UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): July 24, 2008
AXS-ONE INC.
(Exact name of Registrant as specified in its charter)
| | | | | |
Delaware
(State or other jurisdiction
of incorporation) | | 0-26358
(Commission File Number) | | 13-2966911
(IRS Employer
Identification No.) |
301 Route 17 North, Rutherford, New Jersey 07070
(Address of principal executive offices, including zip code)
(201) 935-3400
(Registrant’s telephone number, including area code)
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 (seeGeneral Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement
See Item 3.02 below.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
See Item 3.02 below.
Item 3.02. Unregistered Sales of Equity Securities
On July 24, 2008, AXS-One Inc. (the“Company”) entered into a Convertible Note and Warrant Purchase Agreement (the “Purchase Agreement”) pursuant to which it sold and issued an aggregate of $2,100,000 of Series D 6% Secured Convertible Promissory Notes due May 29, 2009 (the “Series D Notes”), together with warrants to purchase an aggregate of 4,200,000 shares of common stock of the Company. Net proceeds to the Company after transaction expenses were approximately $2,050,000. The notes and warrants were sold in a private placement under Rule 506 promulgated under the Securities Act of 1933, as amended, to seven accredited investors, including three members of the Company’s Board of Directors.
The Series D Notes mature on May 29, 2009, and principal and interest thereunder are convertible into the Company’s common stock at a fixed conversion rate of $1.00 per share (subject to adjustment for stock splits, combinations and dividends). The Series D Notes bear interest of 6% per annum and are secured by substantially all the assets of the Company. The Series D Notes may be converted at the option of the Series D Note holder at any time prior to maturity. The Series D Notes rankpari passuin priority of payment and in all other respects with all of the Series C 6% Secured Convertible Promissory Notes sold and issued by the Company for the aggregate amount of $3,750,000 on November 16, 2007 and the Series A 6% Secured Convertible Promissory Notes and the Series B 6% Secured Convertible Promissory Notes sold and issued by the Company for the aggregate amount of $5,000,000 on May 29, 2007 (collectively, the “Prior Notes”).
The security interest of the Series D Note holders has been subordinated to the security interest of Sand Hill Finance, LLC, the Company’s current senior lender, pursuant to an Amended and Restated Subordination Agreement dated as of July 24, 2008 (the “Subordination Agreement”). Pursuant to the terms of a Second Security Agreement Amendment dated July 24, 2008, among the Company and the other secured parties set forth therein (the “Second Security Agreement Amendment”), the security interest of the Series D Notes rankspari passuwith the security interest granted in connection with the Prior Notes.
In addition, pursuant to a Waiver and Termination of Participation Rights and Joinder to New Participation Rights Agreement (“Participation Rights Waiver and Joinder”) the holders of the Prior Notes (i) have agreed to waive their Participation Rights held pursuant to Section 4.7 of the Convertible Note and Warrant Purchase Agreement, dated as of November 13, 2007 (“November Agreement”); (ii) have agreed that upon execution of the Purchase Agreement, all of their Participation Rights held pursuant to the November Agreement terminated and are of no further force and effect; and (iii) have agreed, pursuant to Section 4.7 of the Purchase Agreement to join, become party to and be bound by Section 4.7 of the Purchase Agreement regarding Rights of Participation and the Miscellaneous provisions of Article VI of the Purchase Agreement, effective upon execution of the Purchase Agreement.
Each Note holder also received common stock purchase warrants (the “Warrants”) to purchase two shares of the Company’s common stock for each $1.00 of principal amount of Series D Notes purchased by such holder. Each Warrant has an exercise price of $0.01 per share and is exercisable at any time through July 24, 2015.
In addition, in connection with the financing under the Purchase Agreement, the Company entered into an Investor Rights Agreement on July 24, 2008 (the “Investor Rights Agreement”) which sets forth the Company’s obligations relating to the registration of the shares of common stock underlying the Series D Notes and Warrants, including a requirement that the Company file a registration statement with respect to such common stock no later than May 29, 2009.
In addition, in connection with the financing under the Purchase Agreement, each of the Prior Notes was amended pursuant to note amendments (the “Series A Note Amendment,” the “Series B Note Amendment,” or the “Series C Note Amendment,” as the case may be) to provide that any event of default under the Series D Notes will constitute an event of default under the Prior Notes. Furthermore, in connection with the financing under the Purchase Agreement, the Investor Rights Agreement dated as of November 16, 2007, as previously amended on January 12, 2008, was amended on July 24, 2008 pursuant to a Second Investor Rights Agreement Amendment (the “Second Investor Rights Agreement Amendment”) to change the registration statement filing date thereunder to May 29, 2009. Certain provisions of the Investor Rights Agreement dated as of May 29, 2007 were waived and modified on July 24, 2008, pursuant to an Investor Rights Agreement Waiver and Modification (the “Investor Rights Agreement Waiver and Modification”) such that, among other things, the Company is not required to maintain the effectiveness of the current registration thereunder and the registration statement filing date for a new registration thereunder is extended to May 29, 2009.
The proceeds from this financing will be used to fund the Company’s operations.
The foregoing description of the financing transaction does not purport to be complete and is qualified in its entirety by reference to the definitive transaction documents, consisting of the Purchase Agreement, Investor Rights Agreement, form of Series A Note Amendment, form of Series B Note Amendment, form of Series C Note Amendment, form of Series D Note, form of Warrant, the Second Security Agreement Amendment , the Amended and Restated Subordination Agreement, the Participation Rights Waiver and Joinder, the Second Investor Rights Agreement Amendment, the Investor Rights Agreement Waiver and Modification, copies of which are filed as Exhibits 10.1 through 10.12 hereto, respectively, and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
| | | |
| Exhibit | | Description |
| 10.1 | | Convertible Note and Warrant Purchase Agreement |
| 10.2 | | Investor Rights Agreement |
| 10.3 | | Form of Series D 6% Convertible Note |
| 10.4 | | Form of Common Stock Purchase Warrant |
| 10.5 | | Second Security Agreement Amendment |
| 10.6 | | Amended and Restated Subordination Agreement |
| 10.7 | | Participation Rights Waiver and Joinder |
| | | |
| Exhibit | | Description |
| 10.8 | | Second Investor Rights Agreement Amendment |
| 10.9 | | Investor Rights Agreement Waiver and Modification |
| 10.10 | | Form of Series A Note Amendment |
| 10.11 | | Form of Series B Note Amendment |
| 10.12 | | Form of Series C Note Amendment |
SIGNATURES
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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| | AXS-ONE INC.
| |
| Date: July 28, 2008 | By: | /s/ Joseph P. Dwyer | |
| | | Joseph P. Dwyer | |
| | | Executive Vice President, Chief Financial
Officer and Treasurer | |
| |
