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): May 27, 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 May 27, 2005, Techedge, Inc. ("Techedge"), entered into an Amendment to
the Subscription Agreement (the "Amendment") with Alpha Capital
Aktiengesellschaft ("Alpha") and Whalehaven Capital Fund Limited ("Whalehaven")
(together with Alpha, the "Subscribers"), amending the terms of the Subscription
Agreement between the parties dated April 29, 2005 (the "Subscription
Agreement"). A copy of the Subscription Agreement was filed with the Securities
and Exchange Commission on May 5, 2005 as Exhibit 10.1 to Techedge's Current
Report on Form 8-K. Pursuant to the terms of the Subscription Agreement as
amended by the Amendment, Techedge sold 500,000 shares of its common stock, par
value $.0001 per share, to each of the Subscribers for a purchase price of $0.50
per share, or $250,000 in the aggregate, and issued to each of the Subscribers
for no additional consideration a warrant (the "Warrants") to purchase 147,059
shares of common stock at an exercise price of $0.75 per share, which Warrants
are exercisable at any time through the close of business on April 29, 2010.
Under the Subscription Agreement as amended by the Amendment, each of the
Subscribers agreed to purchase at a second closing an additional 500,000 shares
of common stock for a purchase price of $0.50 per share, or $250,000 in the
aggregate, and Warrants to purchase an additional 200,000 shares of common stock
at an exercise price of $0.75 per share, which Warrants will be exercisable at
any time through the close of business on the fifth anniversary of its date of
issue. The Subscribers' obligations to effect the second closing is subject only
to customary closing conditions outside of their 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 Subscription 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 the Subscribers 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 the Subscribers
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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As further consideration for the amendments described above, Techedge's
requirement to file the Registration Statement covering the Registrable Shares
was extended to June 13, 2005, and its obligation to cause the Registration
Statement to be declared effective was extended to 135 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 each of the Subscribers liquidated damages equal to
1.5% of the Subscribers' 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 each of the Subscribers a demand
registration right and piggyback registration rights that the Subscribers 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 each of the Subscribers 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 the Subscribers, 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 the Subscribers 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 the Subscribers, then Techedge shall issue, for each such
occasion, additional shares of common stock to each of the Subscribers so that
the average per share purchase price of the shares of common stock issued to the
Subscribers (of only the Shares or Warrant Shares still owned by the
Subscribers) 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
Agreement.
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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 the Subscribers under the
Subscription Agreement.
Techedge and the Subscribers, among other parties, entered into a funds
escrow agreement, dated as of April 29, 2005, to facilitate 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 Amendment with the Subscribers. On April 29, 2005, Techedge sold
367,647 shares of its common stock, par value $.0001 per share, to each of the
Subscribers pursuant to the Subscription Agreement, and on May 27, 2005, that
number was increased by 132,353 pursuant to the Amendment, for an aggregate
purchase price of $250,000 and issued the Warrants to the Subscribers for no
additional consideration. The shares and the Warrants 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 The Subscribers executed the 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 The Subscribers had an opportunity to ask questions of, and receive
answers from Techedge, concerning Techedge and the terms and conditions of the
securities purchase.
o Each of the Subscribers is an "accredited investor," as such term is
defined pursuant to Rule 501(a) promulgated under the Securities Act.
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o All of Techedge's communications with the Subscribers regarding the
private placement were effected without any general solicitation or public
advertising.
Item 9.01 Financial Statements and Exhibits
The following exhibits are filed as part of this Current Report
(c) Exhibits
10.1 Amendment to Subscription Agreement, dated as of May 27, 2005,
between the Registrant, Alpha Capital Aktiengesellschaft and Whalehaven Capital
Fund Limited.
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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: June 3, 2005
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EXHIBIT INDEX
10.1 Amendment to Subscription Agreement, dated as of May 27, 2005,
between the Registrant, Whalehaven Capital Fund Limited and Alpha Capital
Aktiengesellschaft.
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