form8k.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): (August 20, 2008)
ESPRE
SOLUTIONS, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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000-51577
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68-0576847
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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5700
W. Plano Parkway, Suite 2600, Plano, Texas 75093
(Address
and zip code of principal executive offices)
Registrant’s
telephone number, including area code: (214) 254-3708
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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Item
1.01
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Entry into a Material
Definitive Agreement.
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On August
20, 2008, Espre Solutions, Inc. (the “Company”) entered into a convertible
secured promissory note and loan agreement (the “Note”) with Dalcor, Inc., a
corporation organized under the laws of the Republic of Panama (“Dalcor”),
pursuant to which the Company borrowed from Dalcor $5,000,000 in cash (the
“Principal Amount”) with interest at a rate of 6.0% per annum and a maturity
date of August 20, 2016 (the “Transaction”). Interest on the
Note shall be made in cash or, at Dalcor’s option, in shares of Common Stock of
the Company (“Common Stock”). The first three months of interest were
prepaid upon closing the Transaction.
The Note
is convertible, at the option of Dalcor, up to the full Principal Amount, into
shares of the Company’s Series C Preferred Stock, par value $0.001 per share
(the “Series C Preferred Stock”). The number of shares of Series C
Preferred Stock into which the Note may be converted is equal to the dollar
amount of the Note being converted divided by a conversion price of
$1.00.
The Note
may not be prepaid without the written consent of Dalcor. The Company
is obligated to prepay the Principal Amount, together with all accrued and
unpaid interest, fees and other amounts due and payable pursuant to the Note if
the Company sells, exclusively licenses, conveys, assigns, leases, abandons or
otherwise transfers or disposes of any of its properties or assets, unless (i)
such transaction is in the ordinary course of the Company’s business, (ii) the
proceeds of such transaction are paid to Dalcor, or (iii) with the prior written
consent of Dalcor. The Note grants to Dalcor anti-dilution rights in
the event the Company enters into a corporate transaction and the right of first
refusal in the event the Company desires to issue any securities of the Company
or enter into any new indebtedness. If an event of default occurs and
is continuing, Dalcor may rescind any outstanding conversion notice and declare
any and all amounts owing under the Note immediately due and payable at a price
of 118% of the Principal Amount, together with all accrued and unpaid interest
thereon.
The Note,
any Series C Preferred Stock deliverable upon conversion of the Note and any
Common Stock received as interest under the Note, have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered or sold absent registration under the Securities Act or an applicable
exemption from registration under the Securities Act.
As
indicated above, the Company issued a convertible promissory note to an
accredited investor, Dalcor, in a private transaction. The Company
did not use any underwriters nor did it use any form of advertising or general
solicitation in connection with the sale of the Note. The sale of the
Note was made in reliance on an exemption provided by Section 4(2) of the
Securities Act.
In
connection with the Transaction, the Company and Dalcor entered into a security
agreement (the “Security Agreement”) on August 20, 2008, pursuant to which the
Company granted Dalcor a security interest in all of the Company’s personal
property to secure the Company’s obligations under the Note. Also in
connection with the Transaction, the Company and Dalcor entered into a pledge
agreement (the “Pledge Agreement”) on August 20, 2008, pursuant to which the
Company granted Dalcor a first-priority security interest in all of the shares
of common stock of Blideo, Inc., a Texas corporation, held by the Company and
certain indebtedness owed to the Company to secure the Company’s obligations
under the Note. Also in connection with the transaction, the Company
and Dalcor entered into a registration rights agreement on August 20, 2008,
pursuant to which the Company granted Dalcor demand and piggyback registration
rights with respect to the Note and the Series C Preferred Stock issued upon
conversion of the Note.
The
description of the private placement in this Current Report on Form 8-K does not
purport to be complete and is qualified in its entirety by reference to the
Note, the Security Agreement and the Pledge Agreement (the “Transaction
Documents”) filed as exhibits to this Current Report on Form 8-K and
incorporated herein by reference. The Transaction Documents have been
included to provide investors and security holders with information regarding
their terms. They are not intended to provide any other factual
information about the Company. The Transaction Documents contain
certain representations and warranties and indemnifications resulting from any
breach of such representations and warranties. Investors and security
holders should not rely on the representations and warranties as
characterizations of the actual state of facts because they were made only as of
the respective dates of the Transaction Documents. In addition,
information concerning the subject matter of the representations and warranties
may change after the respective dates of the Transaction Documents, and such
subsequent information may not be fully reflected in the Company’s public
disclosures.
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Item
1.02
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Termination of a Material
Definitive Agreement.
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On July
15, 2008, the Company entered into a securities purchase agreement (the
“Purchase Agreement”) with La Jolla Cove Investors, Inc. (“La Jolla”), pursuant
to which the Company sold a private placement convertible debenture (the
“Debenture”) to La Jolla. The Debenture was for gross proceeds of
$2,000,000 (the “Debenture Amount”), of which $250,000 was paid by La Jolla at
the closing of the Purchase Agreement and the balance of $1,750,000 was payable
by a promissory note (the “La Jolla Note”) due January 30, 2011. The
Debenture accrued interest on the Debenture Amount at a rate of 6% per
annum. The Debenture was convertible into shares of Common
Stock.
In
connection with the Transaction, on August 20, 2008, the Company provided notice
of redemption (the “Notice of Redemption”) of the Debenture issued to La Jolla
to redeem, terminate and pay in full the Debenture. A payment of 100%
of the outstanding principal amount of the Debenture plus accrued and unpaid
interest was made by the Company to La Jolla in connection with the Notice of
Redemption.
In
connection with the Transaction, on August 20, 2008, the Company and Nonsuch
Holdings Ltd. (“Nonsuch”) cancelled and terminated that certain promissory note
in the principal amount of $100,000 (the “Nonsuch Note”), which was issued by
the Company to Nonsuch on July 29, 2008. In exchange for cancellation
and termination of the Nonsuch Note, the Company transferred 104,167 shares of
common stock of Blideo, Inc., a Texas corporation, owned beneficially and of
record by the Company to Nonsuch. Nonsuch is an affiliate of, and is
owned and controlled by Peter Leighton.
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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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The
information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference in response to this Item 2.03.
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Item
3.02
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Unregistered Sales of Equity
Securities.
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The
information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference in response to this Item 3.02.
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Item
3.03
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Material Modification to
Rights of Security Holders.
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On August
22, 2008, the Company filed a Certificate of Withdrawal (the “Certificate of
Withdrawal”) with respect to its Series B Preferred Stock, none of which was
then issued or outstanding.
On August
25, 2008, the Company filed a Certificate of Designation (the “Certificate of
Designation”) for its Series C Preferred Stock establishing the rights,
preferences, privileges, qualifications, restrictions and limitations relating
to the Series C Preferred Stock, of which 5,000,000 shares are authorized, none
of which are issued or outstanding but all of which are reserved for issuance
upon conversion of the outstanding principal amount of the Note.
The
holders of the Series C Preferred Stock shall be entitled to receive a dividend
and distribution equal to the product of 100 multiplied by the dividend or
distribution to be received by each share of Common Stock, including any amount
received in a merger transaction, sale of the Company’s assets or similar
transaction. Holders of the Series C Preferred Stock shall be
entitled to 100 votes for each share of Series C Preferred Stock held with
respect to any and all matters presented to the stockholders of the Company for
their action. The consent of the holders of a majority of the Series C Preferred
Stock, voting separately as a class, shall be necessary for the Company to (i)
increase the share capital of the Company or authorize or issue any securities
or rights to subscribe for or convert into or call for the issue of any
additional securities not outstanding on the date of the Certificate of
Designation, (ii) declare or pay any dividends or other distributions upon any
of its securities, or to redeem or purchase or otherwise acquire any of the
Company’s securities or (iii) grant or award any registration
rights. Each share of the Series C Preferred Stock shall be deemed
converted into 100 shares of Common Stock and shall participate pari passu with
the Common Stock in the proceeds available to the Company’s shareholders upon
the liquidation, dissolution, or winding up of the Company.
Pursuant
to the Note, the Note may be converted into shares of Series C Preferred Stock,
in whole or in part at any time at the option of Daclor.
The
Certificate of Withdrawal and the Certificate of Designation are filed as
exhibits to this Current Report on Form 8-K and are incorporated by reference
herein.
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Item
5.01
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Changes in Control of
Registrant.
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On August
20, 2008, the Company entered into the Note with Dalcor, pursuant to which the
Company borrowed from Dalcor $5,000,000 in cash with interest at a rate of 6.0%
per annum and a maturity date of August 20, 2016. The source of the
funds comes from Dalcor’s cash on hand. The Note is convertible, at
the option of Dalcor, up to the full Principal Amount, into the Series C
Preferred Stock. The number of shares of Series C Preferred Stock
into which the Note may be converted is equal to the dollar amount of the Note
being converted divided by a conversion price of $1.00. In the event
that Dalcor exercises its conversion rights under the Note and converts the full
Principal Amount into Series C Preferred Stock, Daclor will own beneficially and
of record 5,000,000 shares of Series C Preferred Stock. Holders of the
Series C Preferred Stock shall be entitled to receive a dividend and
distribution equal to the product of 100 multiplied by the dividend or
distribution to be received by each share of Common Stock, including any amount
received in a merger transaction, sale of the Company’s assets or similar
transaction. Holders of the Series C Preferred Stock shall be
entitled to 100 votes for each share of Series C Preferred Stock held with
respect to any and all matters presented to the stockholders of the Company for
their action.
As of
August 12, 2008, 355,640,130 shares of Common Stock were issued and
outstanding. In the event that Daclor converts the Note for 5,000,000
shares of Series C Preferred Stock, with voting and preferential rights of
100/1, Daclor will own approximately 58.43% of the Company’s voting power and
economic benefits, which will result in a change of control of the
Company. The Peninsula Group, which holds approximately 10.2% of the
Company, is currently the controlling shareholder.
Pursuant
to the Note, the Company and Dalcor agree that so long as the Note remains
outstanding, two of the three Board members shall be representatives of
Dalcor.
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Item
5.02
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Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain
Officers.
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On August
21, 2008, Peter Leighton resigned from the office of President and as a director
of the Company. On August 21, 2008, Peter Ianace resigned from the
office of Chief Executive Officer of the Company. On August 21, 2008,
the Board expanded the size of the Board to three persons and appointed William
Hopke and Oliver Chappaz as directors to fill the newly created
vacancies.
On August
21, 2008, the Board approved the appointment of Peter Ianace as Chairman of the
Board of the Company and William Hopke as President and Chief Executive Officer
of the Company, each effective immediately. The annual compensation
for each of Mr. Ianace and Mr. Hopke will be $198,000. There is
currently no bonus program.
Mr.
Chappaz is 33 years old and has served as a partner at the law firm of Hornung
Hovagemyan Avocats in Geneva, Switzerland since March 2008. From
March 2005 to February 2008, Mr. Chappaz served as a director at UBS SA in
Geneva, Switzerland. From July 2003 to February 2005, Mr. Chappaz
served as an Estate Planning Officer at Royal Bank of Canada (Suisse) SA in
Geneva, Switzerland. From January 2001 to June 2003, Mr. Chappaz was
employed with UBS SA in Geneva, Switzerland. As of August 16, 2008,
Mr. Chappaz was an officer or a beneficial owner of 10% or more of a company
that owns shares of the Company’s Common Stock. On May 15, 2008,
Surecast Media, Inc. (“Surecast”) purchased a license from the Company for an
aggregate amount of $1,000,000. At the time of the purchase by
Surecast, Mr. Chappaz was a director of Surecast. Mr. Chappaz is no
longer a director of Surecast.
Mr. Hopke
is 52 years old and has been self employed in the investment banking services
industry since October 2007. From May 2003 to September 2007, Mr.
Hopke served as Vice President Business Development for Software Performance
Systems in Clinton, Maryland. From January 2002 to April 2003, Mr.
Hopke served as Chief Executive Officer of Teetimes.com in Williamsburg,
Virginia. As of August 16, 2008, Mr. Hopke owned and had registered
in his name 183,789 shares of the Company’s Common Stock. As of
August 16, 2008, Mr. Hopke’s spouse owned 11,200 shares of the Company’s Common
Stock, as to which Mr. Hopke disclaims any beneficial ownership. As
of August 16, 2008, Mr. Hopke’s adult children, who do not have the same home as
Mr. Hopke, owned 84,512 shares of the Company’s Common Stock, as to which Mr.
Hopke disclaims any beneficial ownership. Mr. Hopke has received
advisory fees in the aggregate amount of $18,000 from the Company other than as
in his capacity as a member of the Board or any committee of the
Board. From 1993 to 1996, Mr. Hopke served on the board of directors
of Organogenesis, Inc. From 1992 to 1996, Mr. Hopke served on the
board of directors of Columbia Labs. From 1986 to 1994, Mr. Hopke
served on the board of directors for Dominion Capital.
Mr.
Ianace has served as the Company’s Chief Executive Officer and as a director of
the Company, and its predecessor Espre Texas, since July 2004. He
served in the same capacity from its organization in December 2003 until its
merger with the Company in July 2004. From April 2001 to November
2003, Mr. Ianace was Chief Executive Officer of Vianet Technologies, Inc., a
company engaged in video software application and VOIP services. He
served as executive Vice President of Business Development for Vianet from June
1989 to April 2001. Mr. Ianace served as the President and Chief
Executive Officer of Intelect Network Technologies from April 1995 until April
1999, where he managed the growth and integration of worldwide sales and product
development and was responsible for equity capitalization and strategic
relationship building and partnering. Mr. Ianace graduated from
Newburgh Free Academy in 1966 and attended St. John’s University from
1966-1968.
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Item
5.03
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Amendments to Articles of
Incorporation or Bylaws; Change in Fiscal
Year.
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On August
22, 2008, the Company filed a Certificate of Withdrawal with respect to its
Series B Preferred Stock, none of which was then issued or outstanding, and
filed a Certificate of Designation for its Series C Preferred Stock establishing
the rights, preferences, privileges, qualifications, restrictions and
limitations relating to the Series C Preferred Stock, of which 5,000,000 shares
are authorized, none of which are issued or outstanding but all of which
are reserved for issuance upon conversion of the outstanding principal amount of
the Note.
On August
18, 2008, the Board approved the following amendments to the Amended and
Restated Bylaws (the “Bylaws”) of the Company:
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Article
I, Section 1.8 was amended to change the definition of a quorum for
stockholder action at any meeting to the outstanding shares representing a
majority of the voting power
outstanding.
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·
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Article
9 was added to allow the Company to opt out of the requirements imposed by
Nevada Revised Statutes Section 78.378 and Section
78.3793.
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·
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Article
3, Section 3.1, Section 3.2.1(b) and Section 3.2.2 were amended so as to
remove the Chairman of the Board as an executive officer of the
Company.
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A copy of
the amendments to the Bylaws as set forth above is filed as an exhibit to this
Current Report on Form 8-K and is incorporated by reference herein.
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Item
9.01
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Financial Statements and
Exhibits.
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Exhibit
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Description
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Certificate
of Withdrawal of Certificate of Series B Preferred Stock filed August 22,
2008.
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Certificate
of Designation of Series C Preferred Stock filed August 25,
2008
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Amendments
to the Byalws
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Convertible
Secured Promissory Note and Loan Agreement, dated as of August 20, 2008,
by and between Espre Solutions, Inc., as issuer, and Dalcor,
Inc.
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Security
Agreement, dated as of August 20, 2008, by and between Espre Solutions,
Inc. and Dalcor, Inc.
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Pledge
Agreement, dated as of August 20, 2008, by and between Espre Solutions,
Inc. and Dalcor, Inc.
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Promissory
Note Exchange Agreement dated as of August 20, 2008, by and between
Nonsuch Holdings Ltd. and Dalcor,
Inc.
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SIGNATURE
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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ESPRE
SOLUTIONS, INC..
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(Registrant)
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Date:
August 26, 2008
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By:
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William Hopke
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President
and Chief Executive Officer
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