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 23, 2004
CYBERLUX CORPORATION
--------------------
(Exact name of registrant as specified in its charter)
Nevada 000-33415 91-2048178
--------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4625 Creekstone Drive, Suite 100, Research Triangle Park, Durham, NC 27703
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code (646) 352-0260
Copies to:
Gregory Sichenzia, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
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):
[_] 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 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On September 23, 2004, we entered into a Securities Purchase Agreement
with AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New
Millennium Capital Partners II, LLC for the sale of (i) $1,500,000 in secured
convertible notes and (ii) warrants to purchase 2,250,000 shares of our common
stock.
The investors are obligated to provide us with the funds as follows:
o $500,000 was disbursed on September 23, 2004;
o $500,000 will be disbursed within five days of filing a registration
statement covering the number of shares of common stock underlying
the secured convertible notes and the warrants; and
o $500,000 will be disbursed within five days of the effectiveness of
the registration statement.
The secured convertible notes bear interest at 10%, mature two years from
the date of issuance, and are convertible into our common stock, at the
investors' option, at the lower of:
o $0.72; or
o 50% of the average of the three lowest intraday trading prices for
the common stock on the Over-The-Counter Bulletin Board for the 20
trading days before but not including the conversion date.
The full principal amount of the secured convertible notes are due upon a
default under the terms of secured convertible notes. In addition, we granted
the investors a security interest in substantially all of our assets, including
the assets of our wholly owned subsidiaries, and intellectual property. We are
required to file a registration statement with the Securities and Exchange
Commission within 45 days of closing, which will include the common stock
underlying the secured convertible notes and the warrants. If the registration
statement is not declared effective within 90 days from the date of closing, we
are required to pay liquidated damages to the investors. In the event that we
breach any representation or warranty in the Securities Purchase Agreement, we
are required to pay liquidated damages in shares or cash, at the election of the
investors, in an amount equal to three percent of the outstanding principal
amount of the secured convertible notes per month plus accrued and unpaid
interest.
The warrants are exercisable until five years from the date of issuance at
a purchase price of $0.50 per share. The investors may exercise the warrants on
a cashless basis if the shares of common stock underlying the warrants are not
then registered pursuant to an effective registration statement. In the event
the investors exercise the warrants on a cashless basis, then we will not
receive any proceeds. In addition, the exercise price of the warrants will be
adjusted in the event we issue common stock at a price below market, with the
exception of any securities issued as of the date of the warrants or issued in
connection with the secured convertible notes issued pursuant to the Securities
Purchase Agreement.
Upon an issuance of shares of common stock below the market price, the
exercise price of the warrants will be reduced accordingly. The market price is
determined by averaging the last reported sale prices for our shares of common
stock for the five trading days immediately preceding such issuance as set forth
on our principal trading market. The exercise price shall be determined by
multiplying the exercise price in effect immediately prior to the dilutive
issuance by a fraction. The numerator of the fraction is equal to the sum of the
number of shares outstanding immediately prior to the offering plus the quotient
of the amount of consideration received by us in connection with the issuance
divided by the market price in effect immediately prior to the issuance. The
denominator of such issuance shall be equal to the number of shares outstanding
after the dilutive issuance.
The conversion price of the secured convertible notes and the exercise
price of the warrants may be adjusted in certain circumstances such as if we pay
a stock dividend, subdivide or combine outstanding shares of common stock into a
greater or lesser number of shares, or take such other actions as would
otherwise result in dilution of the selling stockholder's position.
The investors have agreed to restrict their ability to convert their
secured convertible notes or exercise their warrants and receive shares of our
common stock such that the number of shares of common stock held by them in the
aggregate and their affiliates after such conversion or exercise does not exceed
4.9% of the then issued and outstanding shares of common stock.
Under a Guaranty and Pledge Agreement, Mr. Donald F. Evans, our Chief
Executive Officer, agreed (i) to unconditionally guarantee the timely and full
satisfaction of all obligations, whether matured or unmatured, now or hereafter
existing or created and becoming due and payable to AJW Offshore, Ltd., AJW
Qualified Partners, LLC, AJW Partners, LLC and New Millennium Capital Partners
II, LLC, their successors, endorsees, transferees or assigns under the
Securities Purchase Agreement and other transaction documents to the extent of
1,255,000 shares of our common stock owned by Mr. Evans, and (ii) to grant to
AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New
Millennium Capital Partners II, LLC, their successors, endorsees, transferees or
assigns a security interest in the 1,255,000 shares, as collateral security for
such obligations.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION.
See Item 1.01 above.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
See Item 1.01 above.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable.
(B) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(C) EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
--------------------------------------------------------------------------------
4.1 Securities Purchase Agreement, dated September 23, 2004, by and
among Cyberlux Corporation and AJW Offshore, Ltd., AJW Qualified
Partners, LLC, AJW Partners, LLC and New Millennium Capital
Partners II, LLC.
4.2 Callable Secured Convertible Note issued to AJW Offshore, Ltd.,
dated September 23, 2004.
4.3 Callable Secured Convertible Note issued to AJW Qualified
Partners, LLC, dated September 23, 2004.
4.4 Callable Secured Convertible Note issued to AJW Partners, LLC,
dated September 23, 2004.
4.5 Callable Secured Convertible Note issued to New Millennium
Capital Partners II, LLC, dated September 23, 2004.
4.6 Stock Purchase Warrant issued to to AJW Offshore, Ltd., dated
September 23, 2004.
4.7 Stock Purchase Warrant issued to AJW Qualified Partners, LLC,
dated September 23, 2004.
4.8 Stock Purchase Warrant issued to AJW Partners, LLC, dated
September 23, 2004.
4.9 Stock Purchase Warrant issued to New Millennium Capital Partners
II, LLC, dated September 23, 2004.
4.10 Registration Rights Agreement, dated as of September 23, 2004, by
and among Cyberlux Corporation, AJW Offshore, Ltd., AJW Qualified
Partners, LLC, AJW Partners, LLC and New Millennium Capital
Partners II, LLC.
4.11 Security Agreement, dated as of September 23, 2004, by and among
Cyberlux Corporation, AJW Offshore, Ltd., AJW Qualified Partners,
LLC, AJW Partners, LLC and New Millennium Capital Partners II,
LLC.
4.12 Intellectual Property Security Agreement, dated September 23,
2004, by and among Cyberlux Corporation, AJW Offshore, Ltd., AJW
Qualified Partners, LLC, AJW Partners, LLC and New Millennium
Capital Partners II, LLC.
4.13 Guaranty and Pledge Agreement, dated September 23, 2004, by and
among Cyberlux Corporation, Donald F. Evans, AJW Offshore, Ltd.,
AJW Qualified Partners, LLC, AJW Partners, LLC and New Millennium
Capital Partners II, LLC.
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.
CYBERLUX CORPORATION
Date: September 29, 2004 /s/ DONALD F. EVANS
-----------------------------------
Donald F. Evans
Chief Executive Officer