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: July 24, 1998
(Date of earliest event reported)
SALEX HOLDING CORPORATION
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(Exact name of Registrant as specified in charter)
Delaware 1-12856 42-1358036
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(State or other jurisdiction (Commission File No.) (IRS Employer Identification
of incorporation) Number)
50 Laser Court, Hauppauge, New York 11788
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 516-436-5000
Item 1. Changes in Control of Registrant.
Pursuant to a Stock Purchase Agreement executed on July 24, 1998 between
Salex Holding Corporation (the "Company") and Betty Sun, Betty Sun acquired
125,000 shares of Series D Preferred Stock of the Company (the "Shares") for an
aggregate purchase price of $126,250. Betty Sun is a consultant to the Company
and the wife of Pershing Sun, President and a director of the Company. The
purchase price was paid by a payment in cash of $1,250 and the delivery of a
Promissory Note (the "Sun Promissory Note") made by Betty Sun in favor of the
Company in the principal amount of $125,000. The Sun Promissory Note provides
for interest at a rate of 6% per annum and is payable in $10,000 monthly
installments of principal beginning August, 1, 1998 with a final payment of all
remaining principal, and accrued interest, due on July 15, 1999. Payments on the
Sun Promissory Note may be offset against payments due Betty Sun from the
Company under a Promissory Note in the principal amount of $126,000 made by the
Company in favor of Betty Sun pursuant to the terms of the Consulting Agreement
discussed below. The obligations of Betty Sun under the Sun Promissory Note are
secured by the pledge of the Shares by Betty Sun in favor of the Company.
The Series D Preferred Stock is not entitled to dividends and is
subordinate as to distribution of assets upon liquidation to the Company's
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock.
Each share of Series D Preferred Stock is convertible, at the option of the
holder, into 100 shares of Common Stock upon the payment of $10 per share of
Series D Preferred Stock (an effective conversion price of approximately $.11
per share of Common Stock, giving effect to the amount paid to acquire the
Series D Preferred Stock and the additional amount payable upon conversion). The
holders of the Series D Preferred Stock are entitled to vote with the holders of
the Common Stock on all matters to be voted on by the Company's shareholders.
Each share of Series D Preferred Stock is entitled to 100 votes per share. Such
votes in the aggregate represent approximately 44.6% of the voting power of the
Company. Based upon a review of Amendment No. 1 to Schedule 13D filed by
Pershing Sun and Betty Sun, Mr. and Mrs. Sun beneficially own approximately
49.3% of the Company's Common Stock, including an aggregate of 476,507 shares
issuable upon the exercise of options and conversion of Series B Preferred Stock
owned by Mr. Sun and 12,500,000 shares issuable upon conversion of the Series D
Preferred Stock owned by Mrs. Sun.
Concurrently with the Stock Purchase Agreement, the Company entered into a
Registration Rights Agreement with Betty Sun whereby the Company has agreed to
register on behalf of Betty Sun or any assignee or transferee thereof, on
demand, the Common Stock issuable as a result of any conversion of the Series D
Preferred Stock with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), and, applicable blue sky
authorities, commencing at any time six months after July 24, 1998 and expiring
five years after July 24, 1998. Such demand registration rights are exercisable
once. The Company has also granted piggyback registration rights exercisable on
or before July 24, 2005, in the event the Company files a registration statement
under the Securities Act.
Concurrently, the Company also entered into a Consulting Agreement with
Betty Sun pursuant to which she is to provide consulting services in connection
with the marketing, sales and support of the Company's business. In
consideration for Betty Sun's past services to the Company, the Company issued
to her a promissory note in the principal amount of $126,000. The terms of such
note are substantially identical to the terms of the Sun Promissory Note.
Pursuant to the Consulting Agreement, Betty Sun is entitled to receive a fee of
$7,000 per month for future services.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
(1) Stock Purchase Agreement, dated July 24, 1998, between the
Company and Betty Sun*
(2) Promissory Note, dated July 24, 1998, made payable by Betty Sun
to the order of the Company in the original principal amount of
$125,000*
(3) Consulting Agreement, dated July 24, 1998, between the Company
and Betty Sun*
(4) Promissory Note, dated July 24, 1998, made payable by the Company
to the order of Betty Sun in the original principal amount of
$126,000*
(5) Registration Rights Agreement, dated July 24, 1998, between the
Company and Betty Sun*
(6) Stock Pledge Agreement, dated July 24, 1998, between the Company
and Betty Sun*
(7) Form of Certificate of Designation of Series D Preferred Stock of
the Company*
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* Denotes document filed as an exhibit to Amendment No. 1 to Schedule 13D for
Pershing Sun and Betty Sun with respect to the Company and incorporated
herein by reference.
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.
SALEX HOLDING CORPORATION
Dated: August 11, 1998 By:/s/ Andrew Lunetta
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Andrew Lunetta, Treasurer