UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
November 2, 2004
(Date of earliest event reported)
vFINANCE, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-11454-03 58-1974423
(State or Other Jurisdiction of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
3010 North Military Trail
Suite 300
Boca Raton, Florida 33431
(Address of Principal Executive Offices)
(561) 981-1000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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 Instructions 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 2.01. Completion of Acquisition or Disposition of Assets.
On November 2, 2004, vFinance, Inc.'s (the "Company") wholly-owned subsidiary,
vFinance Investments Holdings, Inc. ("vFinance Investments"), completed its
acquisition of certain assets of Global Partners Securities, Inc. ("Global") and
100% of the issued and outstanding equity securities of EquityStation, Inc.
("EquityStation"), all of which were owned by Level2.com, Inc. ("Level2"), a
subsidiary of Global. These transactions are subject to the approval of the
National Association of Securities Dealers, Inc.
The assets acquired from Global included certain intellectual property, customer
accounts, computer equipment, and certain clearance and trading agreements
relating to emerging market debt trading, wholesale market-making in selected
equities for institutional clients, and direct-access equity trading. vFinance
Investments assumed no liabilities in connection with the acquisition of
Global's assets. Two of the principals of Global and Equity each entered into
employment agreements with the Company which provided an annual base salary of
$144,000, certain incentive bonuses, and options to purchase 350,000 shares of
the Company's common stock, $0.01 par value (the "Common Stock"). The options
are exercisable at $0.19 per share, and vest ratably over a three year period.
In accordance with the terms of the acquisition agreements, the Company
delivered into escrow 8,324,690 restricted shares (the "Shares") of the Common
Stock, and warrants (the "Warrants") to purchase 3,299,728 shares of the Common
Stock at a price of $0.11 per share. All of the shares of EquityStation were
also delivered into escrow. Subject to (a) any indemnification claims under the
acquisition agreements and (b) the financial performance of EquityStation and
the business of Global acquired by vFinance Investments over the periods
specified in the escrow agreement, all or a portion of the Shares and the
Warrants will be distributed to Global and Level2. When the escrow agreement is
terminated, all of the shares of EquityStation will be distributed to vFinance
Investments, and the holders of the Shares and Warrants will be entitled to
certain piggyback registration rights. The Company also entered into a
standstill agreement with each of Marcos Konig, Harry Konig and Salomon Konig,
to provide restrictions on certain actions for a defined time period.
In connection with the acquisitions, Scott J. Saunders ("Saunders") received
150,000 restricted shares of the Common Stock. The shares received by Saunders
are not subject to the escrow agreement, registration rights agreement or
standstill agreement.
The preceding summary of the acquisitions is qualified in its entirety by
reference to each of the agreements attached hereto as Exhibits 2.1 and 2.2,
Exhibits 4.1 and 4.2, Exhibits 10.1 and 10.2 and Exhibit 99, which are
incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information provided under Item 2.01 of this initial report on Form 8-K is
incorporated herein by reference.
Global, Level2 and Saunders are all "accredited investors" as defined under Rule
501 of Regulation D promulgated under the Securities Act of 1933, as amended.
The Company relies on Rule 506 of Regulation D as the applicable exemption from
registration for the securities issued.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
To be filed by amendment as soon as practicable, but not later than 71 calendar
days after the date that the initial report on Form 8-K must be filed.
(b) Pro forma financial information.
To be filed by amendment as soon as practicable, but not later than 71 calendar
days after the date that the initial report on Form 8-K must be filed.
(c) Exhibits.
2.1* Asset Purchase Agreement, dated November 2, 2004, by and between
vFinance Investments Holdings, Inc. and Global Partners Securities, Inc.
2.2* Stock Purchase Agreement, dated November 2, 2004, by and between vFinance
Investments Holdings, Inc. and Level2.com, Inc.
4.1 Registration Rights Agreement, dated November 2, 2004, by and among
vFinance, Inc., Global Partners Securities, Inc. and Level2.com, Inc.
4.2 Form of Common Stock Purchase Warrant
10.1 Stock Escrow Agreement, dated November 2, 2004, by and among vFinance
Investments Holdings, Inc., vFinance, Inc., Global Partners Securities,
Inc., Level2.com, Inc., and Edwards & Angell, LLP
10.2 Standstill Agreement, dated November 2, 2004, by and among vFinance, Inc.
and each of Marcus Konig, Harry Konig and Salomon Konig
99 Press release issued by vFinance, Inc. on November 3, 2004
*Pursuant to Item 601(b)(2) of Regulation S-B, the exhibits and schedules have
been omitted and will be provided to the Commission upon request.
SIGNATURE
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.
vFINANCE, INC.
By: /s/ Leonard J. Sokolow
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Name: Leonard J. Sokolow
Title: Chief Executive Officer
Date: November 8, 2004
EXHIBIT INDEX
Exhibit Description
2.1* Asset Purchase Agreement, dated November 2, 2004, by and
between vFinance Investments Holdings, Inc. and Global
Partners Securities, Inc.
2.2* Stock Purchase Agreement, dated November 2, 2004, by and
between vFinance Investments Holdings, Inc. and Level2.com, Inc.
4.1 Registration Rights Agreement, dated November 2, 2004, by and
among vFinance, Inc., Global Partners Securities, Inc. and
Level2.com, Inc.
4.2 Form of Common Stock Purchase Warrant
10.1 Stock Escrow Agreement, dated November 2, 2004, by and among
vFinance Investments Holdings, Inc., vFinance, Inc., Global
Partners Securities, Inc., Level2.com, Inc., and Edwards &
Angell, LLP
10.2 Standstill Agreement, dated November 2, 2004, by and among
vFinance, Inc. and each of Marcus Konig, Harry Konig and Salomon
Konig
99 Press release issued by vFinance, Inc. on November 3, 2004
*Pursuant to Item 601(b)(2) of Regulation S-B, the exhibits and schedules have
been omitted and will be provided to the Commission upon request.