UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 13, 2006
Date of report (Date of earliest event reported)
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TALLY HO VENTURES, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware 333-104631 43-1988542
(State of Other Jurisdiction of (Commission (IRS Employer
Incorporation or Organization) File Number) Identification)
115 Route d' Arlon, L-8311 Capellen, Luxembourg
(Address of principal executive offices, including zip code)
011-352 2630 1540
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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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))
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
On October 13, 2006, Tally Ho Ventures, Inc. ("Company:) entered into a
Securities Purchase Agreement ("Agreement") with Mercatus & Partners, Ltd.
("Purchaser"), wherein the Company agreed, subject to the closing conditions
described below, to issue the Purchaser: (i) 1,571,428 shares of common stock at
a purchase price of $1.40 per share, or an aggregate of $2,200,000 ("Purchase
Price"), the number of shares and purchase price per share subject to adjustment
as provided below, (ii) a five-year Class A Warrant to purchase 30% of the
number of shares issued in (i) at an exercise price of $1.40 per share, subject
to adjustment as provided below, and (iii) a five-year Class B Warrant to
purchase 25% of the shares issued in (i) at an exercise price of $1.75 per
share. If prior to the closing date, the average market price of the Company's
common stock for the prior 30-day period is below a $1.75 then the purchase
price per share will be reduced to equal such price multiplied by .8, and the
Company shall, at its discretion, either reduce the aggregate purchase price to
be paid to reflect the new purchase price per share multiplied by 1,575,428 or
increase the number of shares to be issued, such that the total number of shares
issued at closing multiplied by the new purchase price per share equals the
Purchase Price. The exercise price of the Class A Warrant shall also be reduced
to equal the new adjusted purchase price per share.
The parties expect that the closing of the offering will take approximately
40 business days after the execution of the Agreement and delivery of
certificates. The closing is conditional upon certain events, including, without
limitation, the Purchaser's receipt of a valuation on the shares to be purchased
sufficient for it to obtain one or more SICAV Certificate(s), and to receive
loan funding on such SICAV Certificate in the amount that is no less then the
Purchase Price. There is no assurance that the Purchaser will receive such
certificate from the SICAV.
In connection with the issuance of the securities, the Company has granted
the Purchaser certain registration rights that provide that the Company must
register the securities issued within six months from the closing date of the
offering and that such registration statement must be effective within one year
from the closing date of the offering. The Company has agreed to pay a finders
fee in cash equal to 7% of the Purchase Price and to issue certain warrants
equal to 7% of the shares purchased by the Purchaser which shall be exercisable
at the Class A Warrant exercise price. At the closing of the offering, the
Purchaser shall have the right to appoint a member to the Company's Board of
Directors.
The foregoing description of the Agreement is qualified in its entirety by
the text of the agreement which is an exhibit to this Form 8-K.
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Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
Exhibit No. Exhibit Title
10.1 Securities Purchase Agreement between Tally Ho Ventures Inc.
and Mercatus & Partners, Ltd.
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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 thereunto duly authorized.
TALLY HO VENTURES, INC.
Date: October 19, 2006 By: /s/ Nigel Greg
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President & Chief Executive Officer
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