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):
October 6, 2005 (September 30, 2005)
TRIBEWORKS, INC.
(Exact name of registrant as specified in its charter)
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| Delaware
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001-28675
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94-337095 |
(State or Other
Jurisdiction of
Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.) |
243 Front Street
San Francisco, California 94111
(Address of Principal Executive Offices) (Zip Code)
(415) 674-5555
(Registrant’s telephone number, including area code)
(Registrant’s 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):
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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 CFR 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)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
ITEM 3.02: UNREGISTERED SALES OF EQUITY SECURITIES
The Company completed a private placement of 84,000 shares of its Series B Convertible Redeemable
Preferred Stock (the “Series B Preferred Stock”), stated value $0.50 per share (the
“Shares”) on September 30, 2005. The Series B Preferred Stock has a stated value of $0.50
per share and ranks prior to all of the Company’s common stock, par value $0.0004 per share (the
“Common Stock”) with respect to dividends and distribution of assets upon liquidation of
the Company, whether voluntary or involuntary and parri passu with the Company’s Series A
Convertible Redeemable Preferred Stock. Holders of Series B Preferred Stock will receive annual
cumulative dividends equal to ten percent (10%) of the aggregate Liquidation Preference (which
shall be the stated value of the Series B Preferred Stock, plus accrued but unpaid dividends, if
any) per share of Series B Preferred Stock. Accrued dividends with respect to each share of Series
B Preferred Stock are payable either in cash or in shares of Common Stock, at the Company’s sole
option.
Each Share is convertible at the sole option of the Company into one (1) fully paid and
non-assessable share of Common Stock. At any time after issuance, the Company may redeem all, but
not less than all, of the outstanding shares of Series B Preferred Stock for $0.50 per share plus
any accrued but unpaid dividends thereon. The holders of Series B Preferred Stock may elect to
convert their shares after receipt of a notice of redemption from the Company until the close of
business on the business day prior to the redemption date specified by the Company in the
redemption notice. Such redemption notice must be delivered by the Company to the holders of the
outstanding shares of Series B Preferred Stock at least 30 days prior to the redemption date
specified by the Company in the redemption notice. The conversion ratio for the Series B Preferred
Stock is one share of Common Stock for each share of Series B Preferred Stock so converted. At any
time after issuance, the Company may, at its sole option, also force the holders of the Series B
Preferred Stock to convert their shares of Series B Preferred Stock into Common Stock on a 1:1
conversion ratio.
In the event of conversion of the outstanding shares of Series B Preferred Stock, the Company is
obligated to issue to each holder of then outstanding Series B Preferred Stock a one year warrant
to purchase one (1) share of Common Stock at a strike price of $1.00 per share for each two (2)
shares of Series B Preferred Stock so converted.
In order to (i) effect an amendment of the Company’s Certificate of Incorporation or By-Laws which
would materially adversely affect the rights of the Series B Preferred Stock or (ii) to alter,
amend or repeal the rights preferences and special powers of the Series B Preferred Stock, the
affirmative vote of the holders of at least 66-2/3% of the then outstanding shares of Series B
Preferred Stock must first be obtained. Holders of Series B Preferred Stock have no voting rights
other than as set forth in this paragraph.
The Company is not prohibited from issuing additional series of preferred stock that are senior in
priority to the Series B Preferred Stock. Beginning 6 months from the date of closing, upon
demand, the Company has an obligation to register the resale of the shares of Common Stock issuable
upon conversion of the Series B Preferred Stock and the exercise of the warrants discussed above.
The Company privately placed 84,000 shares of Series B Preferred Stock with 4 accredited investors
for an aggregate purchase price of $42,000, which funds have been received by the Company. The
Company privately placed these shares of Series B Preferred Stock directly without the use of any
broker, placement agent or finder. No additional Shares of Series B Preferred Stock will be sold
by the Company. The Company relied on the exemptions from registration requirements provided by
Section 4(2) and Section 4(6) and Rule 506 of Regulation D promulgated under the Securities Act of
1933, as amended (the “Act”) for this transaction and for the issuances. Each investor
represented to the Company, in writing, that they were an “accredited investor” as that term is
defined in Rule 501 of Regulation D promulgated under the Act.