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): May 31, 2013

SELECTICA, INC. 

(Exact name of Company as specified in Charter)

2121 South El Camino Real

San Mateo, California 94403

(Address of Principal Executive Offices)

(650) 532-1500
(Issuer Telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions (see General Instruction A.2 below).

Purchase Agreement and Subscription Agreement

On May 31, 2013, Selectica, Inc. (the “Company”) entered into a Purchase Agreement (the “Purchase Agreement”) with certain institutional funds and other accredited investors (the “Outside Investors”), and entered into a Subscription Agreement (the “Subscription Agreement”) with certain members of the Company’s management and board of directors (the “Management and Director Investors” and, together with the Outside Investors, the “Investors”), pursuant to which the Company (i) sold and issued 577,105 shares of its common stock (the “Common Shares”), par value $0.0001 per share (“Common Stock”), and 231,518 shares of its newly created Series C Convertible Preferred Stock, par value $0.0001 per share (the “Series C Stock”), to the Outside Investors at a purchase price of $7.00 per share in an initial closing that occurred on May 31, 2013 (the “First Closing”) and, (ii) subject to stockholder approval, will sell and issue 100,144 additional Common Shares to the Management and Director Investors at a purchase price of $7.00 per share immediately after such stockholder approval is obtained (the “Second Closing”). The transactions described in this Current Report on Form 8-K are described collectively as the “Financing.” The Financing was approved by an independent committee of the Company’s Board of Directors.

Filing of Certificate of Designation for Series C Stock

Pursuant to the Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock filed by the Company with the Delaware Secretary of State on May 30, 2013 (the “Certificate of Designation”), after stockholder approval, each share of Series C Stock will be convertible automatically into shares of Common Stock at an initial conversion price of $7.00 per share of Common Stock. The conversion price of the Series C Stock is subject to broad-based weighted-average anti-dilution adjustment in the event the Company issues securities, other than certain excepted issuances and subject to certain limitations, at a price below the then current conversion price.

The Series C Stock is not entitled to a liquidation or dividend preference. Beginning on January 1, 2014, the Series C Stock is entitled to 10% accruing dividends per annum. The dividends are payable quarterly in cash, beginning on March 31, 2014. Beginning on May 31, 2014, the shares of Series C Stock shall be redeemed by the Company upon the request of the holders of at least a majority of the then outstanding Series C Stock, to the extent funds are legally available for such redemption. The redemption price shall equal a price per share of Series C Stock equal to the then current conversion price, plus any accrued and unpaid dividends up to, but not including, the redemption date.

The holders of Series C Stock have the right to vote together with the holders of the Company’s Common Stock as a single class on any matter on which the holders of Common Stock are entitled to vote, except that the holders of Series C Stock are not eligible to vote their shares of Series C Stock on the proposal to be submitted to the Company’s stockholders for approval of the issuance and sale of the securities in the Financing and the conversion of the Series C Stock. Holders of Series C Stock are entitled to cast a fraction of one vote for each share of Common Stock that would be issuable to such holder on the record date for the determination of stockholders entitled to vote at a conversion rate the numerator of which is $7.00 (as may be adjusted for any subdivision by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or similar event occurring prior to such record date) and the denominator of which is the closing bid price per share of the Common Stock on the May 31, 2013, as reported by Bloomberg Financial Markets.

Warrants

In addition to the issuance of the Common Shares and Series C Stock, at the First Closing the Company issued to each Outside Investor a Series A Warrant to purchase Common Stock (the “Series A Warrants”), initially exercisable for a number of shares of Common Stock equal to 50% of the number of Common Shares and shares of Common Stock underlying the Series C Stock acquired by each such Outside Investor. Pursuant to the Subscription Agreement, the Company will issue Series B Warrants to purchase Common Stock (the “Series B Warrants” and, together with the Series A Warrants, the “Warrants”) to the Management and Director Investors at the Second Closing, initially exercisable for a number of shares of Common Stock equal to 50% of the number of Common Shares acquired by each such Management and Director Investor. The exercise price of the Warrants is $8.75 per share. The Warrants have a five-year term, are not exercisable for the first six months following the date of issuance and include a cashless exercise provision which is only applicable if the Common Stock underlying the Warrants (the “Warrant Shares”) is not subject to an effective registration statement or otherwise cannot be sold without restriction pursuant to Rule 144. The number of Warrant Shares and the exercise price for each Warrant are subject to broad-based weighted-average anti-dilution adjustment in the event the Company issues securities, other than certain excepted issuances, at a price below the then current exercise price, subject to certain limitations. .

In connection with the Financing, the Company will issue to Lake Street Capital Markets, LLC, who served as the placement agent in the Financing, warrants to purchase an aggregate of 27,263 shares of Common Stock, which represents 3% of the total number of Common Shares and shares of Series C Stock sold in the Financing.

Registration Rights Agreement

The Common Shares, Conversion Shares and Warrant Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. In connection with Financing, however, the Company has entered into the Registration Rights Agreement with the Outside Investors.

Voting Agreements

In connection with the Financing, certain of the Company’s officers and directors and the Company’s largest stockholder entered into Voting Agreements (collectively, the “Voting Agreements”). Pursuant to the Voting Agreements, the parties thereto have agreed to vote in favor of the Financing at the next annual stockholder meeting (as described below). Pursuant to the terms of the Purchase Agreement and Subscription Agreement, the Company must seek stockholder approval by September 15, 2013.

In connection with the Financing, the Committee determined that the issuance of the Common Shares, the Series C Stock and Warrants and the Common Stock underlying the Series C Stock and Warrants would not jeopardize the value of the Company’s net operating loss carry forwards and as a result, provided an exemption for the Financing such that the issuance will not trigger the provisions of the Amended and Restated Rights Agreement between the Company and Wells Fargo Bank, N.A., as Rights Agent, dated January 2, 2009, as amended (the “Rights Agreement”). All other provisions of the Rights Agreement will otherwise remain in effect.

The information set forth above is qualified in its entirety by reference to the actual terms of the Certificate of Designation, the Purchase Agreement, the Subscription Agreement, the Registration Rights Agreement, the Series A Warrant, the Series B Warrant, and the Voting Agreements to be filed subsequently as exhibits with the Securities and Exchange Commission.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The sale and issuance of the Common Shares and Series C Stock to the Investors at the First Closing, the sale and issuance of the Common Shares at the Second Closing, the issuance of the Warrants at the First Closing and the Second Closing, and the issuance of shares of Common Stock upon exercise and conversion thereof, have been determined to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The Investors have represented that they are accredited investors, as that term is defined in Regulation D, and that they are acquiring the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03. On May 30, 2013, the Company filed with the Delaware Secretary of State a Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock that created the new Series C Stock, authorized 231,518 shares of Series C Stock and designated the preferences, rights and limitations of the Series C Stock, as described in Item 1.01 of this Current Report on Form 8-K.

On June 3, 2013, the Company issued a press release announcing the Financing. A copy of the press release is furnished herewith as Exhibit 99.1.

The information contained in this Item 7.01 and in Exhibit 99.1 attached to this report is being furnished to the SEC and shall not be deemed “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, or incorporated by reference in any filing under the Exchange Act or the Securities Act, except as shall be expressly set forth by specific reference in such a filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 3, 2013

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