- Current report filing (8-K)
February 19 2009 - 5:14PM
Edgar (US Regulatory)
UNITED
STATES
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, 2009
____________________________
DIGITALFX
INTERNATIONAL, INC.
(Exact
name of registrant as specified in charter)
Florida
(State or
other Jurisdiction of Incorporation or Organization)
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001-33667
(Commission
File Number)
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65-0358792
(IRS
Employer Identification No.)
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3035
East Patrick Lane
Suite
#9
Las
Vegas, NV 89120
(Address
of Principal Executive Offices and zip code)
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702-938-9300
(Registrant’s
telephone
number,
including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
240.14a-12(b))
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Safe Harbor Statement under
the Private Securities Litigation Reform Act of 1995
Information
included in this Form 8-K may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). This information may involve known and
unknown risks, uncertainties and other factors which may cause DigitalFX
International, Inc.’s (the “Registrant,” “we,” “our” or “us”) actual results,
performance or achievements to be materially different from future results,
performance or achievements expressed or implied by any forward-looking
statements. Forward-looking statements, which involve assumptions and
describe our future plans, strategies and expectations, are generally
identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of
these words or other variations on these words or comparable
terminology. Forward-looking statements are based on assumptions that
may be incorrect, and there can be no assurance that any projections or other
expectations included in any forward-looking statements will come to
pass. Our actual results could differ materially from those expressed
or implied by the forward-looking statements as a result of various
factors. Except as required by applicable laws, we undertake no
obligation to update publicly any forward-looking statements for any reason,
even if new information becomes available or other events occur in the
future.
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
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Item
3.02
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Unregistered
Sales of Equity Securities.
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On
December 22, 2008, the Registrant announced its entry into Amendment and
Exchange Agreements with each of the institutional investors (the “Investors”)
holding Amended and Restated Senior Secured Convertible Notes (the “Existing
Investor Notes”), pursuant to which, among other things, the parties agreed to
reduce the exercise price of outstanding Amended and Restated Warrants held by
the Investors to $0.24 (subject to adjustment as provided in the Amended and
Restated Warrants, including pursuant to economic anti-dilution adjustments),
the Registrant agreed to redeem in cash from the Investors an aggregate
principal amount of $650,000, and the Investors agreed to exchange their
Existing Investor Notes for a combination of (1) an aggregate of 5,520,000
shares of the common stock of WoozyFly Inc. owned by the Registrant and (2)
subject to the earlier of the AMEX’s approval of the listing of the Exchange
Shares (as defined below) and the shares underlying the Amended and Restated
Notes (as defined below) issued to the Investors, and the Common Stock being
listed on the OTC Bulletin Board (only if AMEX does not approve the additional
listing application by January 30, 2009), (A) Second Amended and Restated Senior
Secured Convertible Notes (“Amended and Restated Notes”) and (B) an aggregate of
up to 5,167,046 shares of Common Stock (subject to adjustment based on the date
on which such shares are issued) (the “Exchange Shares”). The
principal amount of the Amended and Restated Notes and the number of Exchange
Shares to be issued to the Investors were determined as of February 12, 2009,
upon which date 5,167,046 of the Exchange Shares were issued to the
Investors. The remaining transactions contemplated by the Amendment
and Exchange Agreements will close upon the exchange of the Existing Investor
Notes and the Amended and Restated Senior Secured Convertible Notes held by
Richard Kall for Amended and Restated Notes, and the issuance of the remaining
Exchange Shares.
In
connection with the closing the Registrant will issue to the Investors and
Richard Kall Amended and Restated Notes having an aggregate principal amount of
$968,914.87 (which amount accounts for unpaid interest through February 12,
2009). The Amended and Restated Notes will have a term expiring
November 30, 2010, carry interest at 7.50% per annum on the unpaid/unconverted
principal balance, payable quarterly in arrears in cash beginning April 1, 2009,
and will be secured on a senior basis against all of the assets of the
Registrant. The Registrant will also be required to make aggregate
monthly principal payments of $25,000, plus accrued interest thereon, beginning
July 1, 2009. The Amended and Restated Notes will be convertible at
the option of the holders thereof prior to their maturity into approximately
4,037,147 shares of Common Stock, based on a conversion price equal to $0.24 per
share (subject to adjustment as provided in the Amended and Restated Notes,
including pursuant to economic anti-dilution adjustments).
Additionally,
if at any time after the date the Amended and Restated Notes are issued, the
closing sale price of Common Stock equals or exceeds $0.288 for ten consecutive
trading days (as adjusted for any stock splits, stock dividends,
recapitalizations, combinations, reverse stock splits or other similar events
during such period) and provided that the Registrant has complied with certain
equity conditions, the Registrant will be able to require the holders to convert
50% of the remaining principal and accrued but unpaid interest of the Amended
and Restated Notes into Common Stock. If at any time beginning at
least 5 trading days from the date of the initial mandatory conversion, the
closing sale price of Common Stock equals or exceeds $0.312 for ten consecutive
trading days (as adjusted for any stock splits, stock dividends,
recapitalizations, combinations, reverse stock splits or other similar events
during such period) and provided that the Registrant has complied with certain
equity conditions, the Registrant will be able to require the holders to convert
the remaining principal and accrued but unpaid interest of the Amended and
Restated Notes into Common Stock.
The
holders of the Amended and Restated Notes will be entitled to accelerate the
maturity in the event that there occurs an event of default under the Amended
and Restated Notes, including, without limitation, if the Registrant fails to
pay any amount under the Amended and Restated Notes when due, if a judgment is
rendered against the Registrant in an amount set forth in the Amended and
Restated Notes, if the Registrant breaches any representation or warranty under
that certain Securities Purchase Agreement dated November 30, 2007, as amended,
or other transaction documents, or if the Registrant fails to comply with the
specified covenants set forth in the Amended and Restated
Notes. Among other covenants, the Amended and Restated Notes will
contain financial covenants whereby the Registrant is required to achieve
specified EBITDA (earnings before interest, tax, depreciation and amortization)
and revenue targets in each of the fiscal quarters during which the Amended and
Restated Notes are outstanding. Any failure by the Registrant to
achieve an EBITDA or revenue target will be considered a breach of the financial
covenant.
Also in
connection with the Amendment and Exchange Agreements, the Registrant agreed to
reimburse the fund manager of one of the Investors for its out-of-pocket
expenses incurred in connection with the transactions contemplated by the
Amendment and Exchange Agreements, including the actual and reasonable fees and
disbursements of the fund manager’s legal counsel, up to an aggregate amount of
$5,000.
The
issuance of the Amended and Restated Notes and the Exchange Shares is intended
to be exempt from registration under the Securities Act pursuant to Section
3(a)(9) thereof, as such securities were and will be exchanged by the Registrant
with existing security holders exclusively and no commission or other
remuneration was or will be paid or given directly or indirectly for soliciting
such exchange.
The
transaction documents, including the Agreement with Richard Kall, the form of
Amendment and Exchange Agreement and the form of Amended and Restated Note, were
attached to the Registrant’s Current Report on Form 8-K/A (File No. 001-33667),
filed with the SEC on December 24, 2008, as Exhibits 10.3, 10.4 and 10.5,
respectively, and are incorporated herein by reference.
Item
9.01 Financial
Statements and Exhibits.
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10.1
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Agreement
dated December 22, 2008, between the Registrant and Richard Kall
(1)
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10.2
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Form
of Amendment and Exchange Agreement dated December 22, 2008
(1)
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10.3
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Form
of Second Amended and Restated Senior Secured Convertible Note
(1)
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(1)
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Filed
as an exhibit to the Registrant’s Current Report on Form 8-K/A (File No.
001-33667), filed with the Securities and Exchange Commission on December
24, 2008.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, DigitalFX
International, Inc. has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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DigitalFX
International, Inc.
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Date: February
19, 2009
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By:
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/s/ Abraham
Sofer
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Abraham
Sofer
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President
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EXHIBIT INDEX
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Exhibit
Number
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Description of
Exhibit
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10.1
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Agreement
dated December 22, 2008, between the Registrant and Richard Kall
(1)
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10.2
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Form
of Amendment and Exchange Agreement dated December 22, 2008
(1)
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10.3
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Form
of Second Amended and Restated Senior Secured Convertible Note
(1)
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