UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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): July
11, 2007
TRIBEWORKS,
INC.
(Exact
Name of Registrant as Specified in Charter)
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001-28675
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94-337095
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(Commission
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(IRS
Employer
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of
Incorporation)
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File
Number)
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Identification
No.)
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2001
152ND AVENUE NE, REDMOND WA
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98052
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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: (425)
458-2360
(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
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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))
Section
1—Registrant’s Business and Operations
| Item
1.01. |
Entry
into a Material Definitive
Agreement.
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On
July
11, 2007, Atlas Technology Group (US), Inc., a Delaware corporation
(“Atlas
US”),
and a
wholly owned subsidiary of Tribeworks, Inc., a Delaware corporation (the
“Registrant”),
and
West Coast Opportunity Fund, LLC, a Delaware limited liability company
(“WCOF”),
completed
the second closing (the “Second
Closing”)
of an
equity and debt financing pursuant to a Securities Purchase Agreement, dated
June 15, 2007, (the “Securities
Purchase Agreement”)
by and
among the Registrant, Atlas US and WCOF. The
terms
of the Securities Purchase Agreement are detailed in Item 1.01 of Registrant’s
Current Report on Form 8-K filed June 15, 2007.
Pursuant
to the Securities Purchase Agreement, Atlas US agreed to issue and sell to
WCOF
two senior secured non-convertible promissory notes, an initial note in the
amount of $2,500,000 (the “Initial
Note”)
was
issued on June 15, 2007 and a second promissory note in the amount of $2,500,000
(the “Second
Note”
and
together with the Initial Note, the “Promissory
Notes”),
was
issued on July 11, 2007. Interest on the Second Note will be calculated at
an
annual rate of 5% and is due and payable bi-annually. Interest on the Second
Note will increase to 7.5% upon the occurrence of one of the events of default
of the Second Note or the Pledge and Security Agreement, dated June 15, 2007,
by
and among the Registrant, all of its subsidiaries and WCOF (the “Security
Agreement”).
These
events of default are set forth in Item 1.01 of the Registrant’s Current Report
on Form 8-K filed June 15, 2007. The Second Note must be paid in full by
November 30, 2008.
Upon
the
issuance of the Second Note, the Registrant issued WCOF warrants (the
“Warrants”)
for
the purchase of 3,250,000 shares of common stock of the Registrant. The Warrants
are exercisable for a period of five years at a price of $2.60 per share. The
Registrant is permitted to force the exercise of the Warrants if the Common
Stock of the Registrant closes at a price above $10.00 per share for 20 out
of
30 days, certain trading volume requirements are satisfied and the resale of
the
common stock underlying the Warrants has been registered with the U.S.
Securities and Exchange Commission (the “SEC”)
and
such registration statement has been declared effective.
In
connection with the Second Closing, the Registrant also issued and sold an
additional 3,250,000 shares of Common Stock to WCOF for a purchase price of
$1,000 upon the issuance of the Second Note. Pursuant to a registration rights
agreement (the “Registration
Rights Agreement”),
the
Registrant is required to register the resale of the shares of Common Stock
and
the resale of the shares underlying the Warrants (the “Registrable
Securities”)
with
the SEC within ninety (90) days of June 15, 2007.
Pursuant
to the terms of an escrow agreement (the “Escrow
Agreement”)
between Atlas US, WCOF and Wells Fargo Bank, N.A., upon the Second Closing
the
entire proceeds of the Second Note were placed into an escrow account and will
not be released from escrow unless Atlas US, the Registrant or any of its
subsidiaries enters into contracts with certain entities, totaling $5,000,000
in
non-contingent future revenues prior to 5:00 p.m. on December 31,
2007.
In
the
event that Atlas US, the Registrant or any of its subsidiaries has not entered
into the contracts described above, the amounts in the escrow account will
be
returned to WCOF and will be applied to the repayment of the Promissory Notes.
The
foregoing description of the Second Note is qualified in its entirety by
reference to the Second Note, a copy of which is filed as Exhibit 10.1, such
Exhibit is incorporated by reference. The foregoing description of the
Securities Purchase Agreement, the Security Agreement, the Escrow Agreement,
the
Registration Rights Agreement and the Warrants are qualified in their entirety
by reference to the Securities Purchase Agreement, the Security Agreement,
the
Escrow Agreement, the Registration Rights Agreement, and the Warrants, copies
of
which are filed as Exhibits 10.1, 10.3, 10.5, 10.6 and 10.7, to the Registrant’s
Current Report on Form 8-K filed June 15, 2007, and such Exhibits are
incorporated herein by reference.
Section
2—Financial Information
| Item
2.03. |
Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a
Registrant.
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On
July
11, 2007, pursuant to the terms of the Second Note, Atlas US became obligated
on
a material direct financial obligation. The
information in Item 1.01 is incorporated herein by reference.
Section
3—Securities and Trading Markets
| Item
3.02. |
Unregistered
Sales of Equity
Securities.
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Pursuant
to the terms of the Securities Purchase Agreement and Second Note, on July
11,
2007 the Registrant issued 3,250,000 shares of Common Stock in exchange for
a
purchase price of $1,000, and the Registrant issued a promissory note in the
amount of $2,500,000, and 3,250,000 Warrants in exchange for
$2,500,000.
The
resale of the Common Stock and shares underlying the Warrants will be registered
pursuant to the terms of the Registration Rights Agreement between the
Registrant and WCOF.
The
issuance and sale of the Promissory Notes by Atlas US, and the issuance and
sale
of the Common Stock and Warrants by the Registrant (collectively, the
“Securities”)
were
exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933 by virtue of Section 4(2) and Regulation D promulgated
under the Securities Act. The Securities were issued directly by Atlas US and
the Registrant, as applicable, and did not involve a public offering or general
solicitation. WCOF is an “Accredited Investor” as defined in Rule 501 of
Regulation D.
Section
9—Financial Statements and Exhibits
| Item
9.01. |
Financial
Statements and Exhibits.
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Exhibit
No.
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Description
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10.1
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Promissory
Note, dated July 11, 2007, between Atlas Technology Group (US),
Inc. and
West Coast Opportunity
Fund
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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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TRIBEWORKS,
INC.
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| Date:
July
13, 2007 |
By: /s/
Peter B.
Jacobson |
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Name: Peter
B. Jacobson
Title: Chief
Executive Officer
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