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: April 21, 2003
FLEXXTECH CORPORATION
-----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada
-----------------------------------------------------------------------
(State or other jurisdiction of incorporation)
000-25499 88-0390360
------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
18 Technology Drive, Suite 140A
Irvine, CA 92618
------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(949) 753-7551
----------------
(Registrant's telephone number, including area code)
Infinite Technology Corporation
-------------------------------
(Registrant's Former name)
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS
On April 8th, 2003 we entered into a rescission agreement to rescind the
acquisition of W3M, Inc. (dba Paradigm Cabling Systems) from its inception. The
Rescission Agreement was made available in our 10-KSB filed on April 15, 2003
with the Commission and will also be filed with this report.
EXHIBIT 10.1 SUMMARY OF THE PARADIGM RESCISSION AGREEMENT - PARADIGM
RESCISSION AGREEMENT - In order to acquire eighty percent (80%) of the
outstanding common stock of Paradigm, the Company entered into a certain
Acquisition Agreement dated October 31, 2002 ("Purchase Agreement").
Pursuant to the terms of the acquisition, 80% of the outstanding capital
stock of Paradigm was transferred to the Company on said date. In
exchange, the Company agreed as soon as practical to issue shares of a new
Series A Convertible Preferred Stock of Flexxtech Corporation to the
exchanging shareholders of Paradigm as follows:
Name No. Of Shares of Series A Convertible Preferred
---------------- -----------------------------------------------
Michael Cummings 71.25 shares
Ashford Capital 71.25 shares
Total 142.50 shares
The Company and Paradigm desire to void the Transaction ab initio (that
is, at its inception), with the effect that Paradigm is the owner of its
Assets and Liabilities and the shares of the Company's Preferred Stock
issuable in the Transaction are restored to the status of authorized but
unissued shares of the Company. The Company and Paradigm desire to
exchange mutual general releases in order to restore the parties to their
respective positions immediately prior to the execution and delivery of
the Purchase Agreement. In connection with the transaction contemplated by
this Agreement, the Company and Paradigm shall each bear responsibility
for their respective costs associated with this Agreement at closing.
ITEM 5. OTHER ITEMS
APRIL 9, 2003 - - We executed a Restructuring and Release Agreement. The
complete agreement is attached as exhibits to this Form 8-K.
EXHIBIT 10.2 - RESTRUCTURING & RELEASE AGREEMENT - The facts are that the
Company is in need of capital and management restructuring in order to
progress as a public company. Therefore, the Restructuring & Release
Agreement was executed to accommodate such need. Pursuant to the
Restructuring & Release Agreement, Greg Mardock shall resign as a director
and employee of the Company and new directors to be appointed are Michael
A, Novielli, Douglas H. Leighton and Theodore J. Smith, Jr. As of this
filing date Greg Mardock has resigned and the new directors have accepted
their positions. Listed below are additional Obligations of the Parties to
the Agreement.
Obligations of Released Parties
1.1 Forgiveness of Notes. Western Cottonwood Corporation agrees to
forgive $1,984,849.99 in Notes receivable and interest receivable as
of December 31, 2002 and any interest to the date of this Agreement
from Flexxtech. The Notes shall be forgiven on the Start Date.
1.2 Resignation of Greg Mardock. Greg Mardock shall resign from the
Flexxtech board of directors ("Board") and as an officer and
employee of Flexxtech effective immediately upon the filing of
Flexxtech's 2002, Form 10K report with the SEC.
1.3 Immediate release of any and all claims to collateral, security or
title of any Flexxtech assets.
1.4 Full cooperation and assistance. Released parties full cooperation
and assistance regarding ongoing matters involving Flexxtech's
accounting, legal or other corporate issues is critical to the
future success of Flexxtech. Released parties agree that they shall
comply on a reasonable and timely basis with all requests by the
Restructuring and Releasing Parties for related information.
1.5 Greg Mardock shall cause the Board to appoint Michael A. Novielli,
Douglas H. Leighton and Theodore J. Smith, Jr. effective immediately
following the execution of this Restructuring and Release Agreement
1.6 Greg Mardock shall immediately execute and cause the Board to accept
the Bridge Financing Offer, Agreements and Documents between
Flexxtech Corporation and Dutchess Private Equities Fund, LP.,
immediately following the execution of this Restructuring and
Release Agreement.
1.7 Greg Mardock shall immediately execute and cause the Board to accept
the Consulting Agreement between Flexxtech Corporation and Dutchess
Advisors, Ltd., immediately upon the execution of this Restructuring
and Release Agreement. Pursuant to the Consulting Agreement
Flexxtech shall issue Seven Hundred Thousand (700,000) shares of
common stock of the Company to Dutchess Advisors, Ltd., and Four
Hundred Thousand (400,000) to Dutchess Private Equities Fund, LP
bringing the total outstanding shares to 1,603,407.
2. Obligations of Restructuring and Releasing Parties
2.1 Western Cottonwood and Atlantis Partners shall maintain a combined
ownership percentage of 4.9%. The percentage ownership of 4.9% shall
be non-dilutive through Flexxtech's first merger or acquisition
transaction ("Initial Transaction") with a going concern following
this Agreement and non-dilutive to the total outstanding shares at
the completion of the Initial Transaction, at
2
which point such non-dilution rights shall be terminated. For
example: In an acquisition or merger transaction, Flexxtech issues
Ten (10) million shares of Stock in exchange of the going concern's
shares, then Western Cottonwood would be issued additional shares of
Stock of four hundred ninety thousand (490,000). This formula shall
be used in a fully dilutive basis whether any transaction contains
Preferred Stock, Convertible debentures or other types of
securities, as if fully converted on the closing date of the Initial
Transaction. At the closing date the Initial Transaction, Western
Cottonwood would be issued stock within 30 days of the closing
representing an amount which would cause Western Cottonwood to own a
total of 4.9% of the total non-dilutive outstanding stock of
Flexxtech.
2.2 Greg Mardock shall maintain an ownership percentage of 2.0%. His
ownership percentage of 2.0% shall be non-dilutive through
Flexxtech's first merger or acquisition transaction ("Initial
Transaction") with a going concern following this Agreement and
non-dilutive to the total outstanding shares at the completion of
the Initial Transaction with a going concern following this
Agreement and non-dilutive to the total outstanding shares at the
completion of the Initial Transaction at which point such
non-dilution rights shall be terminated. (For example: In an
acquisition or merger transaction, Flexxtech issues Ten (10) million
shares in exchange of the going concerns shares, then Greg Mardock
would be issued additional shares of Stock of 200,000.) This formula
shall be used in a fully dilutive basis whether a transaction
contains Preferred Stock, Convertible debentures or other types of
securities, as if fully converted on the closing date of the Initial
Transaction. At the closing date of the Initial Transaction, Greg
Mardock would be issued stock within 30 days of the closing
representing an amount which would cause Greg Mardock to own a total
of 2% of the total non-dilutive outstanding stock of Flexxtech.
2.3 Restrictions on Stock. All Stock issued to Released Parties shall be
restricted, issued pursuant to Rule 144 and shall have no
registration rights. Released parties also agree that in addition to
the rules governing resale pursuant to Rule 144, shares of Flexxtech
Stock which have been issued to or will be issued to Released
Parties may not be sold either in the public market nor in a private
transaction for a period of one year following the Start Date. The
Released parties also agree that they may not sell more than one
twelfth (1/12) of their entire ownership stake in any one month for
a period covering the thirteenth month through the twenty fourth
month following the Start Date ("Restricted Period"). The Stock is
not transferable and may not be hypothecated or loaned at any time
and under any circumstances, during the period beginning with the
Start Date and ending at the conclusion of the Restricted Period
2.4 Subject to the terms of this Agreement the Restructuring and
Releasing Parties hereby releases, relinquishes and forever
discharges the Released Parties, their predecessors, successors,
assigns, agents, employees, attorneys and representatives, family
members of and from any and all claims, demands, actions, and causes
of action of any and every kind or character, whether known or
unknown, which the Restructuring and Releasing Parties or any other
party may have against the Released Parties and their predecessors,
successors, assigns, agents, employees, attorneys and
representatives arising out of or with respect to any and all
transactions relating to Flexxtech and any and all transactions
relating to the Restructuring and Releasing Parties, any and all
agreements, the Securities of Flexxtech and any instrument signed in
connection with any transaction among the parties not specifically
excluded from this release by written agreement, including but not
limited to any loss or expense and/or detriment of any kind or
character growing out of or in any way connected with or in any way
resulting from the acts or omissions of the Released Parties and
their predecessors, successors, assigns, agents, employees,
attorneys and representatives and including, but not limited to, any
loss, cost or damage in connection with any usury, breach of
fiduciary duty, breach of any duty of fair dealing, breach of
confidence, breach of funding commitment, undue influence, duress,
economic coercion, conflict of interest, negligence, bad faith,
malpractice, violation of the RICO Act, the intentional or negligent
infliction of mental duress, tortuous interference with contractual
relations, tortuous interference with corporate governance or
prospective business advantage, breach of contract, deceptive trade
practices, libel, slander or conspiracy. Flexxtech agrees to keep
indemnified the Released Parties from all claims, actions,
proceedings, investigations, demands, judgments, and awards
(together "Claims" which may be instituted, made, threatened, or
alleged against or which otherwise involve the Released Parties and
against all losses, liabilities, damages, costs, charges and
expenses (together "Losses") which may be suffered or incurred by
the Released Parties
3
in connection with or arising out of the Released Parties
involvement with Flexxtech and its subsidiaries.
APRIL 8, 2003 a Consulting Agreement was entered into between the Company and
Dutchess Advisors LLC, whereas Dutchess would provide the following services:
(i) Assist the Company with its capitalization and restructuring.
(ii) Assist the Company with its business development by seeking
potential business partners, candidates for joint ventures, mergers
and acquisitions or qualified persons to join the Company's board of
directors.
The Agreement calls for Dutchess receiving Seven Hundred Thousand
(700,000) shares of common stock for its services which would result in
Dutchess owning in excess of 50% of the total outstanding stock of the
Company on April 8, 2003. The full agreement is attached as EXHIBIT 10.3.
Additional agreements pertaining to financing attached to this form are
summarized below.
EXHIBIT 10.4 - INVESTMENT AGREEMENT - Between Dutchess Capital Management
LLC. and Flexxtech Corporation whereas the parties desire that, upon the
terms and subject to the conditions contained herein, the Investor shall
invest up to $5,000,000 to purchase the Company's common stock.
EXHIBIT 10.5 - REGISTRATION RIGHTS AGREEMENT - Between Flexxtech
Corporation and Dutchess Capital Management LLC. The Company has agreed to
issue and sell to Dutchess (i) an indeterminate number of shares of the
Company's common stock, .001 par value per share (the "Common Stock"), to
be purchased pursuant to the terms and subject to the conditions set forth
in the Investment Agreement (see Exhibit C).
EXHIBIT 10.6 - SUBSCRIPTION AGREEMENT - This offering consists of up to
$100,000 of the Company's Convertible Debentures convertible into the
Company's Common Stock
EXHIBIT 10.7 - FORM OF DEBENTURE - Flexxtech Corporation promises to pay
DUTCHESS PRIVATE EQUITIES FUND, L.P. on April 7, 2008, the principal
amount of Forty Thousand Dollars ($40,000) U.S., and to pay interest on
the principal amount hereof, in such amounts, at such times and on such
terms and conditions as are specified.
EXHIBIT 10.8 - REGISTRATION RIGHTS - WHEREAS, upon the terms and subject
to the conditions of the Subscription Agreement between the Investor and
the Company (the "Subscription Agreement"), the Company has agreed to
issue and sell to the Investor convertible debentures of the Company,
which will be convertible into shares of the common stock, $.001 par value
per share (the "Common Stock"), of the Company.
ITEM 7. EXHIBITS
EXHIBITS
EXHIBIT 10.1 - PARADIGM RESCISSION AGREEMENT
EXHIBIT 10.2 - RESTRUCTURING & RELEASE AGREEMENT
EXHIBIT 10.3 - DUTCHESS CONSULTING AGREEMENT
EXHIBIT 10.4 - INVESTMENT AGREEMENT
EXHIBIT 10.5 - REGISTRATION RIGHTS AGREEMENT
EXHIBIT 10.6 - SUBSCRIPTION AGREEMENT
EXHIBIT 10.7 - FORM OF DEBENTURE
EXHIBIT 10.8 - REGISTRATION RIGHTS AGREEMENT
EXHIBIT 10.9 - FUNDS DISBURSEMENT AUTHORIZATION
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
By /s/ Michael A. Novielli
-----------------------------
Michael A. Novielli,
Chairman and President
Date: April 21, 2003
5