Attached files
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| EX-10.1 - AGREEMENT - VelaTel Global Communications, Inc. | velatel_8ka1-ex1001.htm |
| EX-99.1 - PRESS RELEASE - VelaTel Global Communications, Inc. | velatel_8ka1-ex9901.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
October 21, 2011
Date of Report (date of Earliest Event Reported)
VELATEL GLOBAL COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
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NEVADA
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98-0489800
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(State or Other Jurisdiction of
Incorporation or Organization)
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(Commission File No.)
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(I.R.S. Employer
Identification No.)
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12526 High Bluff Drive, Suite 155, San Diego, CA 92130
(Address of principal executive offices and zip code)
(760) 230-8986
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed from 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))
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Explanatory Note
The purpose of this amended Current Report on Form 8-K/A (“Form 8-K/A”) is solely to correct or make reference to certain typographical and other non-substantive errors contained in the original Current Report on Form 8-K (“Form 8-K”) that was filed on October 25, 2011, including errors contained in the exhibits filed with the Form 8-K. The errors are summarized as follows:
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The correct full corporate name of the party who entered into the transaction with the Company that is disclosed in the Form 8-K is “New Generation Special Network Communication Technology Co., Ltd.” The shorthand reference to the name in all documents is consistently “NGSN,” which is the correct shorthand reference by which the party is referred in its own corporate logo, website and other materials (“NGSN” herein).
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NGSN is erroneously referred to as “Next Generation Systems Technology Communications Co., Ltd. in two instances in the Form 8-K, specifically the first unnumbered paragraph under Item 1.01 and the description of the Business Agreement (“Agreement”) that is referred to as Exhibit 10.1 under Item 9.01.
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NGSN is erroneously referred to as “Next Generation Special Network Communications Technology Co., Ltd.” in two instances in the Agreement itself (Exhibit 10.1 of the Form 8-K). This error exists in the original Agreement the parties executed. The Agreement was written in both Mandarin and English and the Mandarin rendition of NGSN’s name is correct. The parties do not intend to revise and re-execute the Agreement, since their mutual intent as to the correct contracting party is clear.
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NGSN is erroneously referred to as “Next Generation Special Network Communication Technology Co., Ltd.” in the Press Release that is attached as Exhibit 99.1 to the Form 8-K. This error exists in the original Press Release. The Company does not intend to re-issue the Press Release to correct this error, except the version of the Press Release posted on the Company’s website.
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The Press Release, as originally issued and as attached as Exhibit 99.1 to the Form 8-K, refers to NGSN’s website as “www.ngsn-china.com.” Although this website address displays a home page from which some readers can navigate to a Mandarin only version of NGSN’s website, the link may not work with all internet browser applications. An alternative link that provides readers a choice of either Mandarin or English content is “www.newgsn.com.cn.” The Company does not intend to re-issue the Press Release to correct this error, except the version of the Press Release posted on the Company’s website.
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Item 1.01, numbered paragraph 6 of the Form 8-K states certain milestone dates by which the parties, using their respective best efforts, expect to complete follow up actions identified in the Agreement, including the erroneous statement: “NGSN shall secure the radio frequency licenses by end of March 2011.” The correct date for this milestone, as set forth in the Agreement, is “by end of March 2012.”
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Set forth below is the amended text of the Form 8-K/A. The documents attached as Exhibits to this Form 8-K/A have not been amended, and therefore still contain the errors disclosed above.
Item 1.01 Entry into Material Definitive Agreement
On October 21, 2011, VelaTel Global Communications, Inc., a Nevada corporation and the registrant responsible for the filing of this Form 8-K (“the Company”) and New Generation Special Network Communication Technology Co., Ltd. (“NGSN”), a limited liability company organized under the laws of the People’s Republic of China (“PRC”), entered into a Business Agreement (“Agreement”). The material terms of the Agreement are as follows (capitalized terms are as defined in the Agreement):
1. VelaTel, through one of its subsidiaries, shall establish a holding company organized in the Cayman Islands (“Cayman Co”). Cayman Co shall have a wholly owned subsidiary organized in Hong Kong (“HK Co”). HK Co shall have a wholly owned subsidiary organized in Beijing, PRC, that also qualifies as a wholly foreign owned enterprise under PRC law (“WFOE,” Cayman Co, HK Co and WFOE collectively, “New Co”). WFOE shall be licensed to provide the services contemplated under the Agreement. The board of directors of Cayman Co shall be comprised of three directors, two of whom shall be designated by VelaTel (including the Chairman) and one of whom shall be designated by NGSN. HK Co and WFOE shall each have one executive director, who shall be designated by VelaTel.
2. NGSN holds a PRC-issued license to provide value added telecom and information services nationwide in the PRC. Such authorized services include internet information service, location based service and advertising service to government, enterprise and individual customers, e.g. fleet tracking by GPS, tracking people with Alzheimer disease, tracking children and pets, meter reading services, video surveillance service, trading services, distance education, and agriculture information. NGSN has the ability to obtain and shall apply for PRC-issued licenses to use radio frequency spectrum in the 1.8GHz and 3.5GHz bandwidth, and has special authorizations for the deployment of wireless broadband access (“WBA”) networks. NGSN shall authorize one of its subsidiary companies (“NGSN’s Subsidiary”) to carry out the telecom service business (“Business”) that is covered by NGSN’s existing and future telecom business related licenses (collectively “Telecom Licenses”). The Business of NGSN’s Subsidiary shall focus on the following territories: Heilongjiang Province, Jiangsu Province, Guangxi Autonomous Region, Guangzhou City, and Chongqing City (collectively “Business Territory”). The Parties may broaden the Business Territory through discussion.
3. NGSN’s Subsidiary and WFOE shall enter into one or more agreements for WFOE to act as the exclusive contractor for NGSN’s Subsidiary to provide deployment management, operation management and other services related to the Business (collectively “Service Agreement”). WFOE and/or VelaTel shall pay capital expenditures, operating expenditures and other negative cash flow in connection with the Business for NGSN’s Subsidiary. In principal, the total investment to be made by WFOE and/or VelaTel (including third-party financing), shall be no less than US$10million for each municipality and provincial capital city, and US$8million for any other city. The actual investment intensity and schedule shall comply with a Business Plan to be jointly prepared by NGSN’s Subsidiary and WFOE. NGSN’s Subsidiary shall pay a service fee to WFOE, the calculation and payment terms of which shall be stipulated in the Service Agreement. The revenue of NGSN’s Subsidiary shall be used in priority to reimburse WFOE and/or VelaTel for any amounts paid for by either of them, and to repay any financing arranged by WFOE and/or VelaTel. To ensure the repayment of WFOE’s financing and payment of service fees to WFOE, to the maximum extent authorized by PRC law, the revenue of NGSN’s Subsidiary shall flow directly from the customers to WFOE. If in case some revenues must be paid to NGSN’s Subsidiary in order to comply with PRC law, it shall be paid to a special account of NGSN’s Subsidiary that is jointly controlled by NGSN’s Subsidiary and WFOE. The shareholders of NGSN’s Subsidiary shall pledge their shares in NGSN’s Subsidiary to WFOE as collateral for this repayment obligation.
4. VelaTel and NGSN shall enter into a Shareholders and Share Subscription Agreement (“Subscription Agreement”), according to which NGSN shall be entitled to obtain up to 45% of the shares of Cayman Co. 25% of the shares of Cayman Co shall be issued to NGSN after the execution of the Shareholders and Share Subscription Agreement, 10% after NGSN obtains licenses to use 3.5GHz spectrum in the Business Territory or other spectrum that is suitable for the Business, and the remaining 10% when New Co is approved for public listing on a stock exchange. In exchange for shares in Cayman Co, NGSN shall ensure the continuous validity of its Telecom License during the term of operation of the New Co, and shall use its best efforts to obtain additional Telecom Licenses, to secure NGSN’s Subsidiary’s exclusive right of use of its Telecom Licenses, and the effective performance of the Service Agreement. Based on the success in obtaining additional Telecom Licenses and the revenue of New Co, NGSN shall be entitled to issuance of Series A common stock of VelaTel, in amounts and based on milestones which shall be detailed in the Subscription Agreement.
5. As part of its capital contribution for its interest in New Co, VelaTel shall transfer to WFOE its resources concerning the design, planning and engineering works of wireless broadband network in 29 major cities throughout China. NGSN’s Subsidiary and/or WFOE shall have the right to use such resources when the Business of NGSN’s Subsidiary is expanded to relevant cities.
6. The Parties shall use their respective best efforts to complete follow up actions identified in the Agreement by the following dates: (1) VelaTel shall create the entities comprising New Co by end of December 2011, (2) the Parties shall draft, negotiate and sign the Services Agreement and Subscription Agreement by end of December 2011, (3) NGSN shall secure the radio frequency licenses by end of March 2012, and (4) the Parties shall use their best efforts to have New Co be listed in a domestic or overseas stock market in about three years.
A fully executed copy of the Agreement is attached hereto and incorporated by this reference as Exhibit 10.1 to this Form 8-K/A (including internal Annex 1, NGSN’s existing SP license, and Annex 2, list of 29 cities regarding engineering work already performed).
On October 25, 2011, the Company issued a press release announcing the signing of the Agreement. A copy of the press release is attached hereto and incorporated by this reference as Exhibit 99.1 to this Form 8-K/A.
Item 9.01 Exhibits
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10.1
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Business Agreement between VelaTel Global Communications, Inc. and New Generation Special Network Communication Technology Co., Ltd.
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99.1
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Press Release
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VelaTel Global Communications, Inc., | |||
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Date: October 26, 2011
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By:
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/s/ George Alvarez | |
| Name: George Alvarez | |||
| Title: Chief Executive Officer | |||