Attached files
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EX-4.2 - CONSPIRACY ENTERTAINMENT HOLDINGS INC | v206186_ex4-2.htm |
EX-4.1 - CONSPIRACY ENTERTAINMENT HOLDINGS INC | v206186_ex4-1.htm |
EX-99.1 - CONSPIRACY ENTERTAINMENT HOLDINGS INC | v206186_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date of
Report (Date of earliest reported): December 17, 2010
(Exact
name of registrant as specified in charter)
Utah
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000-32427
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87-0386790
|
||
(State or Other Jurisdiction
of Incorporation or
Organization)
|
(Commission
File Number)
|
(IRS
Employer Identification
No.)
|
612 Santa
Monica Boulevard, Santa Monica, CA 90401
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code: (310) 260-6150
Copies
to:
Marc
Ross, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway
New York,
New York 10006
Phone:
(212) 930-9700
Fax:
(212) 930-9725
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))
Item
1.01 Entry into a Material Definitive
Agreement
On
December 17, 2010, (the "Closing Date") Conspiracy Entertainment Holdings, Inc.
(the “Company”) entered into a subscription agreement (the “Subscription
Agreement”), by and among the Company and the subscribers listed therein (the
“Subscribers”). Pursuant to the Subscription Agreement, the Company
sold the subscribers to $150,000 principal amount of promissory notes and issued
the Subscribers 3,750,000 Class A Warrants (the “Warrants”), which equals one
Class A Warrant for each two shares which would be issued upon the full
conversion of the Promissory Notes assuming the full conversion of the
Promissory Notes. Immediately following the closing, there
were 31,288,019 outstanding shares of the Company’s common
stock.
The Notes
mature two years from the date of issuance and will accrue interest at the
rate of 14%. Upon a default in the payment of any amounts due under
the Notes, the interest rate will be increased to 18%. Upon the
occurrence of an Event of Default (as such term is defined in the Notes), all
principal and interest then remaining unpaid shall be immediately due and
payable. Events of Default include but are not limited to (i)
the Company’s failure to make payments when due, (ii) breaches by the Company of
its representations and/or warranties (iii) delisting of the Company’s common
stock from the OTC Bulletin Board.
Pursuant
to the terms of the Notes, the Subscribers have the right, so long as the Notes
are not fully repaid, to convert the Notes into shares of the Company’s common
stock at a conversion price per share that is equal to the lesser of $.02, or
$70% of the average of the five lowest closing bid prices for the Company’s
Common Stock as reported by Bloomberg L.P. for the Principal Market for the ten
trading days preceding the date the Subscriber gives the Company notice of
conversion, as may be adjusted. The Notes contain anti-dilution
provisions, including but not limited to if the Company issues shares of its
common stock at less than the then existing conversion price, the conversion
price of the Notes will automatically be reduced to such lower price. The Notes
and Warrants contain limitations on conversion, including the limitation that
the holder may not convert its Note to the extent that upon conversion the
holder, together with its affiliates, would own in excess of 4.99% of the
Company’s outstanding shares of common stock (subject to an increase upon at
least 61-days’ notice by the Subscriber to the Company, of up to
9.99%).
The Notes
are secured by a security interest in certain assets of the
Company.
The
Warrants issued to the Subscribers terminate five years from the Closing
Date. The subscribers may Exercise Price of the Warrants may be
paid by cash or if the Fair Market Value of the Company’s Common Stock is
greater than the Exercise Price (at the date of such calculation), the
Subscriber may elect to receive shares equal to the value of the Warrant (or
portion being cancelled) and the Company shall issue the Subscriber a number of
shares of Common Stock computed using the following formula:
X= Y (A-B)
A
Where
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X=
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the
number of shares of Common Stock to be issued to the
holder
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Y=
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the
number of shares of Common Stock purchasable under the Warrant or, if only
a portion of the Warrant is being exercised, the portion of the Warrant
being exercised (at the date of such
calculation)
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A=
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Fair
Market Value
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B=
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Purchase
Price (as adjusted to the date of such
calculation)
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The
Company claims an exemption from the registration requirements of the Act for
the private placement of these securities pursuant to Section 4(2) of the
Securities Act of 1933 and/or Regulation D promulgated thereunder since, among
other things, the transaction did not involve a public offering, the investor
was an accredited investor and/or qualified institutional buyers, the investor
had access to information about us and their investment, the investor took the
securities for investment and not resale, and we took appropriate measures to
restrict the transfer of the securities.
The
foregoing descriptions of the Subscription Agreement, the Secured Convertible
Note and the Warrant do not purport to be complete and are qualified
in their entirety by reference to these documents which are attached as
exhibits to this Current Report and are incorporated into this Item by
reference.
Item
2.03 Creation of a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a
Registrant
The
information required to be disclosed under this Item 2.03 is disclosed under
Item 1.01 and is incorporated by reference into this Item.
Item
3.02 Unregistered Sales of Equity
Securities
The
information required to be disclosed under this Item 3.02 is disclosed
under Item 1.01 and is incorporated by reference into this Item.
Item
9.01 Financial Statements and
Exhibits
Exhibit No.
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Description
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4.1
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Form
of Secured Convertible Note
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4.2
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Form
of Class A Common Stock Purchase Warrant
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99.1
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Subscription
Agreement
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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.
CONSPIRACY
ENTERTAINMENT HOLDINGS,
INC.
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Date: December
21, 2010
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By:
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/s/
Keith
Tanaka
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Name:
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Keith
Tanaka
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Title:
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Chief
Financial Officer
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EXHIBIT
INDEX
Exhibit No.
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Description
|
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4.1
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Form
of Secured Convertible Note
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4.2
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Form
of Class A Common Stock Purchase Warrant
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99.1
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Subscription
Agreement
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