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): April 29, 2005
TECHEDGE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 000-50005 04-3703334
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
33 Wood Avenue South, 7F
Iselin, New Jersey 08830
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (732) 632-9896
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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, Techedge, Inc., entered into a subscription agreement
with Whalehaven Capital Fund Limited ("Whalehaven") pursuant to which Techedge
sold 367,647 shares of its common stock, par value $.0001 per share, to
Whalehaven for a purchase price of $0.68 per share, or $250,000 in the
aggregate, and issued to Whalehaven for no additional consideration a warrant
("Warrant") to purchase 147,059 shares of common stock at an exercise price of
$1.10 per share, which Warrant is exercisable at any time through the close of
business on April 29, 2010. Under the subscription agreement, Whalehaven agreed
to purchase at a second closing an additional 367,647 shares of common stock for
a purchase price of $0.68 per share, or $250,000 in the aggregate, and a Warrant
to purchase an additional 147,059 shares of common stock at an exercise price of
$1.10 per share, which Warrant will be exercisable at any time through the close
of business on the fifth anniversary of its date of issue. Whalehaven's
obligation to effect the second closing is subject only to customary closing
conditions outside of its control, including, among other things, the
effectiveness of a shelf registration statement (the "Registration Statement")
registering the resale of the shares of common stock purchased pursuant to the
subscription agreement (the "Shares") and the shares of common stock underlying
the Warrants (the "Warrant Shares" and together with the Shares, the
"Registrable Shares"). Subject to the satisfaction of such conditions, the
second closing is scheduled to occur on the fifth day after such shelf
registration statement is declared effective. Techedge has agreed to pay an
unaffiliated third party a fee equal to 8% of the gross proceeds received by
Techedge pursuant to the suscription agreement.
Except for a registration statement filed pursuant to the subscription
agreement or as otherwise permitted under the subscription agreement, Techedge
has agreed not to file any registration statements or amend any already filed
registration statement including but not limited to a Form S-8 with the
Securities and Exchange Commission or with state regulatory authorities without
the consent of Whalehaven until the sooner of (i) the date on which the
Registration Statement shall have been current and available for use in
connection with the public resale of the Registrable Shares for 120 days or (ii)
until all the Shares have been resold or are transferable by Whalehaven pursuant
to a registration statement or Rule 144, without regard to volume limitations
("Exclusion Period"). The Exclusion Period will be tolled during the pendency of
a Non-Registration Event as hereinafter defined. With respect to Form S-8, the
Exclusion Period shall be determined only pursuant to clause (ii) above.
Techedge also agreed that until the end of the Exclusion Period, Techedge
will not enter into any acquisition, merger, exchange or sale or other
transaction that could have the effect of delaying the effectiveness of any
pending registration statement or causing an already effective registration
statement to no longer be effective or current for a period of more than 30
consecutive days or 45 days, in the aggregate, during any 365-day period
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Under the subscription agreement Techedge is required to file the
Registration Statement covering the resale of the Registrable Shares not later
than May 29, 2005, and use its reasonable efforts to cause the Registration
Statement to be declared effective not later than 120 days after April 29, 2005.
In the event that Techedge breaches these requirements or any other
Non-Registration Event, as defined in the subscription agreement, occurs, then
Techedge is required to pay Whalehaven liquidated damages equal to 1.5% of
Whalehaven's purchase price for the shares under the subscription agreement for
each 30-day period of non-compliance or a prorated amount for any shorter
period. Techedge also granted Whalehaven a demand registration right and
piggyback registration rights that Whalehaven may exercise in the event that the
Registrable Shares are not otherwise registered pursuant to an effective
registration statement. Techedge is subject to additional liquidated damages in
the event that it fails to deliver stock certificates as required under the
subscription agreement.
The subscription agreement grants Whalehaven a right of first refusal to
purchase any shares of common stock, other equity securities, obligations
convertible or exercisable for equity securities or debt obligations that
Techedge proposes to issue prior to April 29, 2006, subject to a number of
limited exceptions set forth in the subscription agreement. Until the
Registration Statement has been effective for a period of not less than 2 years
for the sale of the Registrable Shares, or during the pendency of a
Non-Registration Event, or when any compensation or liquidated damages are
accruing or are outstanding, Techedge will not enter into an agreement to issue
nor issue, other than certain customary excepted issuances, any equity,
convertible debt or other securities convertible into common stock or equity of
Techedge nor modify any of the foregoing which may be outstanding at anytime at
a price equal to or below the share purchase price and Warrant exercise price
then in effect pursuant to the subscription agreement, without the prior written
consent of Whalehaven, which consent may be withheld for any reason. Until the
end of the two year period, Techedge will not enter into any equity line of
credit or similar agreement, nor issue or agree to issue any floating or
variable priced equity linked instruments nor any of the foregoing or equity
with price reset rights.
Other than with respect to certain excepted issuances, if at any time
shares of common stock purchased pursuant to the subscription agreement are held
by Whalehaven until three years after the actual effective date of the
Registration Statement, Techedge shall offer, issue or agree to issue any common
stock or securities convertible into or exercisable for shares of common stock
(or modify any of the foregoing which may be outstanding) to any person or
entity at a price per share of common stock or exercise price per share of
common stock which shall be less than the per share purchase price of the
Shares, or less than the exercise price per Warrant Share, respectively, without
the consent of Whalehaven, then Techedge shall issue, for each such occasion,
additional shares of common stock to Whalehaven so that the average per share
purchase price of the shares of common stock issued to Whalehaven (of only the
Shares or Warrant Shares still owned by Whalehaven) is equal to such other lower
price per share and the Warrant exercise price shall automatically be reduced to
such other lower price per share; provided, however, that to the extent that any
adjustment is made to the exercise price under the Warrant as a result of such
issuance, no adjustment shall be made to the Warrant exercise price pursuant to
the subscription agreemennt.
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The Warrant provides that until April 29, 2005, if Techedge shall issue
any common stock except for certain excepted issuances, prior to the complete
exercise of this Warrant for a consideration per share less than the purchase
price that would be in effect at the time of such issuance, then, and thereafter
successively upon each such issuance, the purchase price shall be reduced to
such other lower issuance price. For purposes of this adjustment, the issuance
of any security or debt instrument of Techedge carrying the right to convert
such security or debt instrument into common stock or of any warrant, right or
option to purchase common stock shall result in an adjustment to the purchase
price upon the issuance of the above-described security, debt instrument,
warrant, right, or option and again at any time upon any subsequent issuances of
shares of common stock upon exercise of such conversion or purchase rights if
such issuance is at a price lower than the purchase price in effect upon such
issuance. The reduction of the purchase price pursuant to the subscription
agreement is in addition to the other rights of Whalehaven under the
subscription agreement.
Techedge and Whalehaven, among other parties, entered into a funds escrow
agreement, dated as of April 29, 2005, to faciliate the closing of the
transactions contemplated by the subscription agreement.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to Item 1.01 hereof with respect to Techedge's entry
into the subscription agreement with Whalehaven. On April 29, 2005, Techedge
sold 367,647 shares of its common stock, par value $.0001 per share, to
Whalehaven for an aggregate purchase price of $250,000 and issued the Warrant to
Whalehaven for no additional consideration. The shares and the Warrant were
issued in a private placement of securities exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2) of the Securities
Act.
Techedge's reliance upon the exemption from registration afforded by
Section 4(2) of the Securities Act is premised on the following:
o Whalehaven executed a subscription agreement in which it
acknowledged, among other things, that (i) the Shares and the
Warrant to be purchased by it, as well as the Warrant Shares, would
not, upon consummation of the sale or exercise of the Warrant, as
applicable, be registered under the Securities Act and could not be
transferred in the absence of registration under the Securities Act
or an effective exemption from the registration requirements of the
Secruities Act, (ii) the certificates representing the Shares, the
Warrant and the Warrant Shares would bear a legend referring to such
transfer restrictions and (iii) that it was purchasing the
securities for its own account, not as a nominee or agent, and not
with a view toward, or resale in connection with, the public sale or
any distribution thereof.
o Whalehaven had an opportunity to ask questions of, and receive
answers from Techedge, concerning Techedge and the terms and
conditions of the securities purchase.
o Whalehaven is an "accredited investor," as such term is defined
pursuant to Rule 501(a) promulgated under the Securities Act.
o All of Techedge's communications with Whalehaven regarding the
private placement were effected without any general solicitation or
public advertising.
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Item 9.01 Financial Statements and Exhibits
The following exhibits are filed as part of this Current Report
(c) Exhibits
10.1 Subscription Agreement, dated as of April 29, 2005, between the
Registrant and Whalehaven Capital Fund Limited
10.2 Warrant dated April 29, 2005 issued to Whalehaven Capital Fund
Limited
10.3 Funds Escrow Agreement dated as of April 29, 2005 by and among the
Registrant and Whalehaven Capital Fund Limited, among other parties.
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SIGNATURE
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.
TECHEDGE, INC.
By: /s/ Peter Wang
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Name: Peter Wang
Title: Chief Executive Officer and
Chairman of the Board
Dated: May 2, 2005
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EXHIBIT INDEX
10.1 Subscription Agreement, dated as of April 29, 2005, between the
Registrant and Whalehaven Capital Fund Limited
10.2 Warrant dated April 29, 2005 issued to Whalehaven Capital Fund
Limited
10.3 Funds Escrow Agreement dated as of April 29, 2005 by and among the
Registrant and Whalehaven Capital Fund Limited, among other parties.
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