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): July 25, 2005
ZANN CORP.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
000-28519 76-0510754
(Commission File Number) (IRS Employer Identification No.)
1549 N. LEROY ST., SUITE D-200
FENTON, MICHIGAN 48430
(principal executive offices) (Zip Code)
(810) 714-2978
(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:
[_] Written communications pursuant to Rule 425 under the Securities Act
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
Effective July 25, 2005, Robert Simpson, the President, Secretary and
Chairman of the Board of Directors of Zann Corp. (the "Registrant"), contributed
1,795,250 shares of the issued and outstanding common stock, par value $0.01 per
share, and 164,601 shares of the issued and outstanding convertible preferred
stock, second series, par value $1.00 per share, of Sartam Industries, Inc., a
Florida corporation ("Sartam"), to the Registrant as a contribution to the
Registrant's capital. The 1,795,250 common shares of Sartam contributed by
Robert Simpson constitute approximately 48.3 percent of the issued and
outstanding common shares of Sartam. The 164,601 preferred shares, second
series, of Sartam contributed by Robert Simpson constitute approximately 6.5
percent of the issued and outstanding preferred shares, second series, of
Sartam.
Each share of the second series of Sartam's preferred stock, par value
$1.00 per share, is convertible into one share of Sartam's common stock, par
value $0.01 per share.
Robert Simpson purchased the common and the preferred shares of Sartam from
several significant stockholders of Sartam on 27th of June, 2005, for a total
purchase price of $4,400,000. The capital stock purchase agreement between
Robert Simpson and the stockholders of Sartam is attached as an exhibit to this
Current Report. Robert Simpson contributed the common and the preferred shares
of Sartam to the Registrant in exchange for a release from all liability under
the acquisition agreements related to the Sartam stock. The contribution and
assumption agreement between Robert Simpson and the Registrant is attached as an
exhibit to this Current Report.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
See Item 2.01 of this Current Report. The date when the registrant became
obligated on the direct financial obligation in connection with the Sartam stock
purchase transactions was July 25, 2005. The amount of the direct financial
obligation is $4,400,000, which is comprised of the sum of $200,000, to be
reimbursed to Simpson by the Registrant, and the $4,200,000, due pursuant to the
Promissory Note between Robert Simpson and stockholders of Sartam, dated June
27th, 2005, which is an attachment to exhibit 10.1 of this Current Report. The
repayment of the Promissory Note is secured by the Stock Pledge Agreement, which
is also an attachment to exhibit 10.1 of this Current Report.
The $4,200,000 principal amount of the Promissory Note is payable as follows:
(a) $500,000 on December 31, 2005;
(b) $1,000,000 on March 31, 2006; and
(c) $2,700,000 on August 7, 2006.
The Promissory Note bears no interest ad further terms of repayment are set
forth in the Promissory Note,
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
It is not practicable to file the required historical financial statements
of Sartam Industries, Inc. at this time. Accordingly, pursuant to Item
9.01(a)(4) of Form 8-K, the Registrant will file such financial statements under
cover of Form 8-K/A as soon as practicable, but not later than the date required
by applicable law.
(b) Pro forma financial information.
It is not practicable to file the required pro forma financial information
of Sartam Industries, Inc. at this time. Accordingly, pursuant to Item
9.01(b)(2) of Form 8-K, the Registrant will file such pro forma financial
information under cover of Form 8-K/A as soon as practicable, but not later than
the date required by applicable law.
(c) Exhibits.
The following exhibits are filed herewith:
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
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10.1 Capital Stock Purchase Agreement dated June 27, 2005.
10.2 Contribution and Assumption Agreement dated July 25, 2005.
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.
Date: July 26, 2005.
ZANN CORP.
By /s/Robert C. Simpson
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Robert C. Simpson, President, Secretary and
Chairman of the Board of Directors