Unassociated Document
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)March
30, 2007
ACORN
FACTOR, INC.
(Exact
name of Registrants as Specified in their Charters)
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Delaware
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0-19771
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22-2786081
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(States
or Other Jurisdiction
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(Commission
file Numbers)
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(IRS
Employer
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of
Incorporation)
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Identification
Nos.)
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200
Route 17, Mahwah, New Jersey
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07430
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrants'
telephone number, including area code (201)
529-2026
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:
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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| o |
Soliciting
material pursuant to Rule 14a-2 under the Exchange Act (17 CFR
240.14a-2)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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| o |
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 Entry Into a Material Definitive Agreement
Item
3.02 Unregistered Sales of Equity Securities
On
March
30, 2007, Acorn Factor, Inc. (the “Company”) conducted an initial closing of a
private placement of 10% Convertible Redeemable Subordinated Debentures due
March 2011 (the “Debentures”).
At
the
initial closing the Company issued $4,281,000 principal amount of the
Debentures, at par, and received gross proceeds in such amount.
From
the
date of issuance of the Debentures to and including, the first anniversary
of
the initial closing, 50% of the outstanding principal amount of the Debentures
is convertible into shares of the Company’s Common Stock at a price of $3.80 per
share. Following the first anniversary of the initial closing, the Debentures
are convertible up to the entire principal amount then outstanding.
By
the
terms of the offering, each subscriber, in addition to the Debentures, received
a warrant exercisable for the purchase of a number of shares equal to 25% of
the
principal amount of the Debentures purchased by such subscriber, divided by
the
conversion price of $3.80, resulting in the issuance at the initial closing
of
Warrants to purchase 281,656 shares. The Warrants are exercisable for
shares of the Company’s Common Stock for five years at an exercise price of
$4.50 per share and are callable by the Company in certain circumstances.
Under
the
terms of the Debentures, provided that a registration statement covering the
resale by the investors in the placement of the shares underlying the Debentures
and Warrants is effective, the Company may redeem the outstanding principal
amount of the Debentures, at par, in whole or in part, with accrued interest
through the date of redemption.
The
Debentures bear interest at the rate of 10% per annum, payable quarterly. If
the
Company fails to redeem at least 50% of the total outstanding principal amount
of the Debentures, together with interest accrued thereon, by the first
anniversary of the initial closing, the annual rate of interest payable on
the
Debentures will be increased to 12%.
In
connection with the offering, the Company retained a registered broker-dealer
to
serve as placement agent. According to the terms of the agreement, the placement
agent is entitled to receive a 7% selling commission, 3% management fee, and
2%
non-accountable expense allowance, out of the gross proceeds of the offering.
In
addition, the placement agent is entitled to warrants on substantially the
same
terms as those issued to the subscribers, exercisable for the purchase of the
number of shares equal to 10% of the total principal amount of the Debentures
sold, divided by the conversion price of $3.80. Out of the gross proceeds
received at the initial closing, the Company paid the placement agent
commissions and expenses of $513,720 and issued to the placement agent warrants
to purchase 112,658 shares of Common Stock.
Under
the
terms of the offering, the Company may raise gross proceeds of up to an
aggregate of $6,900,000 from the sale of Debentures in the placement. (including
the Debentures issued at the initial closing). The offering commenced on March
8, 2007 and is expected to terminate on or before April 16, 2007.
Under
the
terms of the offering, the Company is required to file a registration statement
covering the shares of Common Stock underlying the Debentures and the Warrants
within 30 days of the filing of the Company’s Annual Report on Form 10-K for its
fiscal year ended December 31, 2006. If the registration statement is not
declared effective within 120 days of the date of such filing, the Company
will
be required to pay liquidated damages to the subscribers equal to 1.0% of the
total amount invested, prprated on a daily basis, for each 30 day period that
the registration statement is not effective, up to an aggregate of
11.25%.
The
issuance and sale of the Common Stock and Warrants was made to accredited
investors in reliance upon the exemption provided in Section 4(2) of the
Securities Act of 1933, as amended (the “Securities Act”). As such, the
securities sold in the offering and/or issuable upon the conversion or exercise
thereof have not been registered under the Securities Act and may not be offered
or sold in the United States absent registration or an applicable exemption
from
the registration requirements. No form of general solicitation or general
advertising was conducted in connection with offering. Each of the the
securities sold in the offering and/or issuable upon the conversion or exercise
thereof will contain restrictive legends preventing the sale, transfer or other
disposition of such securities, unless registered under the Securities Act.
In
connection with the initial closing, the Company issued the press release
annexed as Exhibit 99.1 hereto.
Item
9.01 Financial Statements and Exhibits.
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99.1
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Press
Release dated April 2, 2007.
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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 on this 2nd
day of
April 2007.
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ACORN
FACTOR,
INC. |
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By: |
/s/
Sheldon Krause |
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Name:
Sheldon Krause
Title:
Secretary and General Counsel
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