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U.S. 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):
OCTOBER 12, 2000 (SEPTEMBER 27, 2000)
PLUS SOLUTIONS, INC.
(Exact Name of Registrant as Specified in Charter)
NEVADA 000-28331 88-0412455
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
14677 MIDWAY ROAD, SUITE 206, ADDISON, TEXAS, U.S.A.
(Address of principal executive offices)
75001
(Zip Code)
972-687-0090
(Registrant's telephone number, including area code)
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ITEM 5. OTHER ITEMS
On September 27, 2000, we entered into a Subscription Agreement with
four investors, The Keshet Fund L.P., Keshet L.P., Nesher Ltd., and Talbiya B.
Investments Ltd, which provided for an $8.5 million long-term financing
commitment. The financing was arranged by KCM Ltd., a New York, New York
investment firm. Upon the execution of the Subscription Agreement, we initially
sold to the investors a total of $500,000 of our 8% Convertible Notes for a
purchase price equal to the principal amount of each note. Each investor
purchased an 8% Convertible Note in the amount set forth below:
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The Keshet Fund L.P. ...................... $110,000
Keshet L.P. ............................... 215,000
Nesher Ltd. ............................... 85,000
Talbiya B. Investments Ltd. ............... 90,000
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TOTAL ..................................... $500,000
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The full principal amounts of the Convertible Notes must be paid on September
27, 2003. The Convertible Notes incur interest at the rate of 8% per year, which
interest is paid quarterly. The Convertible Notes are a general obligation Plus
Solutions and payment of principal and interest under the notes is not secured
by any specific assets.
The offering of securities to the investors was a private offering made
in reliance on Rule 506 of Regulation D under the United States Securities Act.
Each of the investors represented to us in the Subscription Agreement that it
qualifies as an accredited investor under Regulation D.
PURCHASE OF ADDITIONAL NOTES
We have the right to require the investors to purchase additional
Convertible Notes. In order to exercise this right, we must meet several
conditions, among which are:
o we have an effective registration statement under the United
States Securities Act that covers at least 200% of the shares of
our common stock issuable upon conversion of the total amount of
outstanding Convertible Notes and 100% of the shares of our
common stock issuable upon exercise of outstanding warrants
issued as finders fees
o we are a reporting company under the United States Securities
Exchange Act
o there has been no material adverse change in our business and no
event of default under the Convertible Notes
o our common stock is listed on a securities trading market and
there is no outstanding trading halt or stop order regarding the
listing, quotation or trading of our common stock
In addition, we may not require any investor to purchase an amount of
Convertible Notes that, together with the other Convertible Notes and shares of
our common stock held by the investor, would result in the investor beneficially
owning more than 9.9% of our outstanding common stock. During any calendar
month, we may not require the investors to purchase an amount of Convertible
Notes greater than the lesser of (1) $1,500,000; or (2) 10% of the weighted
average aggregate market price of the volume of our common stock traded each day
for the 30 trading days immediately preceding the issuance.
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If these conditions and limitations are met, each investor may be
required to purchase additional Convertible Notes up to the maximum amounts set
forth below:
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The Keshet Fund L.P. ................... $1,650,000
Keshet L.P. ............................ 3,225,000
Nesher Ltd. ............................ 1,275,000
Talbiya B. Investments Ltd. ............ 1,350,000
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TOTAL .................................. $7,500,000
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In addition to the amounts set forth above, we may require the investors to
purchase (1) $250,000 of Convertible Notes upon the filing of a registration
statement under the United States Securities Act that covers the resale of the
common stock issuable upon conversion of the outstanding Convertible Notes; and
(2) $250,000 of Convertible Notes upon the effectiveness of the registration
statement. The Convertible Notes with respect to the registration statement must
meet all the requirements for issuance of other Convertible Notes except the
limitation during any calendar month to 10% of the daily weighted average
aggregate market price of the traded volume of our common stock.
CONVERSION RIGHTS
The Convertible Notes may be converted into shares of our common stock
at the option of the holder or each note. Each Convertible Note may be partially
or fully converted into common stock. The number of shares into which each note
may be converted is calculated by dividing the principal amount of the note,
plus any accrued but unpaid interest on the note, by a conversion price
calculated on the date the Convertible Note is issued. The conversion price of
the Convertible Notes issued on September 27, 2000 is $.10. The conversion
price of all Convertible Notes issued after September 27, 2000 is 84% of the
lowest closing price for our common stock on the principal stock market on which
our common stock is traded during the 10 trading days immediately preceding the
date of issuance. Once the conversion price is established upon issuance of the
Convertible Note, the conversion price may be adjusted upon the occurrence of
certain events, including any division or combination of shares of our common
stock, any recapitalization or restructuring, or any issuance of our common
stock for a purchase price less that the current conversion price.
If we are unable to deliver stock certificates as a result of the
conversion of a Convertible Note in a timely manner, we may be required to pay a
late fee and other penalties to the holder of the note. If we are prohibited
from issuing such stock certificates, we may be required to redeem the notes at
130% of their principal amount. Unless an investor provides us with 75 days
notice, an investor may not convert any amount of a Convertible Note if, after
the conversion, the investor would beneficially own more than 9.9% of our
outstanding common stock.
REGISTRATION RIGHTS
We are required to file a registration statement under the United
States Securities Act that covers the resale by the investors of at least 200%
of the shares of our common stock issuable upon conversion of the total amount
of outstanding Convertible Notes and 100% of the shares of our common stock
issuable upon exercise of outstanding warrants issued as finders fees. We must
maintain the effectiveness of this registration statement until the latest of
(1) six months after the expiration of the warrants issued as finders fees; (2)
twelve months after the last maturity date of all outstanding Convertible Notes;
or (3) two years after the last date of issuance of a Convertible Note. At any
time after 91 days after the first issuance date of Convertible Notes until the
fourth anniversary of the first issuance date of Convertible Notes, the
investors holding more than 50% of the outstanding Convertible Notes and the
shares of our common stock issued upon conversion of the Convertible Notes have
the right to require us to file an additional registration statement under the
United States Securities Act which covers the resale of the shares designated by
such holders. The investors also have the right to include shares of
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our common stock they hold in a registration statement we intend to file for our
own account of for the account of another stockholder.
FINDERS FEES AND WARRANTS
Upon any sale of Convertible Notes under the Subscription Agreement, we
must pay to Alon Enterprises Ltd. finders fees in the form of cash and warrants
to purchase shares of our common stock. The cash finders fees are equal to 10%
of the total cash consideration paid by the investors for the Convertible Notes
issued pursuant to such sale. The warrant finders fees enable Alon Enterprises
to purchase a number of shares of our common stock equal to 12% of the number of
shares of our common stock into which the Convertible Notes issued pursuant to
such sale may be converted at an exercise price equal to 105% of the lowest
closing bid price for our common stock on the principal stock market on which
our common stock is traded during the 10 trading days immediately preceding the
date of the sale of Convertible Notes. The finders warrants expire on the fifth
anniversary of their date of issuance. Although the exercise price is
established upon the issuance of the finders warrant, the exercise price may be
adjusted upon the occurrence of certain events, including any division or
combination of shares of our common stock, any recapitalization or
restructuring, or any issuance of our common stock for a purchase price less
that the current exercise price.
Pursuant to the provisions of the Subscription Agreement, we issued a
finders warrant to Alon Enterprises on September 27, 2000 that is exercisable
for 2,000,000 shares of our common stock at the exercise price of $.1365 per
share.
If we do not require the investors to purchase at least $2,000,000 of
Convertible Notes during each 12 month period preceding the first, second and
third anniversaries of the Subscription Agreement, not including the $500,000 of
Convertible Notes issued on September 27, 2000, but including any Convertible
Notes that we request the investors to purchase but the investors refuse to
purchase because of the 9.9% beneficial ownership limitation, we must issue
additional warrants to Alon Enterprises. The number of shares of our common
stock that may be acquired pursuant to such additional finders warrants are
equal to the difference between the number of shares of our common stock that
might have be acquired pursuant to warrants that would have been issued had we
sold $2,000,000 of Convertible Notes during the preceding 12 month period and
the number of shares of our common stock that can be acquired pursuant to
finders warrants that were actually issued during such period (including the
number of shares of our common stock that might have be acquired pursuant to
warrants that would have been issued had we sold any Convertible Notes that we
requested the investors to purchase but the investors refused to purchase
because of the 9.9% beneficial ownership limitation during such period).
OTHER PROVISIONS
We made certain representations and warranties regarding Plus Solutions
and the offering of the Convertible Notes that are customary in transactions
similar to the sale of the Convertible Notes. The investors also made customary
representations and warranties regarding their qualification as accredited
investors and their investment intentions regarding the Convertible Notes.
We and the investors each agreed to indemnify the other for damages
arising from a breach of the agreement. We also agreed to customary mutual
indemnification with respect to the registration rights conferred to the
investors.
Other than securities issued to our directors and employees or
securities issued pursuant to mergers, acquisitions or strategic partnerships,
we may not offer for sale any securities of Plus Solutions until 180 days after
the effectiveness of the registration statement under the United States
Securities Act that covers the resale by the investors of the shares of our
common stock held by them. Until September 27, 2001, we must offer the investors
a right of first refusal with respect to any financing transaction proposed by a
third party, on the same terms and conditions as those proposed by such party.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
4.1 Subscription Agreement dated September 27, 2000 among Plus
Solutions, Inc. and the Subscribers set forth therein.
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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.
Date: October 12, 2000 PLUS SOLUTIONS, INC.
By: /s/ MAX GOLDEN
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President
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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4.1 Subscription Agreement dated September 27, 2000 among
Plus Solutions, Inc. and the Subscribers set forth
therein.
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