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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) December 15, 2000
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CDKnet.com, Inc.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-27587 22-3586087
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
250 West 57th Street
Suite 1101
New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 547-6050
400 Garden City Plaza, Suite 202, Garden City, New York 11530
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
CDKnet.com, Inc. (the "Company") recently entered into a financing
transaction to obtain working capital and to retire debt of the Company and its
subsidiary ValueFlash.com, Incorporated, a Delaware corporation ("ValueFlash").
The transaction is summarized in this Report.
SUBSCRIPTION AGREEMENT
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On December 15, 2000, the Company entered into a Subscription Agreement
("Subscription Agreement") with Mr. Masaki Hashimoto, a Japanese citizen
("Subscriber"). Whereby the Subscriber agreed to subscribe for and to purchase
14,736,842 shares of common stock of the Company ("Subscription Shares") at the
price of Nineteen Cents (US$0.19) per share ("Subscription Share Price").
The aggregate Subscription Share Price for the Subscription Shares is
Two Million Eight Hundred Thousand Dollars (US$2,800,000.00) and will be paid
as follows:
(i) On or before December 20, 2000, the sum of Five Hundred Thousand
Dollars (US$500,000.00);
(ii) On or before January 10, 2001, the sum of Five Hundred Thousand
Dollars (US$500,000.00);
(iii) On or before January 30, 2001, the sum of Three Hundred Thousand
Dollars (US$300,000.00);
(iv) On or before February 15, 2001, the sum of One Hundred Fifty
Thousand Dollars (US$150,000.00);
(v) On or before February 28, 2001, the sum of One Hundred Fifty
Thousand Dollars (US$150,000.00);
(vi) On or before March 15, 2001, the sum of One Hundred Fifty
Thousand Dollars (US$150,000.00);
(vii) On or before March 30, 2001, the sum of One Hundred Fifty
Thousand Dollars (US$150,000.00);
(viii) On or before April 15, 2001, the sum of One Hundred Fifty
Thousand Dollars (US$150,000.00);
(ix) On or before April 30, 2001, the sum of One Hundred Fifty
Thousand Dollars (US$150,000.00);
(x) On or before May 15, 2001, the sum of One Hundred Fifty Thousand
Dollars (US$150,000.00);
(xi) On or before May 30, 2001, the sum of One Hundred Fifty Thousand
Dollars (US$150,000.00);
(xii) On or before June 15, 2001, the sum of One Hundred Fifty Thousand
Dollars (US$150,000.00); and
(xiii) On or before June 30, 2001, the sum of One Hundred Fifty
Thousand Dollars (US$150,000.00).
The Company received on or before December 20, 2000 and January 10,
2001, two payments from Subscriber of $500,000 each, representing the first two
payments for the Subscription Shares. Pursuant to the Subscription Agreement,
stock certificates for an amount of the Subscription Shares representing the pro
rata portion of the Subscription Shares in respect of each payment will be
delivered to Subscriber promptly after collection by the Company of the payment
for each Subscription Shares.
All of the subscription funds received by the Company pursuant to the
Subscription Agreement will be used by the Company to purchase stock of the
Company's subsidiary, ValueFlash. ValueFlash, in turn, will use the funds to
repay its debt and fund working capital. Thus far, the funds have been used, in
part, to repay two Promissory Notes between ValueFlash and Steven A. Horowitz in
the amount of $250,000 and $100,000 dated December 14, 2000 and November 14,
2000, respectively, and to repay $150,000 of a $250,000 Promissory Note to Dan
Roc Limited Partnership. Mr. Horowitz is the Chief Executive Officer, Chairman,
Chief Financial Officer and Secretary of the Company and the Secretary and a
Director of ValueFlash. The Promissory Notes were issued in connection with a
short-term loan to the Company by Mr. Horowitz and Dan Roc Limited Partnership,
a shareholder of the Company. Those loans were secured by certain assets of the
Company and ValueFlash. Copies of the Promissory Notes and related security
documents are included as exhibits to this Report.
The Subscription Shares issued pursuant to the Subscription Agreement
are unregistered shares. The certificates evidencing such Subscription Shares
will be imprinted with a legend restricting their transfer unless the same is
registered with the SEC or, in the opinion of the Company's counsel,
registration is unnecessary. However, in the event that Subscriber timely makes
all payments due under the Subscription Agreement, the Company agrees to make a
filing to register all of the Subscription Shares with the SEC no later than
September 30, 2001.
In the event that Subscriber fails to timely make any payment due
pursuant to the Subscription Agreement, the Company has the right, exercisable
within thirty (30) days of such failure, to terminate the Subscription
Agreement, and the further right, exercisable in part or in whole and from time
to time, at any time through September 30, 2001, to repurchase the Subscription
Shares delivered to Subscriber for the repurchase price of the lower of (x)
nineteen cents (US$0.19) or (y) market price of the Company's stock at the time
of repurchase.
In the event that the financial circumstances of the Company improves
to the point that the Company no longer believes that it requires additional
financing pursuant to the Subscription Agreement, then the Company will notify
Subscriber of such change in condition, and Subscriber will then have the
option, exercisable in his discretion within thirty (30) days of receipt of such
notice, to terminate the Subscription Agreement but retain the right to request
the Company to make a filing to register the Subscription Shares already
purchased.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(1) Financial Statements
Not applicable.
(2) Exhibits.
4.3 Subscription Agreement, between CDKnet.com, Inc. and Mr.
Masaki Hashimoto dated December 15, 2000.
10.43 Collateral Assignment of Patents and Trademarks and
Security Agreement between CDKnet.com, Inc., CDKnet, LLC
and Steven A. Horowitz dated November 14, 2000.
10.44 Collateral Assignment of Patents and Trademarks and
Security Agreement between ValueFlash.com, Incorporated,
CDKnet.com, Inc., Steven A. Horowitz and Dan Roc Limited
Partnership dated November 14, 2000.
10.45 10% - $100,000 Secured Promissory Note between
CDKnet.com, Inc. and Steven A. Horowitz October 31, 2000.
10.46 10% - $100,000 Secured Promissory Note between
ValueFlash.com, Incorporated and and CDKnet.com, Inc.
dated October 31, 2000.
10.47 10% - $250,000 Secured Promissory Note between
ValueFlash.com, Incorporated and Dan Roc Limited
Partnership dated October 10, 2000.
10.48 10% - $100,000 Secured Promissory Note between
ValueFlash.com, Incorporated and Steven A. Horowitz dated
November 14, 2000.
10.49 10% - $250,000 Secured Promissory Note between
ValueFlash.com, Incorporated and Steven A. Horowitz dated
December 14, 2000.
10.50 Security Agreement between CDKnet.com, Inc. and Steven A.
Horowitz dated November 14, 2000.
10.51 Security Agreement between CDKnet.com, Inc., Steven A.
Horowitz and Dan Roc Limited Partnership dated November
14, 2000.
10.52 Assignment of ValueFlash.com, Incorporated options by
CDKnet.com, Inc. to Steven A. Horowitz and Dan Roc
Limited Partnership dated November 14, 2000.
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 thereunto duly authorized.
Dated: January 17, 2001 CDKnet.com, Inc.
By: /s/ Stephen A. Horowitz
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Stephen A. Horowitz
Chief Executive Officer, Chairman,
Chief Financial Officer and Secretary
EXHIBIT INDEX
4.3 Subscription Agreement, between CDKnet.com, Inc. and Mr.
Masaki Hashimoto dated December 15, 2000.
10.43 Collateral Assignment of Patents and Trademarks and
Security Agreement between CDKnet.com, Inc., CDKnet, LLC
and Steven A. Horowitz dated November 14, 2000.
10.44 Collateral Assignment of Patents and Trademarks and
Security Agreement between ValueFlash.com, Incorporated,
CDKnet.com, Inc., Steven A. Horowitz and Dan Roc Limited
Partnership dated November 14, 2000.
10.45 10% - $100,000 Secured Promissory Note between
CDKnet.com, Inc. and Steven A. Horowitz October 31, 2000.
10.46 10% - $100,000 Secured Promissory Note between
ValueFlash.com, Incorporated and and CDKnet.com, Inc.
dated October 31, 2000.
10.47 10% - $250,000 Secured Promissory Note between
ValueFlash.com, Incorporated and Dan Roc Limited
Partnership dated October 10, 2000.
10.48 10% - $100,000 Secured Promissory Note between
ValueFlash.com, Incorporated and Steven A. Horowitz dated
November 14, 2000.
10.49 10% - $250,000 Secured Promissory Note between
ValueFlash.com, Incorporated and Steven A. Horowitz dated
December 14, 2000.
10.50 Security Agreement between CDKnet.com, Inc. and Steven A.
Horowitz dated November 14, 2000.
10.51 Security Agreement between CDKnet.com, Inc., Steven A.
Horowitz and Dan Roc Limited Partnership dated November
14, 2000.
10.52 Assignment of ValueFlash.com, Incorporated options by
CDKnet.com, Inc. to Steven A. Horowitz and Dan Roc
Limited Partnership dated November 14, 2000.