UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): February 20, 2007
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THE X-CHANGE CORPORATION
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(Exact Name of Registrant as Specified in Charter)
NEVADA 002-41703 90-0156146
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(State of Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
710 CENTURY PARKWAY, ALLEN, TX 75013
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (972) 747-0051
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(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 14a-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 MATERIAL DEFINITIVE AGREEMENT.
On February 20, 2007, the X-Change Corporation (the "Company") sold 21 units of
our securities at an offering price of $25,000 per unit to certain accredited
investors (the "Subscribers") in the initial closing of a private placement
exempt from registration under the Securities Act of 1933 in reliance on
exemptions provided by Section 4(2) of such Act and Rule 506 of Regulation D
promulgated pursuant to such Act (the "Offering"). Each unit consists of 35,000
shares of common stock of the Company (the "Common Stock"), a warrant to
purchase 35,000 shares of Common Stock of the Company at $1.50 per share
exercisable for five years (the "$1.50 Warrant") and a warrant to purchase
35,000 shares of Common Stock of the Company at $2.00 per share exercisable for
five years (the "$2.00 Warrant"). Subject to subscriber demand, there may be one
or more additional closings prior to March 31, 2007. The Offering was subject to
the execution of a Subscription Agreement (the "Subscription Agreements") and
Registration Rights Agreement (the "Registration Rights Agreements"), entered
into between the Subscribers and the Company, which contains terms and
provisions customary for a transaction of this type. To date, the Subscribers
have subscribed for 735,000 shares of the Common Stock of the Company to be
issued by the Company at the initial closing of the Offering. No underwriting
commissions or discounts have been paid.
The initial closing was conditioned on the receipt by the Company of acceptable
cash subscriptions for a minimum of $500,000. To date, the Company has received
gross proceeds of $525,000 in this Offering. The maximum amount that will be
raised from the Offering will be $6,000,000. The maximum number of shares of
Common Stock that will be sold pursuant to this Offering is 8,400,000, in
addition to 8,400,000 shares of Common Stock issuable upon exercise of $1.50
Warrants and up to 8,400,000 shares of Common Stock issuable upon exercise of
$2.00 Warrants. The Company intends to use the net proceeds from the Offering,
after deducting the costs associated with the Offering, for debt reduction,
sales expenses and general working capital.
The Company agreed to file a registration statement with the Securities and
Exchange Commission within 120 days of the closing of the Offering covering the
shares of Common Stock, including the shares underlying the warrants, sold in
the Offering. Once effective, we have agreed to keep the registration statement
effective until the earlier of
o the date all shares are sold pursuant to the registration
statement;
o six months after all of the warrants are exercised; and
o six months after the $2.50 warrants are deemed to be
cashlessly exercised under their terms.
The Company will pay certain costs associated with the filing of the
registration statement.
The securities issued in the Offering have not been registered under the
Securities Act of 1933, as amended, and until so registered the securities may
not be offered or sold in the United States absent registration or availability
of an applicable exemption from registration. This announcement is not an offer
to sell securities of the Company, and is made only as required under applicable
rules for filing current reports with the United States Securities and Exchange
Commission, and as permitted under Rule 135c under the Securities Act of 1933.
The foregoing is a summary of the terms of the Subscription Agreement the
Registration Rights Agreement, the $1.50 Warrant and the $2.00 Warrant and does
not purport to be complete and is qualified in its entirety by reference to the
full text of such documents, copies of which are attached hereto as Exhibits
10.1 and 10.2, 10.3 and 10.4.
On February 20, 2007, the Company issued a press release announcing the initial
closing of the private placement. A copy of the press release is furnished as
Exhibit 99.1 and is incorporated into this current report by reference.
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ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
The information set forth under Item 1.01 of this Current Report on
Form 8-K is incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
The following is the index of exhibits furnished in accordance with
Item 601 of Regulation S-K, filed as part of this Current Report on Form 8-K or
incorporated by reference herewith:
(a) EXHIBIT
Exhibit No. Description
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10.1 Form of Subscription Agreement, between the
Company and each of the Subscribers
10.2 Form of Registration Rights Agreement,
between the Company and each of the
Subscribers
10.3 Form of $1.50 Warrant issued by the Company
to each of the Subscribers
10.4 Form of $2.00 Warrant issued by the Company
to each of the Subscribers
99.1 Press Release of the Company Announcing
Initial Closing of the Offering, dated
February 20, 2007
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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.
THE X-CHANGE CORPORATION
Date: February 20, 2007 By: /s/ Scott R. Thompson
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Name: Scott R. Thompson
Title: Chief Financial Officer
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