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 8, 2004
CANEUM, INC.
(Exact Name of Registrant as Specified in Charter)
NEVADA 0-30874 33-0916900
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
170 Newport Center Drive, Suite 220, Newport Beach, CA 92660
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 273-4000
Item 5. Other Events
Merger with Pipeline
On July 8, 2004, Caneum entered into a merger agreement with Pipeline
Software, Inc., a California corporation. The agreement provides for
Pipeline to be merged with and into Caneum. Under the terms of the
agreement the shareholders of Pipeline will receive 1,000,000 shares of
Caneum common stock payable over a period of two years, with 500,000 being
issued pro rata to the shareholders of Pipeline at the effective time of
the merger, 250,000 being issued to these shareholders on the first
anniversary date, and 250,000 on the second anniversary date. Certain
shareholders of Pipeline will also receive pro rata a cash payment of
$50,000 per month for the first ten months following the closing of the
merger. In addition to customary closing conditions, closing will be
subject to the approval of the shareholders of both companies and the audit
of the financial statements of Pipeline. Closing is further conditioned
upon Pipeline having a positive net income for the year ended December 31,
2003, having at least $700,000 of gross revenue and positive net income for
the period from January 1, 2004, until June 30, 2004, and having $300,000
in cash and current accounts receivable at the effective time of the
merger, less accounts payable. The agreement will be terminated if the
merger has not been completed by September 15, 2004.
The securities to be issued to the shareholders of Pipeline will not
be registered under the Securities Act and may not be offered or sold in
the United States absent registration or an applicable exemption from
registration requirements.
The merger agreement also provides that Pipeline will assign to Suntel
Systems, Inc., a corporation owned by certain of the Pipeline shareholders,
certain of Pipeline's intellectual property rights, all of which will be
licensed to Caneum on a nonexclusive basis pursuant to a license agreement
which the parties intend to execute at closing. Caneum will retain all of
Pipeline's rights, titles and interests in and to the mark "Pipeline
Software," Pipeline's related logos, Pipeline's URL address and related
trademarks, service marks, trade names and copyrights. Caneum will pay a
license fee calculated from a formula agreed to by the parties. The
license agreement will have an initial term of five years.
The foregoing description of the transaction does not purport to be
complete and is qualified in its entirety by the merger agreement, a copy
of which is incorporated herein by reference as Exhibit 2.2. In connection
with the signing of the merger agreement, Caneum issued a press release on
July 9, 2004, a copy of which is attached hereto and incorporated herein by
reference as Exhibit 99.1.
Employment Agreements
In connection with the merger transaction with Pipeline, Caneum has
entered into two interim employment agreements with persons affiliated with
Pipeline. The agreements are with Charlie Sundling and Raju Patel and
provide for full-time employment with the company. As additional
compensation, these employees will receive performance options vesting over
a two year time period to purchase up to 1,000,000 shares of Caneum; and an
additional performance cash bonus in the second year of employment of up to
$500,000. If the merger agreement with Pipeline is not closed on or before
September 15, 2004, the employment agreements will terminate on that date.
If closing does occur by that date, the term of the agreements will be for
two years from closing and will be renewable for successive one-year terms.
Mr. Sundling is being employed during the interim term as Director of
Technical Services, and after the closing of the merger he will be
appointed as Senior Vice President of Caneum. Mr. Patel is being employed
as Director of Professional Services of Caneum.
Item 7. Exhibits
The exhibits set forth in the following index of exhibits are filed as
a part of this current report.
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Exhibit No. Description of Exhibit
2.2 Merger Agreement dated July 8, 2004, between Caneum and
Pipeline Software, Inc.(1)
10.12 Employment Agreement dated effective June 15, 2004 with
Charlie Sundling
10.13 Employment Agreement dated effective June 15, 2004 with
Raju Patel
99.1 Press release announcing signing of Merger Agreement
with Pipeline Software, Inc.
__________
(1) Pursuant to Item 601(b)(2) of Regulation S-B, the schedules and
the following exhibits have been eliminated from this filing: Exhibit A is
the form of the Stock Acquisition Agreement for the Pipeline shareholders;
Exhibit B is the form of the Proprietary Information and Inventions
Agreement for Pipeline shareholders; and Exhibit C is the form of the
Software License Agreement from Suntel Systems, Inc. All of these exhibits
are intended to be executed at closing of the Merger Agreement.
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.
Caneum, Inc.
Date: July 9, 2004 By /s/ Suki Mudan
Sukhbir Singh Mudan, President and
Treasurer (Principal Executive Officer
and Principal Financial and Accounting
Officer)
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