SECURTIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report October 15, 2004
EPIXTAR CORP.
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(Exact name of Registrant as specified in charter)
Florida 011-15499 55-0722193
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(State or Other (Commission File No.) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
11900 Biscayne Blvd., , Miami, Florida 33181
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(Address of principal executive officers)
305-503-8600
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(Telephone)
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ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN INDIRECT
OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF REGISTRANT
On October 15 2004 , as an initial sale pursuant to a private placement
described below, we and our wholly subsidiary Voxx Corporation sold $550,000
principal amount of a Joint 5% Unsecured Subordinated Convertible Promissory
Notes due May 2007.Voxx is the holding company for our subsidiaries that are
operating our contact center business, or business process outsourcing ("BPO").
We contemplate that Voxx will be a public company either through a public
offering or a spin-off ("Voxx Public Transaction") but there is no assurance any
transaction will occur. If either of these transactions is consummated, then the
outstanding Notes will automatically convert, at the conversion price set forth
in the form of Note attached hereto as an Exhibit to this report, into shares of
Voxx common stock. Prior to any consummation of a Voxx Public Transaction each
Note holder may convert their entire Note (but not a portion thereof) into
shares of our common stock (i) at any time prior to the one year anniversary
date of the initial issuance of Notes (the"One Year Anniversary Date") at a
conversion price equal to the thirty trading day period immediately preceding
the date of conversion but not less than $2.25 and (ii) at any time following
the One Year Anniversary Date at a fixed conversion price equal to the greater
of (A) a twenty-five percent discount to the volume weighted-average price of
the our common stock for the thirty trading day period immediately preceding the
One Year Anniversary Date and (B) $1.00.
The Notes are subordinate in all respects to our senior debt. Interest is paid
semiannually and the interest rate under the Notes shall increase to ten percent
if a Voxx Public Transaction does not occur prior to the One Year Anniversary
Date.The Note contains restrictions on our abilty to effect future debt
financing and declare dividends and other matters. Subject to the subordination
provisions of the Note, the Note is accelerated upon a change of conrol or
default of payment and other provisions of the Note.
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The notes are part of Units that are currently being offered in a private
placement for a maximum gross proceeds of $ 13,800,000. In addition to the note
each Unit consists of the right to receive in the future (i) warrants to
purchase our Common Stock and/or (ii) warrants to purchase Common Stock of Voxx.
If Voxx consummates a Voxx Public Transaction then any unexercised warrants to
acquire shares of our common stock expires and the number of Voxx warrants to
each holder may be adjusted to reflect any prior exercise of warrants to acquire
our common stock.
The securities sold have not been registered under the Securities Act of 1933
nor will the securities offered be registered These securities may not be
offered or sold in the United States by the Investors absent registration under
the Securities Act of 1933 or an applicable exemption from registration
requirements. This report shall not constitute an offer to sell or the
solicitation of an offer to buy any of our securities.
For a more complete description of the terms of the agreements and other
instruments delivered in connection with the initial closing of the Placement,
reference is hereby made to the Exhibits attached to this report.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
Reference is made to ITEM 2.03 Creation of a Direct Financial Obligation or an
Indirect Obligation under an Off-Balance Sheet Arrangement of Registrant for a
description of our and our subsidiary's current debt offering.
The Placement is being made solely to accredited investors without any general
advertisement or solicitation and all of the securities issued or issuable
therein have or will contained an appropriate restrictive legend. upon an
exemption from registration under the Securities Act of 1933, as amended,
provided under Regulation D promulgated thereunder. The securities offered have
not been registered under the Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act.
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SECTION 9- FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are attached hereto.
(i) Exhibit 4.12.1 Form of Joint 5% Unsecured Subordinated Convertible
Promissory Note
(i) Exhibit 4.12.2 Form of Subscription Agreement for
Joint Note Offering
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SIGNATURE
Pursuant to the requirements of the Signature and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 21, 2004
EPIXTAR CORP.
(Registrant)
By: /s/ David Srour
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David Srour
Chief Executive Officer
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