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): February 12, 2007
CANEUM, INC.
(Exact Name of Registrant as Specified in Charter)
NEVADA 000-30874 33-0916900
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
170 Newport Center Drive, Suite 210, Newport Beach, CA 92660
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 273-4000
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:
[ ] Written communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
Item 1.01 Entry in a Material Definitive Agreement
On February 12, 2007, Caneum, Inc. (the "Company"), and its wholly owned
subsidiary, Tier One Consulting, Inc. ("Tier One"), (collectively the
"Borrower") entered into a Business Financing Agreement (the "Credit
Agreement") with Bridge Bank, National Association (the "Lender") that
provides for a $1,500,000 revolving line of credit (the "Line of Credit").
The effective date of the Credit Agreement is January 24, 2007, and the
termination date of the agreement is January 24, 2008, unless terminated
earlier by the Lender as provided in the Credit Agreement. Under the Line of
Credit, the Lender will make advances ("Advances") to the Borrower not
exceeding the lesser of (i) $1,500,000 or (ii) 80% of the eligible accounts
receivable; provided that at any time the Lender my establish a percentage of
eligible accounts receivable greater or lesser than 80%. The Company paid a
$15,000 facility fee to the Lender for entering into the Credit Agreement.
The Credit Agreement also provides that the Borrower will pay a fee based on
a percentage of the amount of the Line of Credit on each anniversary of the
Credit Agreement and upon termination of the Credit Agreement by the Borrower
within twelve months.
Advances made under the Credit Agreement will bear interest at the prime
rate as published by the Wall Street Journal plus an agreed percentage rate.
The Advances made under the Credit Agreement are repayable in full on
January 24, 2008, and Advances may be repaid and reborrowed during the term
of the Credit Agreement.
Pursuant to the terms of the Credit Agreement, the Borrower and Lender
will enter into a lockbox agreement within 45 days of the date of the Credit
Agreement whereby Borrower will deposit all collections made on receivables.
At Lender's discretion, all collections received by Lender may either be
credited to Borrower's account at the bank or applied to repay when due the
Advances or any other obligations of Borrower to Lender.
The Credit Agreement contains affirmative covenants by the Borrower to
maintain its corporate existence and good standing, to pay its taxes in a
timely manner, maintain their primary depository and operating accounts with
Lender, maintain adequate business insurance, and provide the Lender with
certain financial and other information during the term of the agreement.
The Credit Agreement also contains certain covenants that, subject to certain
exceptions, limit, among other things, the Company's ability and the ability
of Tier One from:
* incurring additional indebtedness;
* merging or consolidating with or into any other business
organization;
* acquiring all or substantially all of the capital stock or property
of a third party without the prior consent of the Lender;
* permitting the Borrower's asset coverage ratio to be less than
certain bench mark amounts, as set forth in the Credit Agreement;
and
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* failing to maintain a rolling three-month performance of a
designated percentage of the Company's annual operating
projections.
Amounts outstanding under the Credit Agreement may become immediately
due and payable, at the option of and upon notice by the Lender, upon the
occurrence of specified events, including, among other things: failure to
pay any obligations under the Credit Agreement that have become due; the
furnishing by Borrower of false or misleading information or representations;
the bankruptcy of or the appointment of a receiver for the Borrower; the
entering of a judgment against the Borrower; a material adverse change in the
business condition or operations of the Borrower; a default or failure to
perform under certain agreements of Borrower; a change of control of
Borrower; or any other breach of the Credit Agreement.
In connection with the Credit Agreement, on February 12, 2007, the
Company and Tier One each entered into an Intellectual Property Security
Agreement with the Lender, pursuant to which these parties granted Lender a
security interest in certain intellectual property assets of the Company
and Tier One. In addition, Robert J. Morris and Michael A. Willner, two of
our executive officers and former sole shareholders of Tier One, each
entered into a Subordination Agreement with the Lender, pursuant to which
they subordinated to the Lender any security interest or lien that they
may have in any property of the Company or Tier One.
The Company has also issued a press release announcing the Line of
Credit, a copy of which is included as Exhibit 99.1 with this report.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The disclosures required by this Item 2.03 are set forth under Item 1.01
and are incorporated into this Item 2.03 by reference.
Item 9.01 Exhibits
The following exhibits are included as part of this report:
99.1 Press Release dated February 13, 2007, re Line of Credit
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: February 16, 2007 By /s/ Suki Mudan
Suki Mudan, President
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