UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest reported): November 30, 2004
SHARP HOLDING CORPORATION
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(Exact name of registrant as specified in charter)
Delaware 000-28829 65-0970516
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation or Organization) Identification No.)
13231 Champion Forest Drive, Suite 213, Houston, Texas 77069
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 960-9100
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
To obtain funding for its ongoing operations, Sharp Holding Corporation (the
"Company") entered into a Securities Purchase Agreement (the "Securities
Purchase Agreement") with New Millennium Capital Partners II, LLC, AJW Qualified
Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC (collectively, the
"Investors") on November 30, 2004 for the sale of (i) $1,000,000 in callable
convertible secured notes (the "Notes") and (ii) common stock purchase warrants
to buy 1,000,0000 shares of the Company's common stock (the "Warrants").
On November 30, 2004, the Investors purchased $500,000 in Notes and received
Warrants to purchase 500,000 shares of the Company's common stock. In addition,
provided that all of the conditions in the Securities Purchase Agreement are
satisfied, the Investors are obligated to provide the Company with additional
funds as follows:
o $200,000 will be funded within five business days of filing a
registration statement registering shares of the Company's common
stock underlying the Notes and the Warrants; and
o $300,000 will be funded within five business days of the
effectiveness of the registration statement.
The Notes bear interest at 8%, mature two years from the date of issuance, and
are convertible into our common stock, at the Investors' option, at the lower of
(i) $0.21 or (ii) 65% of the average of the three lowest intraday trading prices
for the Company's common stock during the 20 trading days before, but not
including, the conversion date. The Company may prepay the Notes in the event
that no event of default exists, there are a sufficient number of shares
available for conversion of the Notes and the market price is at or below $.21
per share. The full principal amount of the Notes is due upon default under the
terms of Notes. In addition, the Company has granted the investors a security
interest in substantially all of its assets and intellectual property as well as
registration rights.
The Warrants are exercisable until five years from the date of issuance at a
purchase price of $0.17 per share. In addition, the exercise price of the
Warrants is adjusted in the event the Company issues common stock at a price
below market.
The Investors have contractually agreed to restrict their ability to convert the
Notes and exercise the Warrants and receive shares of the Company's common stock
such that the number of shares of the Company's common stock held by them and
their affiliates after such conversion or exercise does not exceed 4.99% of the
then issued and outstanding shares of the Company's common stock.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
The sale of the Notes described in Item 1.01 was completed on November 30, 2004.
At the closing, the company became obligated on $500,000 in face amount of
callable convertible secured notes issued to the Investors. The Notes are a debt
obligation arising other than in the ordinary course of business which
constitute a direct financial obligation of the company.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
The Notes and Warrants described in Item 1.01 were offered and sold to the
Investors in a private placement transaction made in reliance upon exemptions
from registration pursuant to Section 4(2) under the Securities Act of 1933 and
Rule 506 promulgated thereunder. Each of the Investors is an accredited investor
as defined in Rule 501 of Regulation D promulgated under the Securities Act of
1933.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description
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4.1 Securities Purchase Agreement dated November 30, 2004 by and among
the Company and New Millennium Capital Partners II, LLC, AJW
Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC
4.2 Callable Secured Convertible Note in the name of New Millennium
Capital Partners II, LLC dated November 30, 2004
4.3 Callable Secured Convertible Note in the name of AJW Qualified
Partners, LLC dated November 30, 2004
4.4 Callable Secured Convertible Note in the name of AJW Offshore, Ltd.
dated November 30, 2004
4.5 Callable Secured Convertible Note in the name of AJW Partners, LLC
dated November 30, 2004
4.6 Stock Purchase Warrant in the name of New Millennium Capital
Partners II, LLC dated November 30, 2004
4.7 Stock Purchase Warrant in the name of AJW Qualified Partners, LLC
dated November 30, 2004
4.8 Stock Purchase Warrant in the name of AJW Offshore, Ltd. dated
November 30, 2004
4.9 Stock Purchase Warrant in the name of AJW Partners, LLC dated
November 30, 2004
4.10 Registration Rights Agreement dated November 30, 2004 by and among
the Company and New Millennium Capital Partners II, LLC, AJW
Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC
4.11 Security Agreement dated November 30, 2004 by and among the Company
and New Millennium Capital Partners II, LLC, AJW Qualified Partners,
LLC, AJW Offshore, Ltd. and AJW Partners, LLC
4.12 Intellectual Property Security Agreement dated November 30, 2004 by
and among the Company and New Millennium Capital Partners II, LLC,
AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners,
LLC
4.13 Guaranty and Pledge Agreement dated November 30, 2004 by and among
the Company, George Sharp and New Millennium Capital Partners II,
LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW
Partners, LLC
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.
SHARP HOLDING CORPORATION
Date: December 3, 2004 By: /s/George Sharp
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Name: George Sharp
Title: CEO