CUSIP No. 972642102 | 13D/A | Page 4 of 7 Pages |
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended in its entirety as follows:
The Reporting Person acquired the funds necessary for purchase by way of equity subscriptions by its shareholders, each of which produced such funds from either their existing cash funds or by the assignment, to the Reporting Person, of certain amounts owed thereto (or to an affiliate thereof) by the Issuer, and the set-off of such assigned amounts against equity of the Issuer. The Issuer’s 19,295,220 shares of Common Stock beneficially owned by the Reporting Person were purchased for aggregate consideration of $1,650,000, excluding $83,522 as the aggregate value of the aforementioned set-off amounts.
See the discussion of Lubash’s options to purchase Common Stock in Item 5 hereof, which is incorporated herein by reference.
Item 4. Purpose of Transaction.
Item 4 is hereby amended in its entirety as follows:
The securities of the Issuer were purchased for investment purposes. Furthermore, pursuant to Section 3.3 of the Original Agreement, the Reporting Person acquired the right to designate one director to the board of directors of the Issuer and Lubash was designated as a director of the Issuer by the Reporting Person in March 2012.
(a) | Lubash, a director of the Issuer, holds certain unvested options to acquire 225,000 shares of Common Stock, vesting in three equal quarterly installments beginning July 1, 2013. Such options were awarded pursuant to the Issuer’s 2004 Global Share Option Plan, as amended. |
The Reporting Person intends to review its investment in the Issuer on a continuing basis, and, depending on various factors, including, without limitation, the Issuer’s financial positions, the price levels of the aggregate number of outstanding shares of Common Stock, conditions in the securities market and general economic and industry conditions, the Reporting Person may, in the future, take such actions with respect to its shares of the Issuer’s capital stock as it deems appropriate, including, without limitation, purchasing shares of Common Stock; selling shares of Common Stock; taking any permitted action to change the size or composition of the Issuer’s board of directors, taking any other action with respect to the Issuer or any of its securities in any manner permitted by law or the Issuer’s organizational documents or otherwise changing its intention with respect to any and all matters referred to in paragraphs (a) through (j) of Item 4 of Schedule 13D. The Reporting Person may discuss such matters with management or directors of the Issuer, other shareholders, industry analysts, investment and financing professionals, sources of credit and other investors. Except as aforesaid, the Reporting Person, nor any of the individuals identified in Item 2 hereof, has no current plans or proposals which relate to or would result in any of the matters described in paragraphs (a) though (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Item 5 is hereby amended to add the following information for updating:
(a), (b) As of the date of this Amendment, the aggregate number of shares of Common Stock beneficially owned by the Reporting Person is 19,295,220 shares of Common Stock, and excludes (i) 6,250,000 shares of Common Stock underlying a warrant, having exercise prices per share of $0.08 and 250,000 shares of Common Stock underlying a warrant, having exercise prices per share of $0.10 (together, the “Blocked Warrants”), and (ii) 859,044 shares of Common Stock underlying a warrant first exercisable on or after December 12, 2013, having exercise prices per share of $0.10. The aggregate percentage of shares of Common Stock owned by the Reporting Person is 22.9% pursuant to the acquisition of the 19,295,220 shares of Common Stock. The Reporting Person has the sole power to vote or to direct the vote, or to dispose or to direct the disposition of such shares of Common Stock.
The Blocked Warrants contain certain “blocker” provisions. The first blocker provision, which may be waived by the Reporting Person (any such waiver will not be effective until the sixty-first day after waiver notice is delivered to the Issuer), permits each Blocked Warrant to be exercised only in cases where the Reporting Person would not beneficially own more than 4.999% of the total number of issued and outstanding shares of Common Stock of the Issuer upon exercise of such Blocked Warrant. The second blocker provision, which may not be waived by the Reporting Person, permits each Blocked Warrant to be exercised only in cases where the Reporting Person would not beneficially own more than 9.999% of the total number of issued and outstanding shares of Common Stock of the Issuer upon exercise of such Blocked Warrant.
Without the blocker provisions included in the Blocked Warrants, the Reporting Person may be deemed to have beneficial ownership of 25,795,220 shares of Common Stock, representing in the aggregate beneficial ownership of 28.4% of the Common Stock, as determined pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.
Lubash, a director of the Issuer, beneficially owns 450,000 shares of Common Stock through options currently exercisable or exercisable within sixty days hereof, representing less than one percent of the Issuer’s outstanding Common Stock. Such options were awarded pursuant to the Issuer’s 2004 Global Share Option Plan, as amended. Lubash has the sole power to vote or to direct the vote, or to dispose or to direct the disposition of such options to purchase shares of Common Stock.
(c) On June 12, 2013, the Issuer entered into a securities purchase agreement (the “June Agreement”) with the Reporting Person, pursuant to which the Issuer (i) agreed to sell to the Reporting Person an aggregate of 4,295,220 shares of Common Stock at a price of $0.10 per share in consideration for $400,000 (excluding $29,522 set-off against the above discussed amounts owed by the Issuer to the Reporting Person) and (ii) agreed to issue to the Reporting Person, for no additional consideration, a thirty-six month warrant to purchase 859,044 shares of Common Stock at exercise prices per share of $0.10. The warrant is exercisable on or after December 12, 2013. The closing of the June Agreement occurred on June 12, 2013.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
Item 6 is hereby amended in its entirety as follows:
For as long as the Reporting Person holds not less than ten percent of the issued and outstanding share capital of the Issuer, the Reporting Person shall be entitled to pre-emptive rights, entitling the Reporting Person to purchase a pro-rata share of any new securities issued by the Issuer.
Except for Items 4 and 5 hereof and Item 5 of the Original Schedule 13D, each of which is incorporated herein by reference, and for the agreements attached as Exhibits hereto and thereto, no contracts, arrangements, understandings or relationships with respect to the securities of the Issuer exist among the persons named in Item 2 above.
Item 7. Material to Be Filed as Exhibits.