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): September 10, 2008
PURPLE
BEVERAGE COMPANY, INC.
(Exact
Name of Registrant as Specified in Charter)
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Nevada
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000-52450
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01-0670370
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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450
East Las Olas Blvd, Suite 830
Fort
Lauderdale, Florida
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33301
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
(954)
462-8757
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(Former
Name or Former Address, if Changed Since Last
Report)
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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:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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As
previously disclosed on Form 8-K filed on September 4, 2008, with the Securities
and Exchange Commission (the “SEC”), Purple Beverage Company, Inc. (the
“Company”) sought, and as of September 10, 2008, entered into, amendments to the
terms of its Subscription Agreements and warrants sold in its December 2007
private placement.
As
a
result of the amendments: (i) the Company issued newly-issued shares of
restricted common stock, in an amount equal to 15% of the number of shares
into
which each unexercised $2.00 warrant outstanding was exercisable, and each
$2.00
warrant (other than $2.00 warrants exercised or exercisable for registered
shares) will be forfeited and cancelled; (ii) the exercise price of all $2.00
warrants registered with the SEC has been adjusted to $0.40 per share; and
(iii)
the Company issued all previous purchasers of shares of common stock at prices
over $0.40 per share additional shares of common stock so that their effective
purchase price per share will be equal to $0.40 per share.
Accordingly,
after giving effect to the foregoing amendments, the Company issued
7,523,447
shares
of
common stock and after giving effect of such issuance, the Company’s outstanding
common stock will increase to 68,374,896 shares. In addition, the Company has
warrants to purchase 4,624,200 shares at an exercise price of
$0.40.
Additional
terms are set forth in the Company’s Current Report on Form 8-K dated September
4, 2008 filed with the SEC, which are incorporated herein by
reference.
Market-Standoff
The
terms
of the market standoff adopted pursuant to the amendment also provides that
the
subscribers’ agreements to refrain from sales at the request of an underwriter
or placement agent will be limited to a maximum of 9 months. The market standoff
will expire no later than 90 days following the date on which the Company enters
into an underwriting or placement agent agreement for a public offering. There
is also a condition that the Company’s officers, directors and major
shareholders will enter into equivalent market standoff agreements. In the
event
of any modification or release, all subscribers subject to the market standoff
will benefit on a pro rata basis and be treated comparably.
Warrant
Assignment Agreement
In
connection with the amendments, the Company may agree to the assignment and
exercise of $2.00 warrants at adjusted exercise prices to be agreed by
negotiation, or $0.40 per share as a maximum exercise price. In addition the
Company agreed to pursue a registered offering of its securities and to
file a registration statement with the SEC and use its best efforts to submit
an
American Stock Exchange or other national exchange listing application prior
to
January 30, 2009. The Company does not presently qualify for approval of an
original listing application with any national securities exchange and no $2.00
warrants have been exercised.
Consulting
Agreement
On
September 15, 2008, the Company entered into a consulting agreement (the
“Consulting Agreement”) with a consultant (the “Consultant”). The Consulting
Agreement will terminate on September 15, 2009 or within 30 days prior written
notice of either the Company or Consultant. Consultant will provide consulting
services including (i) assisting the Company in formulating potential business
and acquisition strategies and (ii) general business advice and business
development. For the provision of his consulting services, Consultant will
receive 2,500,000 shares of the Company’s common stock, par value $0.001 per
share (“Common Stock”) in consideration of bridge loans advanced by Consultant
and 2,000,000 shares of Common Stock issued under the Company’s 2007 Incentive
Plan.
Amendment
of 2007 Incentive Plan
On
September 15, 2008, the board of directors of the Company amended the 2007
Incentive Plan (the “Plan”) in order to increase the amount of restricted shares
or restricted share units that an individual can receive in one Plan Year (as
defined in the plan) from 1,000,000 shares to 2,000,000 shares.
Waiver
On
September 15, 2008, Theodore Farnsworth, Chief Executive Officer waived all
right to receive 2,000,000 shares of Common Stock granted pursuant to options
exercisable under the 2007 Incentive Plan (the “Plan”) of Venture Beverage
Company, which options were cancelled, deemed null and void, have no further
effect and are now available for re-issuance under the Plan. The Company will
issue 2,000,000 shares of restricted stock to the Consultant pursuant to the
Plan.
The
foregoing is not a complete summary of the terms of the material agreements
described in this Item 1.01, and reference is made to the complete text of
all
material agreements described in Item 9.01.
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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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On
September 12, 2008, the Company issued a Promissory Note in favor of a
lender (the “Note”) in the principal amount of $500,000. The Note
bears interest on the unpaid principal balance at a rate of 5% per annum. All
principal and accrued interest on the Note is due and payable on October
13, 2008. If the Company defaults on the Note, the Company will be
obligated to pay interest on amounts past due at a rate of 18% per annum. At
present, the Company has received $250,000 subject to the terms
of Note.
The
foregoing is not a complete summary of the terms of the material agreements
described in this Item 2.03, and reference is made to the complete text of
all
material agreements described in Item 9.01.
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Item
2.04.
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Triggering
Events That Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet
Arrangement.
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On
August
8, 2008, the Company issued a promissory note in favor of Chelsea Development
International LTD in the principal amount of $250,000 (the “Chelsea Note”). The
Chelsea Note matured on September 8, 2008. Accordingly, the Company is currently
in default under the terms of the Chelsea Note.
On
June
6, 2008 the Company, issued to Ben Rabinowitz (“Rabinowitz”) a promissory note
in the outstanding principal amount of $250,000 (the “First Rabinowitz Note”).
On June 24, 2008 the Company, issued Rabinowitz a promissory note in the
outstanding principal amount of $250,000 (the “Second Rabinowitz Note” and
collectively with the First Rabinowitz Note, the “Rabinowitz Notes”). The First
Rabinowitz Note matured on August 6, 2008. The Second Rabinowitz Note matured
on
August 24, 2008. The Company has the ability to extend the maturity date of
each
of the Rabinowitz Notes for up to two 30-day periods in exchange for the
Company’s prompt issuance of 25,000 shares of Common Stock for each 30-day
extension for each Rabinowitz Note. Additionally, in accordance with the terms
of the Rabinowitz Notes, an event of default has occurred as a result of the
default under the Chelsea Note.
On
July
16, 2008, the Company issued a promissory note to Jay-2 Investments, LLC in
the
principal amount of $1,000,000 (the “Jay-2 Note”). In accordance with the terms
of the of the Jay-2 Note, an event of default has occurred as a result of the
default under the Rabinowitz Notes and the Chelsea Note. Upon the occurrence
of
the default, the interest rate on the Jay-2 Note became 18% per annum.
The
Company is currently in discussions with its various lenders regarding the
extensions of the maturity date of the notes, as applicable, and/or waivers
with
respect to each of the notes in default.
The
foregoing is not a complete summary of the terms of the material agreements
described in this Item 2.04, and reference is made to the complete text of
all
material agreements described in Item 9.01.
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Item
5.02.
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Departure
of Directors of Certain Officers; Election of Directors; Appointment
of
Certain Officers; Compensatory Arrangements of Certain Officers.
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On
September 15, 2008, Michael W. Wallace, Chief Financial Officer of the Company
ceased to perform his respective duties. On September 15, 2008, the board of
directors of the Company appointed Theodore Farnsworth as the principal
financial and principal accounting officer of the Company.
Theodore
Farnsworth, 46, has served as the Company’s chief executive officer, president,
secretary and as a director since December 2007. Mr. Farnsworth was the chief
executive officer, president, secretary and as a director of Venture Beverage
Company from May 2007 to December 2007. From September 2001 to October 2007,
Mr.
Farnsworth served as chairman of Xstream Beverage Network, Inc. and from
November 2004 to November 2007, Mr. Farnsworth served as Xstream Beverage
Network, Inc.’s chief executive officer. Prior to that, from April 1998 to March
2001, Mr. Farnsworth served as chairman and founder of Farmbid.com, an
agricultural Internet portal site. From May 1997 to March 1998, Mr. Farnsworth
was president of Fontal Restaurant Group, Inc., parent of Burrito Grill
restaurants.
In July
2008, the Company issued two short-term notes payable to Theodore Farnsworth,
totaling $200,000 and, bearing annual interest of 2.42%, with unspecified
maturity periods. The notes were each for $100,000, and one of the $100,000
notes was repaid in July 2008.
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Item
7.01.
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Regulation
FD Disclosure.
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The
Company authorized additional amendments to the Subscription Agreements, and
the
2007 Warrants subject to receipt of approval required under the Subscription
Agreement. Upon receipt by the Company of the requisite consents as set forth
in
the Subscription Agreement and acceptance by the Company, the prior amendment
to
the Subscription Agreement will be amended to confirm that the exercise price
of
the $2.00 warrants assigned by the holder thereof shall be the price determined
by negotiation by the Company and any holder or assignee thereof. All applicable
anti-dilution, price protection and most favored nations provisions of the
Subscription Agreement will be determined in accordance with the to be
negotiated exercise price of the $2.00 warrants. In addition, the proposed
amendment eliminates the requirement that the Company to obtain approval to
file
a registration statement with the SEC.
The
foregoing is not a complete summary of the terms of the material agreements
described in this Item 7.01, and reference is made to the complete text of
all
material agreements described in Item 9.01.
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Item
9.01.
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Financial
Statements and Exhibits.
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(d)
Exhibits
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Exhibit
No.
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Description
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10.1*
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Form
of Subscription Agreement, dated as of December 12,
2007
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10.2*
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Form
of Common Stock Purchase Warrant, dated as of December 12,
2007
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10.3**
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Amendment
to Subscription Agreement and to Common Stock Purchase Warrant to
Purchase
Shares of Purple Beverage Company, Inc., dated as of April 2, 2008
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10.4***
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Amendment
No. 2 to Subscription Agreement and to Common Stock Purchase Warrant
to
Purchase Shares of Purple Beverage Company, Inc.
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10.5***
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Form
of Warrant Assignment Agreement
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10.6
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Amendment
No. 3 to Subscription Agreement and to Common Stock Purchase Warrant
to
Purchase Shares of Purple Beverage Company, Inc.
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10.7
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500,000
Promissory Note, dated September 12, 2008
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10.8
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Consulting
Agreement dated September 15, 2008
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10.9
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Amendment
No. 1 to 2007 Incentive Plan
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10.10
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Waiver
Letter executed by Theodore Farnsworth dated September 15,
2008
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10.11****
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$250,000
Promissory Note to Chelsea Development International LTD, dated August
8,
2008
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10.12****
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$1,000,000
Promissory Note to Jay-2 Investments, LLC dated July 16,
2008
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*
Previously filed as Exhibits 10.7 and 10.8, respectively to Current Report
on
Form 8-K/A
filed
December 17, 2007.
**
Previously filed as Exhibit 10.1 to Current Report on Form 8-K filed April
4,
2008.
***
Previously filed as Exhibits 10.4 and 10.5, respectively to Current Report
on
Form 8-K filed September 3, 2008.
****
Previously filed as Exhibits 10.2 and 10.6, respectively to Current Report
on
Form 8-K filed September 9, 2008.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Purple
Beverage Company, Inc.
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Dated:
September 16, 2008
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By:
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/s/
Theodore
Farnsworth
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Name:
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Theodore
Farnsworth
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Title:
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Chief
Executive Officer
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INDEX
TO EXHIBITS
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Exhibit
No.
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Description
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10.1*
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Form
of Subscription Agreement, dated as of December 12,
2007
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10.2*
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Form
of Common Stock Purchase Warrant, dated as of December 12,
2007
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10.3**
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Amendment
to Subscription Agreement and to Common Stock Purchase Warrant
to Purchase
Shares of Purple Beverage Company, Inc., dated as of April 2, 2008
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10.4***
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Amendment
No. 2 to Subscription Agreement and to Common Stock Purchase Warrant
to
Purchase Shares of Purple Beverage Company, Inc.
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10.5***
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Form
of Warrant Assignment Agreement
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10.6
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Amendment
No. 3 to Subscription Agreement and to Common Stock Purchase Warrant
to
Purchase Shares of Purple Beverage Company, Inc.
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10.7
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500,000
Promissory Note, dated September 12, 2008
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10.8
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Consulting
Agreement dated September 15, 2008
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10.9
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Amendment
No. 1 to 2007 Incentive Plan
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10.10
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Waiver
Letter executed by Theodore Farnsworth dated September 15,
2008
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10.11****
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$250,000
Promissory Note to Chelsea Development International LTD, dated
August 8,
2008
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10.12****
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$1,000,000
Promissory Note to Jay-2 Investments, LLC dated July 16,
2008
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*
Previously filed as Exhibits 10.7 and 10.8, respectively to Current Report
on
Form 8-K/A
filed
December 17, 2007.
**
Previously filed as Exhibit 10.1 to Current Report on Form 8-K filed April
4,
2008.
***
Previously filed as Exhibits 10.4 and 10.5, respectively to Current Report
on
Form 8-K filed September 3, 2008.
****
Previously filed as Exhibits 10.2 and 10.6, respectively to Current Report
on
Form 8-K filed September 9, 2008.
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