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): July 27, 2006
DETTO TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 333-100241 01-656333
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
14320 NE 21st Street, Bellevue, Washington 98007
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (425) 201-5000
Not applicable
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(Former name or former address, if changed since last report.)
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))
This Form 8-K and other reports filed by Detto Technologies, Inc. ("Detto"
or the "Company") from time-to- time with the Securities and Exchange Commission
(collectively the "Filings") contain forward looking statements and information
that are based upon beliefs of, and information currently available to, the
Company's management, as well as estimates and assumptions made by the Company's
management. When used in the Filings, the words "anticipate", "believe",
"estimate", "expect", "future", "intend", "plan" or the negative of those terms
and similar expressions as they relate to the Company or the Company's
management identify forward looking statements. Such statements reflect the
current view of the Company with respect to future events and are subject to
risks, uncertainties, assumptions and other factors relating to the Company's
industry, operations and results of operations and any businesses that may be
acquired by the Company. Should one or more of those risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual
results may differ significantly from those anticipated, believed, estimated,
expected, intended or planned.
Item 1.01 Entry into a Material Definitive Agreement.
On August 4, 2006, Detto entered into a Credit Line Agreement (the "Credit
Agreement") with Di Capital Investments ("Di Capital") pursuant to which Di
Capital is to provide Detto with a non-revolving $3,000,000 line of credit that
expires on August 31, 2007. The interest rate on the line of credit is at LIBOR
plus 5% per year, and its repayment is secured by a security interest in all of
Detto's assets. In consideration for the Credit Agreement, Detto issued to Di
Capital a warrant to purchase up to 30,000,000 shares of the Company's common
stock, as described in Item 3.02 below. A current member of Detto's Board of
Directors, Mr. Gualtiero Giori, has a material relationship with Di Capital.
On August 10, 2006, Detto entered into a Software License, Reproduction
and Bundling Agreement (the "Software License") with Privacy Solutions, LLC
("Privacy Solutions"). Privacy Solutions is the developer and owner of certain
proprietary technology (the "Technology") known as "AlertNow" that can be used
by consumers as part of "Early Alert" identity theft notification process to aid
in the early detection and warning of potential identity theft. Early Alert is
part of an identity theft protection package that is currently marketed to
consumers as the "ID Theft Package." Pursuant to the Software License, Detto has
the right, among other things, to market and sell the Technology to original
equipment manufacturers of personal computers, brick-an-mortar retailers, "pure
play" e-tailers, and certain insurance companies. In consideration for the
Software License being irrevocable and perpetual (except under certain limited
circumstances), Detto paid Privacy Solutions an up-front fee of $500,000. In
addition, Detto will also pay Privacy Solutions a royalty equal to 15% of the
specified income Detto generates from the sale or other use of the Technology,
as well as a specified fee for each month that a consumer contracts for the use
of the Technology.
Item 3.02 Unregistered Sales of Equity Securities.
In connection with the Credit Agreement, the Company issued a warrant to
Di Capital that entitles it to purchase from the Company up 30,000,000 shares of
the Company's $.0001 par value common stock (the "Common Stock") at a purchase
price of $0.10 per share. The warrant expires on August 4, 2011. Based on the
sophistication of the warrant holder and the nature of the transaction, that
sale was exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2) thereunder.
As reported in its Form 8-K dated May 3, 2006 (the "May Form 8-K"), the
Company has been in the process of offering up to 48,000,000 shares of its
unregistered Common Stock (with specified demand and "piggyback" registration
rights) to certain current shareholders for $.10 per share (the "Offering"). As
also reported in the May Form 8-K, the Company had previously entered into an
agreement (the "Guaranty Agreement") with Di Capital pursuant to which Di
Capital guaranteed that it or its nominees would purchase any and all shares not
purchased in the Offering (the "Guaranty"). Pursuant to the Guaranty, on July
27, 2006, Di Capital's nominee purchased 3,000,000 shares of Common Stock for
$300,000. That purchase was the final purchase required under the Guaranty
Agreement. No underwriting discounts or commissions were paid in connection with
that purchase, although $800,000 in cash compensation had previously been paid
to Di Capital in consideration of the Guaranty. Based on the sophistication of
the purchaser and the nature of the transaction, that sale was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2)
thereunder. A current member of the Company's Board of Directors, Mr. Gualtiero
Giori, has a material relationship with the nominee that purchased shares
pursuant to the Guaranty.
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Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On August 28, 2006, Raul Sood resigned as a director of the Company. That
resignation was not the result of any disagreement with the Company that is
known to any executive officer of the Company.
In the Company's Form 8-K dated July 11, 2006, Jason Gardiner was
incorrectly reported having been as appointed as the Company's Chief Information
Officer. In fact, Mr. Gardiner was not appointed to that position and is the
Company's Chief Financial Officer and Secretary.
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.
DETTO TECHNOLOGIES, INC.
Date: August 30, 2006 By: /s/ Larry Mana'o
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Larry Mana'o, Co-Chief Executive Officer
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