Attached files
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| EX-10.3 - Emmaus Life Sciences, Inc. | v198950_ex10-3.htm |
UNITED STATES
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 7,
2010
CNS RESPONSE, INC.
(Exact name of Company as specified in
its charter)
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Delaware
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0-26285
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87-0419387
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(State or
other
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(Commission File
No.)
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(I.R.S.
Employer
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jurisdiction
of
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Identification
No.)
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incorporation)
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85 Enterprise, Suite 410
Aliso Viejo, CA 92656
(Address of principal executive
offices)
(714) 545-3288
(Registrant’s telephone number,
including area code)
Not Applicable
(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:
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o
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Written communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive
Agreement.
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The description of the Purchase
Agreement and the Security Agreement (both as defined below) are incorporated by
reference to Item 2.03 of the current report on Form 8-K of CNS Response, Inc.
(the “Company”) filed on October 7, 2010. The description of the
Engagement Agreement (as defined below) is incorporated by reference to Item
2.03 of this Form 8-K.
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Item 2.03
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Creation of a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
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On October 1, 2010, CNS Response Inc.
(the “Company”) entered into a Note and Warrant Purchase Agreement (the
“Purchase Agreement”) with two investors. The Purchase Agreement
provides for the issuance and sale of secured convertible promissory notes (the
“Notes”), for cash or in exchange for outstanding convertible notes, in the
aggregate principal amount of up to $3,000,000 plus an amount corresponding to
accrued and unpaid interest on any exchanged notes, and warrants to purchase a
number of shares corresponding to 50% of the number of shares issuable on
conversion of the Notes (the “Warrants”). The obligations of the
Company under the terms of the Notes are secured by a security interest in the
tangible and intangible assets of the Company, pursuant to a security agreement,
dated as of October 1, 2010, by and between the Company and John Pappajohn, as
administrative agent for the holders of the Notes (the “Security
Agreement”). The first closing pursuant to the Purchase Agreement
occurred on October 1, 2010.
On October 7 and October 12, 2010, a
third and fourth investor, respectively, executed the Purchase
Agreement. In connection therewith, the Company issued Notes in the
aggregate principal amount of $600,000 and Warrants to purchase up to 999,999
shares of common stock of the Company, to such investors on such
dates. The Company received $588,000 in net proceeds from these
investors. Monarch Capital Group LLC (“Monarch”) acted as
non-exclusive placement agent with respect to the placement of Notes in the
aggregate principal amount of $100,000 and related Warrants, pursuant to an
engagement agreement, dated September 30, 2010, between the Company and Monarch
(the “Engagement Agreement”). Under the Engagement Agreement, in
return for its services as non-exclusive placement agent, Monarch is entitled to
receive (a) a cash fee equal to 10% of the gross proceeds raised from the sale
of Notes to investors introduced to the Company by Monarch; (b) a cash expense
allowance equal to 2% of the gross proceeds raised from the sale of Notes to
such investors; and (c) five-year warrants (the “Placement Agent Warrants”) to
purchase common stock of the Company equal to 10% of the shares issuable upon
conversion of Notes issued to such investors. The Placement Agent Warrants have an
exercise price equal to 110% of the conversion price of the
Notes. The terms of the Placement Agent Warrants,
except for the exercise price and period, are identical to the terms of the
Warrants. In connection with the October 12, 2010 closing, Monarch
received a cash fee of $10,000 and a cash expense allowance of $2,000 and will
receive Placement Agent Warrants to purchase 33,333 shares of the Company’s
common stock at an exercise price of $0.33 per share.
A more detailed description of the
Notes, the Warrants, the Purchase Agreement and the Security Agreement is
included in Item 2.03 of the Company’s current report on Form 8-K filed on
October 7, 2010 (File No. 000-26285)(the “October 7, 2010 8-K”), the Form of
Note, Form of Warrant, Purchase Agreement and Security Agreement are filed as
exhibits to such Form 8-K, and such description and exhibits are hereby
incorporated herein by reference. The description of the Engagement
Agreement is qualified by reference to the agreement filed as Exhibit 10.3 to
this Form 8-K, which is hereby incorporated herein by
reference.
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Item 3.02
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Unregistered Sales of Equity
Securities.
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The description of the Notes and the
Warrants is incorporated herein by reference to Item 2.03 hereof and the full
text of the form of Note and form of Warrant attached as Exhibits 4.1 and 4.2 to
the October 7, 2010 8-K.
The Notes and Warrants were issued by
the Company under the exemption from registration afforded by Section 4(2) of
the Securities Act of 1933, as amended, and Regulation D promulgated thereunder,
as they were issued to accredited investors, without a view to distribution, and
were not issued through any general solicitation or
advertisement.
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Item 9.01
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Financial Statements and
Exhibits.
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Exhibit 4.1
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Form of
Note.*
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Exhibit 4.2
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Form of
Warrant.*
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Exhibit
10.1
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Note and Warrant Purchase
Agreement, dated as of October 1, 2010.*
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Exhibit
10.2
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Security Agreement, dated as of
October 1, 2010.*
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Exhibit
10.3
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Engagement Agreement, dated
September 30, 2010, between the Company and Monarch Capital Group,
LLC.
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*
Incorporated herein by reference to the corresponding exhibits to the Company’s
current report on Form 8-K filed on October 7, 2010.
SIGNATURES
Pursuant to the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
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CNS Response,
Inc.
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By:
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/s/ Paul
Buck
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October 13,
2010
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Paul Buck
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Chief Financial
Officer
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