Wellstar International, Inc. - Current report filing (8-K)
06 Maio 2008 - 6:20PM
Edgar (US Regulatory)
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC
20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date of
Report (Date of earliest reported): April 25, 2008
Wellstar
International, Inc.
(Exact
name of registrant as specified in charter)
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Nevada
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333-130295
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20-1834908
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(State or
Other Jurisdiction of Incorporation or
Organization)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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6911
Pilliod Road
Holland,
Ohio 43528
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code: (419) 865-0069
Copies
to:
Darrin
M. Ocasio, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway, 32
nd
FL
New
York, New York 100
Phone:
(212) 930-9700
Fax:
(212) 930-9725
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))
Item
1.01 Entry Into A Material Definitive Agreement
On April
25, 2008, Wellstar International Inc. (the “Company”) completed a private
placement of $190,000.00 of securities (“Purchase Agreement”) with a number of
investors (“Purchasers”). The securities comprise (i) 8% secured
convertible callable notes of the Company (“Notes”) in an aggregate principal
amount of $325,000.00, convertible into common stock of the Company at
conversion price to be determined by the formula set forth in the Purchase
Agreement (the “Conversion Price”) subject to certain possible
adjustments, and (ii) warrants (each a “Warrant”), providing a
right to purchase 20,000,000 shares of common stock of the Company at an
exercise price of $.0001 per share having a term ending five years from the
closing date. Upon the filing of a proxy by the Company with the
Securities and Exchange Commission (the “Funding Date”) to increase the
authorized common stock of the Company, the Company shall issue and sell to the
Buyers and the Buyers severally agree to purchase from the Company an aggregate
of an additional One Hundred Thirty Five Thousand Dollars ($135,000) principal
amount of Notes.
The
Conversion Price shall be the lesser of (i) the Variable Conversion Price (as
defined below) and (ii) the Fixed Conversion Price (as defined below) (subject,
in each case, to equitable adjustments for stock splits, stock dividends or
rights offerings by the Company relating to the Company’s securities or the
securities of any subsidiary of the Company, combinations, recapitalization,
reclassifications, extraordinary distributions and similar
events). The “Variable Conversion Price” shall mean the Applicable
Percentage (as defined below) multiplied by the Market Price (as defined
below). “Market Price” means the average of the lowest three (3)
Trading Prices (as defined below) for the common stock during the twenty (20)
Trading Day period ending one Trading Day prior to the date the Conversion
Notice is sent by the Holder to the Borrower via facsimile (the “Conversion
Date”). “Trading Price” means, for any security as of any date, the
intraday trading price on the Over-the-Counter Bulletin Board, or applicable
trading market (the “OTCBB”) as reported by a reliable reporting service
(“Reporting Service”) mutually acceptable to Company and holder and
hereafter designated by holders of a majority in interest of the Notes and
the Company or, if the OTCBB is not the principal trading market for such
security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded
or, if no intraday trading price of such security is available in any of the
foregoing manners, the average of the intraday trading prices of any market
makers for such security that are listed in the “pink sheets” by the National
Quotation Bureau, Inc. If the Trading Price cannot be calculated for
such security on such date in the manner provided above, the Trading Price shall
be the fair market value as mutually determined by the Company and the
holders of a majority in interest of the Notes being converted for which the
calculation of the Trading Price is required in order to determine the
Conversion Price of such Notes. “Trading Day” shall mean any day on
which the Common Stock is traded for any period on the OTCBB, or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded. “Applicable Percentage” shall mean
32.5%. The “Fixed Conversion Price” shall mean $.12.
The
Purchase Agreement calls for the issuance of Warrants comprising the right to
purchase up to 20,000,000 shares of common stock of the Company at an exercise
price of $.0001 per share. The Warrants expire five years from the closing date.
The Warrants may be exercised for cash or on a cashless basis and are subject to
certain other conditions.
The
Company has entered into a “Registration Rights Agreement,” pursuant to which it
is obligated to file a registration statement to register all or the
maximum amount permitted by the SEC (collectively the “Maximum Amount”) of the
common stock of the Company underlying the Notes and Warrants (the
“Conversion Shares”), which contains certain liquidated damages if not timely
filed. The Company shall prepare, and, on or prior to ten (10) days from the
date of receipt of written demand of the Purchasers (in the Purchase Agreement)
(the “Filing Date”), file with the SEC a Registration Statement on Form S-3 (or,
if Form S-3 is not then available, on such form of Registration Statement as is
then available to effect a registration of the Registrable Securities, subject
to the consent of the Initial Investors, which consent will not be unreasonably
withheld) covering the resale of the Registrable Securities underlying the Notes
and Warrants issued or issuable pursuant to the Purchase Agreement, which
Registration Statement, to the extent allowable under the 1933 Act and the rules
and regulations promulgated thereunder (including Rule 416), shall state that
such Registration Statement also covers such indeterminate number of additional
shares of common stock as may become issuable upon conversion of or otherwise
pursuant to the Notes and exercise of the Warrants to prevent dilution resulting
from stock splits, stock dividends or similar transactions. The
number of shares of common stock initially included in such Registration
Statement shall be no less than an amount equal to the number of Conversion
Shares that are then issuable upon conversion of the Notes without regard to any
limitation on the Investor’s ability to convert the Notes. The
Company acknowledges that the number of shares initially included in the
Registration Statement represents a good faith estimate of the maximum number of
shares issuable upon conversion of the Notes and upon exercise of the
Warrants.
The
Company and all of its subsidiaries (each, a “Debtor”) entered into a Security
Agreement and an Intellectual Property Security Agreement pursuant to which they
granted to the Purchasers and their assigns to a security interest in all of the
assets of the Debtors (the “Collateral”), including a pledge by the Company of
all of the intellectual property of the Company and of each of its subsidiaries.
Upon an Event of Default under the Security Agreement, the Agent may exercise
all rights available to any of the Purchasers, including to take possession of
the Collateral and to operate the business of each Debtor.
Item
9.01 Financial Statements and Exhibits
(a)
Financial statements of business acquired.
Not
applicable.
(b) Pro
forma financial information.
Not
applicable.
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10.1
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Form of the
Securities Purchase Agreement by and between the Company and the
Purchasers.
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10.2
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Form of the
Registration Rights Agreement by and between the Company and the
Purchasers.
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10.3
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Form of the 8%
Secured Convertible Callable Note by and between the Company and the
Purchasers.
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10.4
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Form of the
Stock Purchase Warrant by and between the Company and the
Purchasers.
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10.5
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Form of the
Security Agreement, dated April 25, 2008.
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10.6
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Form of the
Intellectual Property Security Agreement, dated April 25,
2008.
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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 hereunto
duly authorized.
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WELLSTAR INTERNATIONAL,
INC.
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Date: May 6,
2008
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By:
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/s/
John Antonio
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Name: John
Antonio
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President and Chief Executive
Officer
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