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
October 25, 2006
----------------
Date of Report
(Date of Earliest Event Reported)
WIZZARD SOFTWARE CORPORATION
----------------------------
(Exact Name of Registrant as Specified in its Charter)
Colorado 000-33381 87-0609860
-------- --------- ----------
(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
5001 Baum Boulevard, Suite 770
Pittsburgh, Pennsylvania 15213
------------------------------
(Address of Principal Executive Offices)
(412) 621-0902
--------------
Registrant's Telephone Number
N/A
---
(Former Name or Former Address if changed Since Last Report)
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):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14-a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
-------------------------------------------
On October 25, 2006, Wizzard Software Corporation, a Colorado corporation
(the "Company"), closed a Subscription Agreement by which three institutional
investors (collectively, the "Subscribers") purchased:
* promissory notes having a total principal amount of $1,750,000,
convertible into shares of the Company's common stock at a price of
$2.00 per share, and bearing an annual interest rate of five percent;
* Fifty (50) Class A Warrants will be issued for each one hundred (100)
shares which would be issued on the November 3, 2006 assuming the
complete conversion of the Notes issued on the Closing Date at the
Conversion Price in effect on the Closing Date at a exercise price of
$2.50 per share, exercisable for three years; and
* One Hundred (100) Class B Warrants will be issued for each one hundred
(100) shares which would be issued on November 3, 2006 assuming the
complete conversion of the Notes issued on November 3, 2006 at the
Conversion Price in effect on November 3, 2006 at an exercise price of
$2.00 per share, exercisable until 150 days after the effective date of
the Registration Statement described below. Both Class A and Class B
Warrants have a cashless feature.
As of the closing date of this transaction, none of the promissory notes
had been converted and none of the warrants had been exercised; a total of
30,749,406 shares of the Company's common stock were issued and outstanding on
October 25, 2006.
Not later than 30 days after the closing date of the Subscription
Agreement, the Company is required to file a Registration Statement
registering 150% of the shares issuable upon conversion of the promissory
notes and the warrants. The Registration Statement must be declared effective
not later than 120 days after the closing date. For every 30 day period that
either of these deadlines have not been met, the Company is to pay to the
subscribers liquidated damages equal to two percent of the purchase price of
the promissory notes remaining unconverted and the purchase price of the
shares issued upon conversion of the notes.
The Company is in the process of preparing a Registration Statement on
Form SB-2 to comply with its registration obligations under the Subscription
Agreement. The Company believes that it will be able to meet the deadlines
with respect to the filing date and the effective date, but it can not provide
any assurance in this regard. If the Company were to default on any of its
registration obligations, the proceeds available to it under the Subscription
Agreement could be substantially reduced.
Item 2.03. Creation of a Direct Financial Obligation.
------------------------------------------
See Item 1.01 of this Current Report.
Item 9.01. Financial Statements, Pro Forma Financial Information and
Exhibits.
---------
(a) Financial Statements of Businesses Acquired.
None; not applicable.
(b) Pro Forma Financial Information.
None; not applicable.
(c) Exhibits.
Exhibit
Number Description
- ------ -----------
10.1 Subscription Agreement
10.2 Convertible Note for $1,000,000
10.3 Convertible Note for $400,000
10.4 Convertible Note for $350,000
10.5 Funds Escrow Agreement
10.6 Class A Common Stock Purchase Warrant No. 2006-A-001
10.7 Class A Common Stock Purchase Warrant No. 2006-A-002
10.8 Class A Common Stock Purchase Warrant No. 2006-A-003
10.9 Class B Common Stock Purchase Warrant No. 2006-B-001
10.10 Class B Common Stock Purchase Warrant No. 2006-B-002
10.11 Class B Common Stock Purchase Warrant No. 2006-B-003
Incorporated by Reference.
- --------------------------
None; not applicable.
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.
WIZZARD SOFTWARE CORPORATION
Date: 10-27-06 By /s/ Christopher J. Spencer
-------- ---------------------------
Christopher J. Spencer, CEO and President