SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
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Date of Report: December 13, 2005
Medical Staffing Solutions, Inc.
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(Exact Name of Registrant as Specified in Charter)
Nevada 000-23967 91-2135006
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8150 Leesburg Pike, Suite 1200, Vienna, Virginia 22182
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (703) 641-8890
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Item 1.01. Entry into a Material Definitive Agrement.
Investment Agreement
On December 13, 2005 (the "Transaction Date"), Medical Staffing Solutions,
Inc. (the "Company") entered into an Investment Agreement with Cornell Capital
Partners, LP ("Cornell Capital" and together with the Company, the "Parties")
pursuant to which the Company issued and sold to Cornell Capital, and Cornell
Capital purchased from the Company, Three Million Dollars ($3,000,000) of Series
A Preferred shares which shall be convertible into shares of the Company's
common stock and which amount shall solely consist of (a) the surrendering of
certain convertible debentures held by Cornell Capital as of September 2, 2005
equal to $2,184,201.11 ($2,113,332.11 in principal plus $70,869.00 in accrued
interest) and (b) an additional cash amount equal to Eight Hundred Fifteen
Thousand Seven Hundred Ninety-Eight Dollars and Eighty-Nine Cents ($815,798.89),
of which Four Hundred Thousand Dollars ($400,000) was funded as of December 13,
2005 and the remaining Four Hundred Fifteen Thousand Seven Hundred and
Ninety-Eight Dollars and Eighty-Nine Cents ($415,798.89) shall be funded two (2)
business days prior to the date of the filing of a registration statement with
the United States Securities and Exchange Commission pursuant to that certain
Investor Registration Rights Agreement dated as of the Transaction Date.
The Series A Preferred shares have the designations, preferences and
rights set forth in the Certificate of Designation as filed with the Secretary
of State for the State of Nevada effective December 16, 2005 and attached hereto
as Exhibit 4.1 (all terms not defined herein shall have the meanings set forth
in the Certificate of Designation). The holders of Series A Preferred shares
have the sole right and discretion to elect conversion at any time and from time
to time into such number of fully paid and non-assessable shares of common stock
equal to the quotient of the Liquidation Amount ($1.00) divided by the
Conversion Price, subject to certain adjustments as is more fully set forth in
the Certificate of Designation. However, no holder of Series A Preferred shares
shall be entitled to convert the Series A Preferred shares to the extent, but
only to the extent, that such conversion would, upon giving effect to such
conversion, cause the aggregate number of shares of common stock beneficially
owned by such holder to exceed 4.99% of the outstanding shares of common stock
following such conversion (which provision may be waived by such holder by
written notice from such holder to the Company, which notice shall be effective
sixty-one (61) days after the date of such notice). The Conversion Price is
equal to ninety-five percent (95%) of the lowest volume weighted average of the
common stock for the thirty (30) trading days immediately preceding the date of
conversion, as quoted by Bloomberg LP. The holders of Series A Preferred shares
shall vote with the holders of common stock on an as converted basis as of the
time a vote is taken and not as separate classes.
Warrant
On December 13, 2005, the Company issued to Cornell Capital Partners a
common stock purchase warrant (the "Warrant") whereby Cornell Capital is
entitled to purchase from the Company, upon surrender of the Warrant, Fifteen
Million (15,000,000) fully paid and nonassessable shares of our common stock at
an exercise price of $0.03 per share (or as subsequently adjusted pursuant to
the terms of the Warrant). The Warrant has "piggy back" registration rights and
expires five (5) years from the date of issuance, on or about December 13, 2010.
Item 1.02. Termination of a Material Definitive Agreement.
Warrant
On December 13, 2005, the Parties terminated the common stock purchase
warrant, dated as of August 10, 2005, issued by the Company to Cornell Capital.
Standby Equity Distribution Agreement
On January 11, 2006, the Parties entered into a termination agreement (the
"Termination Agreement") whereby the Parties terminated that certain (a) Standby
Equity Distribution Agreement (the "SEDA"), (b) Registration Rights Agreement,
(c) Escrow Agreement and (d) Placement Agent Agreement, each dated as of March
10, 2004. The Company and Cornell Capital have acknowledged in the Termination
Agreement that Cornell Capital shall retain all fees paid by the Company to
Cornell Capital pursuant to the SEDA.
Item 3.02. Unregistered Sales of Equity Securities.
See Item 1.01 above.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Effective January 1, 2006, Dr. L. Carl Jacobsen has been appointed to
serve as Vice President - General Counsel of the Company. Prior to his
appointment, Dr. Jacobsen served as Vice President of Human Resources &
Administration for the Company since September 25, 2003. Dr. Jacobsen is
presently responsible for all legal matters and he also serves as an advisor to
the Board of Directors. Dr. Jacobsen earned his JD degree from Antioch School of
Law and his PhD in linguistics from UCLA.
Effective January 1, 2006, Ms. Reeba Magulick has been appointed to serve
as Vice President - Corporate Marketing of the Company. Prior to her
appointment, Ms. Magulick served as Assistant Vice President, Medical Systems
Division for TeleScience and as Vice President of Operations for Nurses Onsite
Corp. Ms. Magulick also performed the function of Investor Relations coordinator
with Medical Staffing's shareholders. Prior to joining Medical Staffing in
February 2004, Ms. Magulick completed a five (5) year tenure at Ford Motor
Company, where she succeeded in driving sales, market share, customer
satisfaction and profitability performance within her market area. Ms. Magulick
earned her Bachelor of Science degree in Commerce with a Marketing Concentration
from the University of Virginia's McIntire School of Commerce and she earned an
MBA from the University of Maryland's Robert H. Smith School of Business.
Item 9.01. Financial Statements and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibit No. Description:
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Exhibit Description
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Exhibit 4.1 Certificate of Designation of Series A Preferred Stock, as filed Provided herewith
with the Secretary of State for the State of Nevada on December
16, 2005
Exhibit 10.1 Investment Agreement, dated December 13, 2005, by and between Provided herewith
Medical Staffing Solutions, Inc. and Cornell Capital Partners, LP
Exhibit 10.2 Investor Registration Rights Agreement, dated December 13, 2005, by Provided herewith
and between Medical Staffing Solutions, Inc. and Cornell Capital
Partners, LP
Exhibit 10.3 Escrow Agreement, dated December 13, 2005, by and among Medical Provided herewith
Staffing Solutions, Inc., Cornell Capital Partners, LP and David
Gonzalez, Esq., as Escrow Agent
Exhibit 10.4 Irrevocable Transfer Agent Instructions, dated December 13, 2005, by Provided herewith
and among Medical Staffing Solutions, Inc., David Gonzalez, Esq.
and Holladay Stock Transfer, Inc.
Exhibit 10.5 Warrant, dated December 13, 2005, issued by Medical Staffing Provided herewith
Solutions, Inc. to Cornell Capital Partners, LP
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.
MEDICAL STAFFING SOLUTIONS, INC.
Date: January 18, 2006 By: /s/ Dr. Brajnandan B. Sahay
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Name: Dr. Brajnandan B. Sahay
Title: President