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): November 21, 2006
Manaris Corporation
(Exact name of registrant as specified in its charter)
Nevada 000-33199 88-0467848
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(State or other jurisdiction (Commission File No.) (IRS Employer ID)
of incorporation)
1155 Rene-Levesque Blvd. West
Suite 2720
Montreal, Quebec
Canada H3B 2K8
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(Address of principal executive offices and Zip Code)
(514) 337-2447
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(Registrant's telephone number, including area code)
Copies to:
Darrin Ocasio, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, NY 10018
Tel:(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 November 21, 2006, Manaris Corporation ("Manaris" or the "Company") completed
the second tranche (the "Second Tranche") of the Note and Warrant Purchase
Agreement (the "Purchase Agreement") providing for the sale by the Company of
Series B Subordinated Secured Convertible Notes (the "Series B Notes") in an
aggregate principal amount of approximately $3.6 million and Original Issue
Discount Subordinated Secured Convertible Notes equal to fifteen percent (15%)
of the aggregate principal amount of Series B Notes (the "OID Notes")
(collectively, the "Notes") to certain institutional and accredited investors
(the "Investors").
In connection with the Second Tranche, the Company issued (i) Series B Notes in
an aggregate principal amount of $1,509,226 (ii) OID Notes in an aggregate
principal amount of $226,384, and (iii) four year warrants to purchase shares of
the Company's common stock in an amount equal to 37.5% of the number of common
shares underlying the Series B Notes at $.45 per share (the "Series Z Warrants")
and 2.5% of the number of common shares underlying the Series B Notes at $.65
per share (the "Series Y Warrants") (collectively, the "Warrants"). The Company
received net proceeds of approximately $1,360,237 in connection with the Second
Tranche.
In connection with the Second Tranche, the Company and the Investors agreed to
(i) accelerate the commencement date of the quarterly principal payments on the
Notes to February 1, 2007, and (ii) reduce the amount of the quarterly principal
payments to 1/9th of the original principal amount of the Notes.
The Notes mature thirty (30) months from the date of issuance (the "Maturity
Date") and are convertible at any time into shares of the Company's common stock
at a fixed conversion price of $.42, subject to a conversion price reset of
$.35. The conversion price of the Notes is subject to adjustment for certain
events, including dividends, distributions or split of the Company's Common
Stock, or in the event of the Company's consolidation, merger or reorganization.
The Company's obligations under the Purchase Agreement and the Notes are secured
by a subordinated lien on substantially all of the assets of the Company,
pursuant to a Pledge and Security Agreement.
The Company claims 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 are accredited
investors and/or qualified institutional buyers, the investors had access to
information about the Company and their investment, the investors took the
securities for investment and not resale, and the Company took appropriate
measures to restrict the transfer of the securities.
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.
MANARIS CORPORATION
Dated: November 28, 2006 By: /s/ John G. Fraser
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John G. Fraser
President and Chief
Executive Officer