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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
May 29, 2007
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Date of Report (date of earliest event reported)
NOTIFY TECHNOLOGY CORPORATION
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(Exact name of Registrant as specified in its charter)
California 000-23025 77-0382248
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation or Identification Number)
organization)
1054 S. De Anza Blvd., Suite 105
San Jose, CA 95129
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(Address of principal executive offices)
(408) 777-7920
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(Registrant's telephone number, including area code)
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(b) under the Exchange Act (17
CFR 240.14a-12(b))
|_| 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))
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Section 5 - Corporate Governance and Management
Item 5.01 Change in Control of Registrant
On May 29, 2007, Notify Technology Corporation (the "Company" ) was
informed that 21X Investments LLC (the "Purchaser"), an entity of which David
Brewer, a director of the Company since February 2000, is the sole member and
manager, had entered into a Securities Purchase Agreement (the "SPA") with
ComVest Venture Partners, L.P. ("ComVest"), Commonwealth Associates, L.P.
("Commonwealth") and certain other shareholders of the Company listed in the
table below (collectively, the "Sellers"), pursuant to which the Purchaser
purchased 6,650,000 shares of common stock, warrants to purchase up to 1,281,901
shares of common stock, and 7.596541 unit purchase options exercisable for
shares of Series A preferred stock convertible into an aggregate of 759,650
shares of common stock and warrants to purchase up to 265,878 shares of common
stock of the Company (collectively, the "Securities"). The Purchaser paid an
aggregate of $1,330,075.97 for the Securities, which is computed based on $0.20
per share for each share of common stock purchased and $10.00 for each unit
purchase option purchased. The funds used for the purchase of the Securities
were from Mr. Brewer's cash investment in 21X Investments LLC. Commonwealth
received a fee at the rate of $0.005 per share for each share of common stock
purchased for organizing the transactions contemplated by the SPA for an
aggregate payment of $33,250.00.
The following table includes a list of the Sellers and the amount of
Securities each of the Sellers sold to the Purchaser:
Shares of Common Unit
Common Stock Purchase
Seller Name Stock Warrants Options
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ComVest Venture Partners, LP. 2,800,000 608,151 2.59000
RMC Capital LLC. 2,000,000 350,000 0
Siam Partners II 300,000 52,500 0
Tahoe Partners 300,000 52,500 0
Kanodia Partners LP. 200,000 35,000 0
Flynn Corp. 200,000 35,000 0
David Chazen 200,000 35,000 0
James Nealis 150,000 26,250 0
William T. McCaffrey 150,000 26,250 0
Richard Harry Evans 100,000 17,500 0
Ricky C. Sandler 100,000 17,500 0
Kerry B. Skeen Trust 100,000 17,500 0
Robert O'Hara 50,000 8,750 0
Commonwealth Associates LP. 0 0 3.580907
Michael Falk 0 0 1.105267
Robert O. Sullivan 0 0 0.19222
Indur Taller 0 0 0.128147
Totals 6,650,000 1,281,901 7.596541
Pursuant to the terms of the sale of Series A preferred stock in July
2001, Commonwealth, an affiliate of ComVest, was entitled to select nominees to
the Board of Directors of the Company. The current Board of Directors of the
Company includes Inder Tallur, Michael Acks, David Kvederis and Neil Lichtman as
nominees of Commonwealth. Mr. Tallur is a partner of ComVest Investment
Partners, an affiliate of one of the Sellers, and Mr. Acks is the President of
RMC Capital LLC, which is one of the Sellers. Mr. Tallur is also one of the
Sellers.
Prior to the sale of the Securities, the shareholders selling such
Securities pursuant to the SPA beneficially owned approximately 55.0% of the
Company's outstanding common stock. As set forth in the table below, as a result
of the purchase of the Securities, the Purchaser beneficially owns 55.0% of the
Company's outstanding common stock and Mr. Brewer beneficially owns
approximately 55.3% of the outstanding common stock of the Company.
The following table sets forth certain information regarding beneficial
ownership of the Company's common stock following the closing of the purchase of
the Securities, by (i) each person or entity who is known by the Company to own
beneficially more than 5% of the outstanding shares of that class of the
Company's stock, (ii) each of the Company's directors, (iii) each of the
executive officers, and (iv) all directors and executive officers as a group.
The table is based on information provided to the Company or filed with the SEC
by its directors, executive officers and principal shareholders. Beneficial
ownership is determined in accordance with the rules of the Securities Exchange
Commission, and includes voting and investment power with respect to shares.
Shares of common stock, as indicated in the table, issuable upon exercise of
options or warrants that are currently exercisable or are exercisable within 60
days after May 29, 2007, are deemed outstanding for purposes of computing the
percentage ownership of the person holding such options or warrants, but are not
deemed outstanding for computing the percentage of any other shareholder. Unless
otherwise indicated, the address for each shareholder listed in the following
table is c/o Notify Technology Corporation, 1054 S. De Anza Blvd., Suite 105,
San Jose, California 95129.
Shares of Series A
Preferred Stock Shares of Common Stock
Beneficially Owned Beneficially Owned
Shares of Common Stock (Underlying Preferred (Assuming Preferred
Beneficially Owned Units) Stock Conversion)
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Name and Address of Beneficial Owner Number (1) Percentage (1) Number (2) Percentage (2) Number (3) Percentage (3)
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21X Investments LLC(4) 8,197,779 52.8% 75,965 100.0% 8,957,429 55.0%
David A. Brewer(5) 8,277,779 53.1 75,965 100.0 9,037,429 55.3
Paul F. DePond(6) 1,612,893 10.5 -- * 1,612,893 10.5
Michael K. Ballard 1,161,600 8.3 -- * 1,161,600 8.3
Gerald W. Rice(7) 476,870 3.3 -- * 476,870 3.3
Rhonda Chicone-Shick(8) 472,667 3.3 -- * 472,667 3.3
Andrew Plevin(9) 200,736 1.4 -- * 200,736 1.4
Inder Tallur(10) 40,000 * -- 40,000 *
David Kvederis(11) 20,000 * -- 20,000 *
Michael Acks -- * -- -- *
Neil Lichtman -- * -- -- *
All directors and executive
officers as a group (9 persons) 11,100,945 61.2 75,965 100.0 11,860,595 62.8
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* less than 1%
(1) Applicable percentage of ownership is based on 13,968,995 shares of our
capital stock outstanding as of May 29, 2007, assuming the applicable
options or warrants for such shareholder.
(2) Applicable percentage of ownership is based on options to purchase 9.2685
units outstanding as of May 29, 2007, in which each unit consists of
10,000 shares of Series A preferred stock and a warrant to purchase 35,000
shares of common stock (a "Preferred Unit").
(3) Applicable percentage of ownership is based on 13,968,995 shares of our
capital stock outstanding as of May 29, 2007, assuming the applicable
options or warrants for such shareholder.
(4) Includes (i) 6,915,878 shares of common stock directly owned, (ii) 75,965
shares of Series A preferred stock issuable upon exercise of options to
purchase 7.596541 Preferred Units and (iii) 1,281,901 shares of common
stock issuable upon exercise of warrants. Mr. Brewer is the sole member
and manager of 21X Investments LLC ("21X").
(5) Includes (i) 80,000 shares of common stock issuable upon exercise of
options exercisable within 60 days of May 29, 2007, (ii) 75,965 shares of
Series A preferred stock issuable upon exercise of options exercisable
within 60 days of May 29, 2007 to purchase 7.596541 Preferred Units owned
by 21X and (iii) 1,281,901 shares of common stock issuable upon exercise
of warrants exercisable within 60 days of May 29, 2007 owned by 21X. Mr.
Brewer is the sole member and manager of 21X.
(6) Includes (i) 147,615 shares of common stock directly owned, and (ii)
1,465,278 shares issuable upon exercise of options exercisable within 60
days of May 29, 2007.
(7) Includes (i) 25,203 shares of common stock directly owned, and (ii)
451,667 shares issuable upon exercise of options exercisable within 60
days of May 29, 2007.
(8) Includes (i) 11,000 shares of common stock directly owned, and (ii)
461,667 shares issuable upon exercise of options exercisable within 60
days of May 29, 2007.
(9) Includes (i) 110,736 shares of common stock directly owned, and (ii)
90,000 shares issuable upon exercise of options exercisable within 60 days
of May 29, 2007.
(10) Includes 40,000 shares issuable upon exercise of options exercisable
within 60 days of May 29, 2007.
(11) Includes 20,000 shares issuable upon exercise of options exercisable
within 60 days of May 29, 2007.
To the knowledge of the Company, there are no arrangements or
understandings between the Purchaser and any of the Sellers and their associates
with respect to election of directors of other matters.
To the knowledge of the Company, except as set forth herein, there are no
arrangements, including any pledge by any person of securities of the Company,
the operation of which may at a subsequent date result in a further change in
control of the Company.
On May 30, 2007, the Company issued a press release announcing the change
in control transaction described above. The full text of the press release is
furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibit is furnished herewith:
99.1 Press Release dated May 30, 2007 of Notify Technology
Corporation announcing the acquisition by 21X Investments LLC
of securities of Notify Technology Corporation held by certain
shareholders
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.
NOTIFY TECHNOLOGY CORPORATION
Dated: May 29, 2007 By:/s/ Gerald W. Rice
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Gerald W. Rice, Chief Financial Officer
Exhibit Index
Exhibit Number Exhibit Title
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99.1 Press Release dated May 30, 2007 of Notify Technology
Corporation announcing the acquisition by 21X Investments LLC
of securities of Notify Technology Corporation held by certain
shareholders.