Attached files
| file | filename |
|---|---|
| EX-2.1 - Luvu Brands, Inc. | v209838_ex2-1.htm |
| EX-10.2 - Luvu Brands, Inc. | v209838_ex10-2.htm |
| EX-99.2 - Luvu Brands, Inc. | v209838_ex99-2.htm |
| EX-10.3 - Luvu Brands, Inc. | v209838_ex10-3.htm |
| EX-23.1 - Luvu Brands, Inc. | v209838_ex23-1.htm |
| EX-99.3 - Luvu Brands, Inc. | v209838_ex99-3.htm |
| EX-99.1 - Luvu Brands, Inc. | v209838_ex99-1.htm |
| EX-10.1 - Luvu Brands, Inc. | v209838_ex10-1.htm |
| EX-10.4 - Luvu Brands, Inc. | v209838_ex10-4.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): February 2, 2011 (January 27,
2011)
WES Consulting,
Inc.
(Exact
name of registrant as specified in Charter)
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Florida
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000-53314
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59-3581576
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(State
or other jurisdiction of
incorporation)
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(Commission
File No.)
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(IRS
Employer Identification No.)
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2745
Bankers Industrial Drive
Atlanta, GA
30360
(Address
of Principal Executive Offices)
(770)
246-6400
(Registrant’s
telephone number, including area code)
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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¨
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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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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¨
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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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This
Form 8-K and other reports filed by the Registrant from time to time with the
Securities and Exchange Commission (collectively, the “Filings”) contain or may
contain forward looking statements and information that is based upon beliefs
of, and information currently available to, Registrant’s management as well as
estimates and assumptions made by Registrant’s management. When used in the
Filings the words “anticipate”, “believe”, “estimate”, “expect”, “future”,
“intend”, “plan” or the negative of these terms and similar expressions as they
relate to Registrant or Registrant’s management identify forward looking
statements. Such statements reflect the current view of Registrant with respect
to future events and are subject to risks, uncertainties, assumptions and other
factors (including the risks contained in the section of this report entitled
“Risk Factors”) relating to Registrant’s industry, Registrant’s operations and
results of operations. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may differ significantly from those anticipated, believed, estimated, expected,
intended or planned.
Except
as required by applicable law, including the securities laws of the United
States, Registrant does not intend to update any of the forward-looking
statements to conform these statements to actual results. The following
discussion should be read in conjunction with Registrant’s audited financial
statements for the fiscal years ended June 30, 2009 and 2010 and the related
notes thereto, the unaudited financial statements for the
three months ended September 30, 2010 and the related notes thereto,
and the exhibits filed with this Form 8-K.
In
this Form 8-K, references to “we,” “our,” “us,” “WES Consulting,” “WES,” or the
“Registrant” refer to WES Consulting, Inc., a Florida corporation.
Item
1.01 Entry Into a Material Definitive Agreement.
Stock
Purchase Agreement
On
January 27, 2011 (the “Closing Date”), WES Consulting, Inc., a Florida
corporation (the “Company”) entered into a Stock Purchase Agreement (the
“Purchase Agreement”) with Web Merchants, Inc., a Delaware corporation (“WMI”)
and Fyodor Petrenko and Dmitrii Spetetchii, the holders of 100% of WMI’s capital
stock (the “WMI Shareholders”), to acquire 100% of WMI’s issued and outstanding
equity ownership in exchange for 28,394,400 shares of our common stock to the
WMI Shareholders. One of the WMI Shareholders also received $100,000 in
cash, which represented $79,000 for the repayment of a loan such shareholder
made to WMI and $21,000 in consideration for such shareholder signing a
non-compete agreement with the Company. Pursuant to the Purchase
Agreement, WMI will continue to operate as a wholly owned subsidiary of the
Company.
Voting
Rights Agreement
As a
condition and inducement to the willingness of the WMI Shareholders to enter
into the Purchase Agreement, the Company’s President and CEO, Louis Friedman,
entered into a Voting Rights Agreement dated January 27, 2011 with the Company
and Fyodor Petrenko. Pursuant to the terms of the Voting Rights Agreement,
while Mr. Petrenko and Mr. Friedman own 50% or more of their current holdings,
the other party agrees to vote for the election of the other to the Company’s
Board of Directors and to elect certain other mutually agreed upon nominees to
the Board. Furthermore, they are prevented, in their capacities as
directors and shareholders, from acting on certain transactions without the
affirmative vote of the other.
Registration
Rights Agreement
The
Company also entered into a Registration Rights Agreement with Dmitrii
Spetetchii, pursuant to which the Company agreed to file a registration
statement by April 27, 2011 covering the resale of the 2,000,000 shares of the
Company’s common stock that Mr. Spetetchii was issued in connection with the WMI
acquisition described above. If the Company does not file the registration
statement by April 27, 2011, Mr. Spetetchii may make a demand on the Company to
file such registration statement. Until such registration statement is
declared effective by the Securities and Exchange Commission, Mr. Sptetechii’s
2,000,000 shares of common stock may not be transferred or resold unless the
transfer or resale is registered or there is an available exemption from the
registration requirements of the Securities Act of 1933, as amended, and
applicable state laws.
The
foregoing descriptions of the Purchase Agreement, Voting Rights Agreement, and
Registration Rights Agreement do not purport to be complete and are qualified in
their entirety by reference to the full text of the Purchase Agreement, Voting
Rights Agreement, and Registration Rights Agreement, which are filed as Exhibit
2.1, Exhibit 10.1, and 10.2, respectively, to this Current Report on Form 8-K,
the terms of which are incorporated herein by reference.
Item
2.01 Completion of Acquisition or Disposition of Assets.
On
January 27, 2011, the Company acquired 100% of the issued and outstanding equity
ownership of WMI from the WMI Shareholders. The acquisition was
unanimously approved by the Board of Directors of both the Company and WMI and
was approved by the shareholders of WMI at a special meeting held on January 27,
2011. Immediately following the acquisition, the WMI Shareholders own
approximately 31% of the Company’s outstanding common stock. Reference is
made to Item 1.01, which is incorporated herein and which summarizes the terms
of the WMI acquisition under the Purchase Agreement.
Item
3.02 Unregistered Sales of Equity Securities.
On
January 27, 2011, we issued 28,394,400 shares of our common stock in connection
with the acquisition of WMI under the Purchase Agreement, which is described in
Item 1.01 above. Our securities were offered and sold solely to accredited
investors in reliance on the exemption from registration provided by Section
4(2) of the Securities Act since the issuance did not involve a public offering,
the recipient took the shares for investment and not resale, and we took
appropriate measures to restrict transfer.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(c) Appointments
of Certain Officers
Fyodor “Fred” Petrenko as
Executive Vice President of the Company
Effective
January 27, 2011, the Board of Directors appointed Fyodor “Fred” Petrenko, age
43, as Executive Vice President. Mr.Petrenko co-founded WMI in 2002 and
has served as its President since then. Prior to then, Mr. Petrenko was
the head of investment banking with Media-Most, an international multimedia
holding company based in Russia. Mr. Petrenko holds a PhD in Physics from
Moscow State University and MS degree in Finance from CUNY
(Baruch).
In
connection with his appointment, the Company entered into an employment
agreement with Mr. Petrenko (the “Petrenko Agreement”). The initial term
of the Petrenko Agreement will expire on December 31, 2011, unless earlier
terminated as provided in the Petrenko Agreement, and be automatically extended
for additional one-year periods unless terminated by Mr. Petrenko or a majority
vote of the Board of Directors. Mr. Petrenko’s base salary is $150,000 per
year, subject to adjustment by the Board of Directors, and he will be entitled
to participate in the Company’s executive bonus program, as such program may be
adopted in the future.
In the
event of an “Involuntary Termination,” as defined in the Petrenko Agreement, Mr.
Petrenko will be entitled to nine (9) months’ severance and an amount equal to
the average of any bonuses paid to him during the two preceding fiscal
years. In the event of a “Change in Control” or “Termination for
Disability,” as defined in the Petrenko Agreement, Mr. Petrenko will be entitled
to eighteen (18) months’ severance.
Under the
Petrenko Agreement, Mr. Petrenko agreed to certain confidentiality,
non-competition, and non-solicitation covenants with respect to the
Company.
The
foregoing description of the Petrenko Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the Petrenko
Agreement, which is filed as Exhibit 10.4 to this Current Report on Form 8-K,
the terms of which are incorporated herein by reference.
Appointment of Rufina
Bulatova as Vice President - Online Marketing
Effective
January 27, 2011, the Board of Directors appointed Rufina Bulatova, age 33, as
Vice President, Online Marketing. Ms. Bulatova is currently the Vice
President of WMI, a position she has held since 2007, overseeing online
marketing, product catalog, direct marketing, and co-op advertising
programs. Ms. Bulatova joined WMI in 2003 as a .NET developer and became
the Lead Project Manager responsible for website user experience in 2004.
Ms. Bulatova holds a Master Degree in Computer Science from Ufa State Technical
University (Russia).
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(e)
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Compensatory
Arrangements of Certain
Officers
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On
January 27, 2011, the Company entered into an employment agreement with Fyodor
Petrenko, as described above in this Item 5.02. Reference is made to
Item 5.02(c), which is incorporated herein and which summarizes the terms of the
Petrenko Agreement.
Effective
January 27, 2011, the Company entered into an employment agreement with Louis S.
Friedman (the “Friedman Agreement”) regarding his continued employment as
President and Chief Executive Officer of the Company. The Friedman
Agreement will expire on December 31, 2011, unless earlier terminated as
provided in the Friedman Agreement, and be automatically extended for additional
one-year periods unless terminated by Mr. Friedman or a majority vote of the
Board of Directors. Mr. Friedman’s base salary is $150,000 per year,
subject to adjustment by the Board of Directors, and he will be entitled to
participate in the Company’s executive bonus program, as such program may be
adopted in the future.
In the
event of an “Involuntary Termination,” as defined in the Friedman Agreement, Mr.
Friedman will be entitled to nine (9) months’ severance and an amount equal to
the average of any bonuses paid to him during the two preceding fiscal
years. In the event of a “Change in Control” or “Termination for
Disability,” as defined in the Friedman Agreement, Mr. Friedman will be entitled
to eighteen (18) months’ severance.
Under the
Friedman Agreement, Mr. Friedman agreed to certain confidentiality,
non-competition, and non-solicitation covenants with respect to the
Company.
The
foregoing description of the Friedman Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the Friedman
Agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K,
the terms of which are incorporated herein by reference.
On
January 31, 2011, the Company issued a press release announcing the executive
appointments described in Item 5.02(c), above. A copy of the press release
is furnished as Exhibit 99.3 to this report.
In
accordance with General Instruction B.2 of Form 8-K, the information in Item
7.01 of this Current Report on Form 8-K, including Exhibit 99.3, shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to the
liabilities of that section, and shall not be incorporated by reference into any
registration statement or other document filed under the Securities Act or the
Exchange Act, except as shall be expressly set forth by specific reference in
such filing.
Item 9.01
Financial Statements and Exhibits
(a) Financial statements of businesses
acquired
The
historical consolidated financial statements of Web Merchants, Inc. required to
be filed by this Item are included as Exhibits 99.1 and 99.2 to this Current
Report on Form 8-K.
(b) Pro forma financial
information
The pro
forma financial statements required by Item 9.01(b) of Form 8-K will be filed
with the SEC under cover of Form 8-K/A as soon as practicable, but in no event
later than seventy-one (71) days after the date on which this initial
report on Form 8-K is required to be filed.
(d)
Exhibits
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Exh. No.
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Description
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2.1
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Stock
Purchase Agreement, dated January 27, 2011
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10.1
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Registration
Rights Agreement between the Company and Dmitrii Spetetchii, dated January
27, 2011
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10.2
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Voting
Agreement between the Company, Louis S. Friedman, and Fyodor Petrenko,
dated January 27, 2011.
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10.3
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Employment
Agreement between the Company and Louis S. Friedman dated January 27,
2011.
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10.4
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Employment
Agreement between the Company and Fyodor Petrenko, dated January 27,
2011
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23.1
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Consent
of Gruber & Company
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99.1
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Audited
consolidated balance sheets of Web Merchants, Inc. as of December 31, 2009
and 2008, and the related audited consolidated statements of operations,
stockholders’ equity, and cash flows for each of the two years in the
period ended December 31, 2009.
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99.2
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Unaudited
condensed consolidated balance sheet of Web Merchants, Inc. as of
September 30, 2010, and the related unaudited condensed consolidated
statements of operations for the three and nine months ended September 30,
2010 and 2009 and statements of cash flows for the nine months ended
September 30, 2010 and 2009.
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99.3
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Press
release dated January 31,
2011.
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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 hereunto
duly authorized.
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WES
Consulting, Inc.
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(Registrant)
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Date:
February 2, 2011
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By:
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/s/
Ronald P. Scott
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Ronald
P. Scott
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Chief
Financial Officer
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