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) : May 18, 2006
Commission File No. 000-49756
THE WORLD GOLF LEAGUE, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 95-0201235
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(State or other jurisdiction of (IRSEmployer Identification No.)
incorporation or organization)
2139 STATE ROAD 434, SUITE 101, LONGWOOD, FLORIDA 32779
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(Address of principal executive offices) (Zip Code)
(407) 331-6272
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(Issuer telephone number)
Check the appropriate box below if the Form 8-K 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 (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.
The World Golf League, Inc. (the "Company," "we," "us"), and DLC Capital
Group, LLC ("DLC") entered into a Securities Purchase Agreement dated as of May
18, 2006 (the "Closing" and the "Purchase Agreement") whereby we agreed to sell
an aggregate of $400,000 in convertible notes ("Convertible Notes" or "Notes")
and up to 700,000,000 warrants to purchase shares of our common stock at an
exercise price of $0.004 ("Stock Purchase Warrants" or "Warrants"). At the
Closing, we sold DLC a Convertible Note in the principal amount of one hundred
and forty five thousand dollars ($145,000) (the "Note") and a Stock Purchase
Warrant to purchase an aggregate of 253,750,000 shares of our common stock at an
exercise price of $0.004 per share. We also granted DLC registration rights to
the shares the Note is convertible into; the shares the Warrant is exercisable
for pursuant to a Registration Rights Agreement, and the shares of common stock
issuable upon the conversion of the additional notes and additional warrants we
agreed to sell to DLC as described below, pursuant to a Registration Rights
Agreement (the "Registration Agreement").
Additionally, DLC agreed that upon the filing of a Registration Statement
covering the Note, it would purchase additional Notes (the "Filing Notes") in
the aggregate principal amount of fifty-five thousand dollars ($55,000) and
additional warrants (the "Filing Warrants") to purchase an aggregate of
96,250,000 shares of Common Stock, with the closing of such purchase to occur
within five (5) days of the filing date of the Registration Statement and to
purchase additional notes (the "Effectiveness Notes" and, collectively with
the Filing Notes, the "Additional Notes") in the aggregate principal amount of
two hundred thousand dollars ($200,000) and additional warrants (the
"Effectiveness Warrants" and, collectively with the Filing Warrants, the
"Additional Warrants") to purchase an aggregate of 350,000,000 shares of Common
Stock upon the effectiveness of the Registration Statement, with the
closing of such purchase to occur within five (5) days of the date the
Registration Statement is declared effective by the Commission. The terms of
the Additional Notes and the Additional Warrants shall be identical to the terms
of the Notes and Warrants. The Common Stock underlying the Notes and Warrants,
as well as additional amounts of shares in connection with the conversion of
accrued interest on the Notes, as provided in the Notes, are referred to herein
as the "Registrable Securities," and shall be included in the Registration
Statement to be filed pursuant to the Registration Rights Agreement.
Pursuant to the Purchase Agreement, we agreed that we would not, without
the prior written consent of DLC, negotiate or contract with any party to obtain
additional equity financing (including debt financing with an equity component)
that involves (A) the issuance of common stock at a discount to the market price
of the common stock on the date of issuance; (B) the issuance of convertible
securities that are convertible into an indeterminate number of shares of common
stock; or (C) the issuance of warrants during the period beginning on the
Closing, and ending on the later of (i) two hundred seventy (270) days from the
Closing, or (ii) one hundred eighty (180) days from the date the Registration
Statement which we are required to file pursuant to the Registration Rights
Agreement is declared effective by the Securities and Exchange Commission (the
later period being the "Lock-up Period"). Additionally, we agreed, subject to
certain exceptions provided in the Purchase Agreement, to not conduct any equity
financing (including debt with an equity component) during the period beginning
on the Closing, and ending two (2) years after the end of the Lock-up Period
unless we previously deliver to DLC written notice describing the terms and
conditions of the proposed future offering, and provide DLC fifteen days to
purchase its pro rata share as calculated in the Purchase Agreement, of the
securities being offered in the future offering on the same terms as
contemplated by such future offering, which right was further modified by the
Right to Match provision of the Notes, described below.
We also agreed to grant DLC 40,000,000 shares of our restricted common
stock as a commitment fee in connection with the Closing of the funding.
CONVERTIBLE NOTE
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The $145,000 Note bears interest at the rate of ten percent (10%) per
annum, payable each month in arrears until due on May 18, 2009 ("Maturity
Date"). Any amount of principal or interest not paid on the Maturity Date bears
interest at the rate of fifteen 15% per annum from the Maturity Date until paid.
Additionally, the Note is convertible into shares of our common stock at any
time prior to the Maturity Date, as described below, provided that DLC shall not
be able to convert any portion of the Note into shares of common stock, if such
conversion would result in beneficial ownership by DLC of more than 4.99% of our
then outstanding shares of common stock. The Note may not be prepaid by us
without the consent of DLC. The additional Notes described above to be issued
subsequent to the Closing will have the same terms and conditions as the Note
issued on the Closing, and such Notes will be due and payable on the third
anniversary of their issuance date.
The Notes are convertible into shares of our common stock at the lesser of
(i) $0.15 per share, (ii) seventy percent (70%) of the average of the five (5)
lowest volume weighted average price ("VWAPs") trading days of our common stock
during the 20 most recent completed trading days of the common stock on the
OTCBB, prior to the date of conversion, (iii) seventy percent (70%) of the VWAP
of our common stock for the most recent completed trading day prior to
conversion, or (iv) seventy percent (70%) of the most recent closing bid price
of our common stock prior to the conversion. Notwithstanding the foregoing, in
the event that the conversion price in effect is less than $0.001 (the "Minimum
Conversion Price"), then the Holder shall not be entitled to convert any portion
of the Notes, unless we waive such Minimum Conversion Price.
"Events of Default" under the Notes include:
o our failure to pay principal or interest on the Note when
due;
o if we fail to issue shares of common stock upon DLC's
conversion (unless such default is due to the fact that we do not
have a sufficient number of authorized shares to issue such
shares, in which case we have sixty (60) days to issue such
shares if we are using our best efforts to increase our
authorized shares);
o our failure to file a registration statement covering the
securities convertible into common stock in connection with the
Notes and exercisable into common stock in connection with the
Warrants within thirty (30) days following the Closing, and/or
obtain effectiveness of the registration statement within one
hundred twenty (120) days after filed, or such registration
statement lapses in effect for more than ten (10) consecutive
days or twenty (20) nonconsecutive days in any twelve (12) month
period after such registration statement becomes effective;
o our breach of any covenant contained in the Purchase
Agreement or Notes, which continues for a period of ten (10) days
after written notice of such breach from DLC to us;
o our breach of any representation or warranty made in any
Closing agreement;
o our assignment of a receiver or trustee for the benefit of
creditors and/or our voluntary or involuntary entry into
bankruptcy, insolvency, reorganization or liquidation proceeding;
o if any money judgment is entered or filed against us or our
property for more than $50,000 and remains unvacated, unbonded or
unstayed for a period of twenty (20) days; or
o if we are delisted from the OTCBB.
If an Event of Default occurs under the Notes, DLC may cause the Notes to
be immediately due and payable and to force us to pay it an amount equal to the
greater of 150% of the amount remaining to be paid on the Notes (the "Default
Sum"), or (a) the highest number of shares of common stock issuable upon
conversion of the Default Sum, treating the trading day immediately preceding
the date on which DLC has requested payment of the Default Sum as the
"Conversion Date" for purposes of determining the lowest applicable Conversion
Price, multiplied by (b) the highest closing price for our common stock during
the period beginning on the date of first occurrence of the Event of Default and
ending one day prior to the date on which DLC has requested payment of the
Default Sum (the "Default Amount"). Additionally, if we fail to pay the Default
Amount within five (5) business days of the date written notice that such amount
is due and payable is given by DLC, then DLC has the right at any time, so long
as we remain in default (and so long and to the extent that there are sufficient
authorized shares), to require us, upon written notice, to immediately issue, in
lieu of the Default Amount, the number of shares of our common stock equal to
the Default Amount divided by the Conversion Price then in effect.
We also agreed pursuant to the Notes to keep an amount of
authorized but unissued shares of common stock available equal to two times the
total conversion of the Notes available to allow for conversions of the Notes at
all times. If at any time DLC submits a notice of conversion and we do not have
a sufficient amount of authorized but unissued shares available for such
conversion, the conversion will not take place until such time as we have a
sufficient number of authorized but unissued shares, at which time such
conversion will take place at the lesser of the conversion price in effect on
the original date when DLC sent the notice of conversion or a conversion date
thereafter chosen by DLC. Additionally, we are obligated to pay DLC default
interest as calculated in the Notes in the event we do not have a sufficient
number of authorized but unissued shares available to allow such conversion by
DLC. At this time, we do not have such amount of authorized but unissued shares
although we plan to increase our authorized shares in the future.
Additionally, pursuant to the Notes, in the event that we obtain a
commitment for any other financing (either debt, equity, or a combination
thereof) which is to close during the term the Notes are outstanding, DLC is
entitled to a right of first refusal to enable it to, at its option, match the
terms of the other financing. In connection with such right to match, we are to
deliver to DLC, at least 10 days prior to the proposed closing date of such
other financing, written notice describing the proposed transaction, including
the terms and conditions thereof, and providing DLC an option during the 10 day
period following delivery of such notice to provide the financing being offered
in such transaction on the same terms as contemplated by such transaction. This
right to match any financing commitment received includes all subsidiaries in
which we hold a twenty-five percent (25%) or greater interest. If after
receiving such offer, DLC declines to exercise its rights of first refusal, DLC
may require us to repay 150% of the outstanding principal, and accrued interest
and penalties, if any, owed pursuant to the Notes, which repayment would occur
simultaneously with the subsequent financing (collectively the rights described
in this paragraph are referred to in this filing as the "Right to Match").
STOCK PURCHASE WARRANT
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In connection with the Purchase Agreement, we sold DLC a Warrant to
purchase up to 253,750,000 fully paid and nonassessable shares of our common
stock, at an exercise price per share equal to $0.004 (the "Exercise Price").
The Warrant is exercisable at any time or from time to time before 6:00 p.m.,
New York, New York time on the third (3rd) anniversary of the date of issuance
of the Warrant, May 18, 2009 (the "Exercise Period"). The additional Warrants
described above to be issued subsequent to the Closing will have the same terms
and conditions as the Warrant issued on the Closing, and such Warrants will be
exercisable until the third anniversary of their issuance date.
The Warrant includes a provision, whereby if we issue or grant any
warrants, rights or options, whether or not immediately exercisable, to
subscribe for or to purchase common stock or other securities convertible into
or exchangeable for common stock; subdivide or combine our common stock at any
time the Warrant is outstanding; consolidate or merge with another company;
distribute our assets in a partial liquidation or winding up, the exercise price
and amount of shares which the Warrant is convertible into is automatically
adjusted as provided in the Warrant.
Additionally, the Warrant contains a cashless exercise feature, whereby if
the resale of the shares underlying the Warrant is not then registered pursuant
to an effective registration statement under the Securities Act, the Warrant may
be exercised by a cashless exercise, in lieu of paying the Exercise Price in
cash, and DLC is able to surrender the Warrant for that number of shares of
common stock determined by multiplying the number of shares to which it would
otherwise be entitled, by a fraction, the numerator of which is the difference
between the then market price per share of our common stock and the Exercise
Price, and the denominator of which is the then market price per share of our
common stock. For example, if DLC is exercising 100,000 Warrants with a per
Warrant exercise price of $0.15 per share through a cashless exercise when the
market price of our common stock is $0.25 per share, then upon such cashless
exercise DLC will be able to receive 40,000 shares of our common stock.
REGISTRATION RIGHTS AGREEMENT
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The Registration Rights Agreement provides that we shall prepare and file a
Registration Statement with the Securities and Exchange Commission covering the
shares convertible into common stock in connection with the Note and exercisable
into shares of common stock in connection with the Warrant within thirty (30)
days of the Closing date. Additionally, we agreed to use our best efforts to
obtain effectiveness of such Registration Statement as soon as possible after
such filing, but in no event later than ninety (90) days from the Closing date
Additionally, pursuant to the Registration Statement, we agreed to use our
best efforts to obtain effectiveness of the Registration Statement as soon as
practicable. If (i) the Registration Statement covering the Registrable
Securities required to be filed by us is not filed within thirty (30) days of
the Closing date, or declared effective by the SEC on or prior to one hundred
twenty (120) days from the Closing date, or (ii) after the Registration
Statement has been declared effective by the SEC, sales of all of the
Registrable Securities cannot be made pursuant to the Registration Statement, or
(iii) our common stock ceases to be listed or included for quotation on the
Over-The-Counter Bulletin Board, or another market or exchange as described in
the Registration Rights Agreement, then we agreed to make a payment to DLC in an
amount equal to $10,000 for each 30-day period or any portion thereof following
the date which we agreed that such Registration Statement would be filed with
the SEC, or the date that we agreed that such Registration Statement would be
declared effective with the SEC, provided, however, that such payment will not
exceed $50,000 in the aggregate. We agreed that these payments would be in
partial compensation to DLC, and that such payments will not constitute DLC's
exclusive remedy for such events. Additionally, we agreed that the payments
described above would be made to DLC in cash.
ITEM 3.03 UNREGISTERED SALES OF EQUITY SECURITIES.
On May 18, 2006, we entered into the Purchase Agreement with DLC, an
accredited investor, for the sale of an aggregate of (i) $400,000 in convertible
debentures and (ii) warrants to buy 700,000,000 shares of our common stock at an
exercise price of $0.004 per share. We claim an exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, since the foregoing
transactions did not involve a public offering, the recipient had access to
information that would be included in a registration statement, took the shares
for investment and not resale and we took appropriate measures to restrict
transfer.
On or about May 25, 2006, we issued 40,000,000 shares of restricted common
stock to DLC as a commitment fee, in conection with our entry into the Note and
Securities Purchase Agreement. We claim an exemption from registration afforded
by Section 4(2) of the Securities Act of 1933, since the foregoing transactions
did not involve a public offering, the recipient had access to information that
would be included in a registration statement, took the shares for investment
and not resale and we took appropriate measures to restrict transfer.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
c) Exhibits:
10.1* Securities Purchase Agreement with DLC dated May 18, 2006
10.2* Convertible Note with DLC dated May 18, 2006
10.3* Stock Purchase Warrant with DLC dated May 18, 2006
10.4* Registration Rights Agreement with DLC dated May 18, 2006
* Filed herewith.
SIGNATURES
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Pursuant to the requirement 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.
THE WORLD GOLF LEAGUE, INC.
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May 25, 2006
/s/ Michael S. Pagnano
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Michael S. Pagnano
Chief Executive Officer