UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report
April 29, 2005
(Date of earliest event reported)
EPIXTAR CORP.
(Exact Name of Registrant as Specified in Its Charter)
Florida
(State or Other Jurisdiction of Incorporation)
011-15489 65-0722193
(Commission File Number) (IRS Employer Identification No.)
11900 Biscayne Boulevard Suite 700
Miami, Florida 33181
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(Address of Principal Executive Offices) (Zip Code)
(305) 503-8600
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(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 (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 a Material Definitive Agreement.
On April 29, 2005, Epixtar Corp., and its majority-owned subsidiary, Voxx
Corporation, entered into a financing facility with Laurus Master Fund, Ltd and
affiliates of Laidlaw & Company (UK) Ltd., pursuant to which Epixtar and Voxx
borrowed $7,000,000 represented by Senior Secured Convertible Notes (the
"Notes") that mature on April 29, 2008, bear interest at the rate of prime + 2%
per year, and are amortizable beginning on October 29, 2005 at the monthly rate
of $166,667 plus accrued but unpaid interest. Payments may, in certain
circumstances, be made in shares of Epixtar and/or Voxx common stock. The Notes
may be prepaid at any time at 130% of the then outstanding principal balance due
at the time of prepayment.
The Notes are secured by all of the assets of Voxx Corporation and its
subsidiaries, Epixtar's shareholdings in Voxx Corporation and significantly all
of its other subsidiaries, by a pledge of Epixtar and Voxx's contract revenues
from certain sources and by certain other assets of Epixtar and its
subsidiaries. The Notes significantly restrict the ability of Epixtar, Voxx and
their subsidiaries from borrowing additional monies without the consent of the
lenders.
The Notes are convertible into the common stock of Epixtar at $1.00 per share
and/or into the common stock of Voxx in the event Voxx conducts an initial
public offering of its own securities at a 15% discount to the IPO price.
As additional consideration for the making of the loan, the lenders received
options to purchase 31% or 4,167,028 shares of Voxx Corporation common stock
computed on a fully diluted basis at the time of closing at a price of $.001 per
share, warrants to purchase 556,596 shares of Voxx common stock at a price,
generally, equal to the IPO price, and payments and reimbursements to the
lenders and related parties of approximately $640,000. The options and warrants
both provide the holder with anti-dilution protection in the event of stock
splits, stock dividends and other extraordinary corporate events.
The remaining proceeds of the loan were used by Epixtar to repay $1,100,000 of
outstanding debt with the balance reserved to continue the build out of Voxx
Corporation's Philippine -based contact center facilities and for general
corporate purposes.
As a condition of the making of this loan, Epixtar was also required to amend
the terms of its existing $5,000,000 loan facility with Laurus to reprice
492,827 warrants for Epixtar common stock issued in connection with that
facility from $4.05-$4.66 per share to $1.00 per share and to further secure
that facility with certain additional contract revenues from Epixtar's ISP
business.
Item 2.03 Creation of a Direct Financial Obligation of the Registrant
See Item 1.01 above.
The Notes provide that it is an "event of default" in the event of, among other
things, non-payment, a breach of a covenant or any other agreement made by the
borrowers in the note purchase agreements, the appointment of a receiver, an
unsatisfied money judgment against one of the borrowers or any of their
subsidiaries in excess of $150,000 for more than 30 days, a change in control of
Epixtar or Voxx (other than in connection with a Voxx IPO), the institution of a
government regulatory proceeding which prevents the borrowers from utilizing a
substantial portion of their assets , or the occurrence of an "event of default"
in certain other agreements to which the borrowers are parties. If an "event of
default" should occur and continue beyond any applicable grace period, 110% of
the then outstanding principal balance of the Notes plus accrued but unpaid
interest becomes immediately due and payable.
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet Arrangement.
See Item 1.01 above.
As a result of the transaction described in Item 1.01 above, certain rights to
acquire, or to convert certain debt obligations of Epixtar Corp. and Voxx
Corporation into, shares of common stock of Epixtar Corp. and/or Voxx
Corporation that were outstanding at the time of such transaction will be
modified by (i) increasing the number of such shares which may be acquired upon
the exercise of such rights or the conversion of such obligations and (ii)
reducing the price of such shares at which such acquisition or conversion is
effected. Epixtar Corp. will make information regarding the extent of such
modifications available to its shareholders when it has completed the process of
determining the exact amount of such modifications.
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Item 3.02 Unregistered Sales of Equity Securities
See Item 1.01 above.
As described in Item 1.01 above, the $7,000,000 loan is convertible into
Epixtar's common stock at $1.00 per share or Voxx common stock at a price equal
to 85% of the IPO price and included the issuance of options and warrants to
acquire shares of Epixtar's principal subsidiary, Voxx Corporation, at $.001 per
share and the IPO price, respectively. All of these securities were issued and
sold pursuant to Section 4(2) of the Securities Act of 1933, as amended, as
securities sold by an issuer in a transaction "not involving any public
offering." The transaction was privately negotiated with representatives of
accredited investors with whom Epixtar had pre-existing business relationships
only and did not involve any general solicitation or advertising.
Item 9.01 Financial Statements and Exhibits
The following exhibits are included herewith:
4.13.1 Amendment and Agreement between Epixtar Corp. and Laurus Master Fund
4.13.2 Epixtar Voxx Securities Purchase Agreement for Laurus Master Fund
4.13.3 Epixtar Voxx Secured Convertible Term Note
4.13.4 Epixtar Voxx Master Security Agreement
4.13.5 Epixtar Registration Rights Agreement
4.13.6 Voxx Registration Rights Agreement
4.13.7 Stock Pledge Agreement
4.13.8 Common Stock Purchase Warrant
4.13.9 Laurus/Laidlaw InterCreditor and Collateral Agency Agreement
4.13.10 Option to Purchase Voxx Common Stock
4.13.11 Guaranty
4.13.12 Funds Escrow Agreement
4.13.13 Epixtar Voxx Securities Purchase Agreement for Laidlaw
4.13.14 Master Securities Agreement
4.13.15 Secured Convertible Term Note I
4.13.16 Secured Convertible Term Note II
4.13.17 Secured Convertible Term Note III
4.13.18 Secured Convertible Term Note IV
4.13.19 Voxx Option I
4.13.20 Voxx Option II
4.13.21 Voxx Option III
4.13.22 Voxx Option IV
4.13.23 Common Stock Purchase Warrant
4.13.24 Epixtar Registration Rights Agreement
4.13.25 Voxx Registration Rights Agreement
4.13.26 Stock Pledge Agreement
4.13.27 Guaranty
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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.
EPIXTAR CORP.
(Registrant)
Date: May 5, 2005 By /s/ IRVING GREENMAN
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Irving Greenman
Its Chief Financial Officer
INDEX TO EXHIBITS
4.13.1 Amendment and Agreement between Epixtar Corp. and Laurus Master Fund
4.13.2 Epixtar Voxx Securities Purchase Agreement for Laurus Master Fund
4.13.3 Epixtar Voxx Secured Convertible Term Note
4.13.4 Epixtar Voxx Master Security Agreement
4.13.5 Epixtar Registration Rights Agreement
4.13.6 Voxx Registration Rights Agreement
4.13.7 Stock Pledge Agreement
4.13.8 Common Stock Purchase Warrant
4.13.9 Laurus/Laidlaw InterCreditor and Collateral Agency Agreement
4.13.10 Option to Purchase Voxx Common Stock
4.13.11 Guaranty
4.13.12 Funds Escrow Agreement
4.13.13 Epixtar Voxx Securities Purchase Agreement for Laidlaw
4.13.14 Master Securities Agreement
4.13.15 Secured Convertible Term Note I
4.13.16 Secured Convertible Term Note II
4.13.17 Secured Convertible Term Note III
4.13.18 Secured Convertible Term Note IV
4.13.19 Voxx Option I
4.13.20 Voxx Option II
4.13.21 Voxx Option III
4.13.22 Voxx Option IV
4.13.23 Common Stock Purchase Warrant
4.13.24 Epixtar Registration Rights Agreement
4.13.25 Voxx Registration Rights Agreement
4.13.26 Stock Pledge Agreement
4.13.27 Guaranty