
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
In connection with our acquisition of RGI, we issued a total of 2,295,444
shares of our common stock, valued for purposes of the agreement at $.50 per
share, to the shareholders of RGI in exchange for all of the outstanding stock
of RGI.
Our issuance of the shares was made without registration under the
Securities Act of 1933, as amended, in reliance on Regulation S promulgated
thereunder. Each of the shareholders of RGI represented, among other things,
that such person is not a US Person within the meaning of Regulation S,
appropriate legends were placed on the offering documents and no selling efforts
were made in the United States.
Since October 19, 2004, the date of our last Current Report on Form 8-K
(the "Prior 8-K"), we have sold or received subscriptions to purchase the
following equity securities (which, exclusive of the as yet unfunded
subscription referred to in clause 2 below, amount to just below 5% of the
number of securities shown as outstanding in the Prior 8-K):
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1. On October 29, 2004, we sold a total of 394,000 shares of common
stock to a limited number of investors at $0.50 per share, resulting
in gross proceeds of $197,000.
2. On October 31, 2004, we received an irrevocable commitment from one
subscriber to purchase a total of 600,000 shares of common stock at
$0.75 per share. The subscription has not yet been funded and is
cancelable by us prior to acceptance of subscription funds and
issuance of share certificates. If and when the subscription is
funded, we have agreed to issue a warrant to purchase a like number
of shares at $0.25 per share to the introducing party. The warrant
would expire on October 31, 2006.
3. Effective October 29, 2004, we agreed with a lender to convert
indebtedness for borrowed money totaling $250,000 into common stock
at a rate of $0.50 per share, 350,000 shares in total, plus two-year
warrants to purchase a like number of shares at $0.75 per share.
4. During December 2004, we sold a total of 477,474 units to a limited
number of investors at $0.75 per unit. Each unit consists of one
share of common stock and one warrant, exercisable at $1.25 per
share, to purchase one share of common stock at any time until
December 1, 2007. In connection with the investment, we have agreed
to pay a placement agent 3% of the gross proceeds.
The offer and sale of the foregoing securities was made without
registration under the Securities Act of 1933, as amended, in reliance upon the
exemption provided by Section 4(2) thereof and/or in reliance upon Regulation S
promulgated thereunder. Each of the investors and subscribers represented, among
other things, that such person is either an "accredited investor" within the
meaning of the Securities Act of 1933, as amended, or that such person is not a
US Person within the meaning of Regulation S. In addition, appropriate legends
were placed on the offering documents and no selling efforts were made in the
United States.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
To be filed by amendment.
(b) Pro forma financial information.
To be filed by amendment.
(c) Exhibits.
2.1 Share Purchase Agreement, dated January 6, 2005, among the
registrant and each of the shareholders of Risk Governance, Inc.
together with a form of Power of Attorney executed by each
shareholder party to the Share Purchase Agreement.
99.1 Press Release, dated January 19, 2005 announcing the acquisition.
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SIGNATURE
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.
Securac Corp.
By: /s/ Paul J. Hookham
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Chief Financial Officer
Date: January 19, 2005
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EXHIBIT INDEX
Number Description
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2.1 Share Purchase Agreement, dated January 6, 2005, among the registrant
and each of the shareholders of Risk Governance, Inc. together with a
form of Power of Attorney executed by each shareholder party to the
Share Purchase Agreement.
99.1 Press Release, dated January 19, 2005 announcing the acquisition.
4