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): SEPTEMBER 1, 2006
ADDISON-DAVIS DIAGNOSTICS, INC.
(Exact name of registrant as specified in charter)
Delaware 000-25022 800103134
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
143 Triunfo Canyon Road Westlake Village, CA 91361
Registrant's telephone number, including area code: (805) 494-7838
Copies to:
Darrin M. Ocasio, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
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 September 1, 2006, we entered into a Subscription Agreement with a qualified
institutional investor pursuant to which the investor subscribed to purchase an
aggregate principal amount of $187,500 in a secured convertible promissory note
for aggregate purchase price of $150,000 and 2 Class A common stock purchase
warrants for each one dollar of the purchase price of the secured convertible
notes ($150,000).
Each investor shall have the right to convert the secured convertible notes
after the date of issuance at any time, until paid in full, at the election of
the investor into fully paid and nonassessable shares of our common stock. The
secured convertible notes mature two years after the date of issuance. The
conversion price per share shall be the lower of (i) $0.025 or (ii) 65% of the
average of the three lowest intra-day trading prices for our common stock for
the 20 trading days prior to, but not including, the conversion date as reported
by Bloomberg, L.P. on any principal market or exchange where our common stock is
listed or traded. The conversion price is adjustable in the event of any stock
split or reverse stock split, stock dividend, reclassification of common stock,
recapitalization, merger or consolidation. In addition, the conversion price of
the secured convertible notes will be adjusted in the event that we spin off or
otherwise divest ourselves of a material part of our business or operations or
dispose all or a portion of our assets. Our obligation to repay all principal,
and accrued and unpaid interest under the convertible notes is secured by all of
our assets pursuant to a certain Security Agreement dated as of September 1,
2006.
We issued an aggregate of 300,000Class A common stock purchase warrants to the
investors, representing and 2 Class A common stock purchase warrants for each
one dollar of the purchase price of the secured convertible notes ($150,000).
The Class A warrants are exercisable until five years from the closing date at
an exercise price of $0.07 per share. The exercise price of the Class A warrants
will be adjusted in the event of any stock split or reverse stock split, stock
dividend, reclassification of common stock, recapitalization, merger or
consolidation. In addition, the exercise price of the warrants will be adjusted
in the event that we spin off or otherwise divest ourselves of a material part
of our business or operations or dispose all or a portion of our assets.
We are obligated to file a registration statement registering 150% of the shares
of our common stock issuable upon conversion of the secured convertible note and
100% of the shares issuable upon exercise of the Class A warrants no later than
35 days after the closing date and cause it to be declared effective within 120
days after the closing date. If we do not meet the aforementioned filing and
effectiveness deadlines, we shall pay to each investor an amount equal to 2% of
the purchase price of the secured convertible notes remaining unconverted and
purchase price of the shares of our common stock issued upon conversion of the
notes for each 30 days or part thereof of the pendency of such non-registration
event.
We claim an exemption from the registration requirements of the Act for the
private placement of these securities pursuant to Section 4(2) of the Act and/or
Regulation D promulgated thereunder since, among other things, the transaction
did not involve a public offering, the investors were accredited investors
and/or qualified institutional buyers, the investors had access to information
about us and their investment, the investors took the securities for investment
and not resale, and we took appropriate measures to restrict the transfer of the
securities.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION.
See Item 1.01 above.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
See Item 1.01 above.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable.
(B) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(C) EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
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10.1 Subscription Agreement, dated as of September 1, 2006, by and
among Addison-Davis Diagnostics, Inc. and Alpha Capital Anstalt.
10.2 Form of Secured Convertible Note of Addison-Davis Diagnostics,
Inc.
10.3 Form of Class A Common Stock Purchase Warrant of Addison-Davis
Diagnostics, Inc.
10.4 Security Agreement dated as of September 1, 2006 by and among
Addison-Davis Diagnostics, Inc. and Alpha Capital Anstalt.
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.
ADDISON-DAVIS DIAGNOSTICS, INC.
Date: September 6, 2006 /s/ Charles Miseroy
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Charles Miseroy
Chief Executive Officer