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, 2005
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ICEWEB, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-27865 13-2640971
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(Commission File Number) (IRS Employer Identification No.)
205 Van Buren Street, Herndon, VA 20170
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(Address of Principal Executive Offices) (Zip Code)
(703) 964-8000
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(Registrant's Telephone Number, Including Area Code)
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(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):
[_] 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 133-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
On March 30, 2005, the Company entered into a Preferred Stock Purchase
Agreement and related agreements with Barron Partners LP. Pursuant to the
Agreement, the Company issued 1,666,667 shares of its newly created Series A
Convertible Preferred Stock and received gross proceeds of $1,000,000. The
Company received net proceeds of $900,000 after payment of expenses of $35,000
and a finder's fee to Liberty Company LLC of $65,000. In connection with the
preferred stock issuance, the Company also issued it's A Common Stock Purchase
Warrant to purchase 160,000,000 shares of common stock exercisable at $0.025 per
share, its B Common Stock Purchase Warrant to purchase 100,000,000 shares of
common stock exercisable at $0.06 per share and its C Common Stock Purchase
Warrant to purchase 100,000,000 shares of common stock exercisable at $0.12 per
share. All of the warrants expire on March 30, 2010.
The Agreement requires the Company to appoint or elect four additional
directors, of whom three directors are required to be independent. The Company's
audit and compensation committees will be comprised solely of independent
directors. In addition, the Agreement requires John R. Signorello and James
Bond, officers of the Company, to exchange indebtedness in the principal amount
of $325,000 into an aggregate of 43,333,360 shares of common stock of the
Company. IceWeb has also covenanted for a period of three years not to issue any
preferred stock, convertible debt or other equity instruments containing reset
features. In addition, while the securities issued in the transaction are
outstanding, the Company is prohibited from entering into any financing
involving a variable rate feature. The Agreement also provides certain
restrictions as to the incurrence of debt borrowings. Barron Partners also
received the right of first refusal to participate in any funding transaction by
the Company on a pro rata basis at 94% of the offering price or funding amount
received in the transaction.
The terms of the Series A Preferred Stock contain no provision for
dividends or for voting rights except as required by the Delaware General
Corporation Law. Without the approval of the Series A Preferred stockholders,
the Company may not create another series of preferred stock superior to or pari
passu with the Series A Preferred Stock, nor increase the number of authorized
shares of Series A Preferred Stock. Upon liquidation, each share of Series A
Preferred Stock will be entitled to receive an amount equal to $0.0075 per
share. The Series A Preferred Stock is convertible into common stock of the
Company at a conversion price of $0.0075 per share.
The conversion price of the Series A Preferred Stock is subject to
adjustment in the event of specified transactions, but precludes the Company
from issuing any equity securities at a price less than the conversion price of
the Series A Preferred Stock except for securities issuances pursuant to Company
option plans, acquisitions or strategic transactions. The exercise price of the
common stock purchase warrants are also subject to adjustments in the event of
certain corporate transactions or the issuance of common stock or derivative
securities at less than $0.12 per share. Both the Series A Preferred Stock and
the common stock purchase warrants preclude the holder from converting or
exercising the securities if as a result of such issuance, the holder would
receive common shares, together with its other shares of common stock, in excess
of 4.99% of the outstanding common shares of the Company.
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The Company is authorized to use the proceeds of the transaction for
working capital purposes and acquisitions.
Under the terms of the Registration Rights Agreement entered into by
the parties, the Company has agreed to file a registration statement within 30
days of the closing for the common shares underlying the securities and to cause
the registration statement to be declared effective by the SEC within 120 days
of the closing date of the transaction. If the Company does not obtain
effectiveness of its registration statement within that time, IceWeb will be
required to pay as damages an amount equal to 36% per annum, or approximately
0.099% per diem.
The issuance of the securities were effected pursuant to the exemption
from registration contained in Section 4(2) of the Securities Act of 1933.
All references to common shares issuable on conversion of the Series A
Preferred Stock and the warrants are prior to the Company's proposed reverse
stock split of 1:80 shares expected to take place by the end of April 2005.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
YEAR
The Company filed with the State of Delaware on April 1, 2005 an
amendment to its Certificate of Incorporation pertaining to the Certificate of
Designation for the Series A Convertible Preferred Stock. A description of the
Series A Preferred Stock was disclosed in response to Item 1.01 above.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Preferred Stock Purchase Agreement with Barron Partners LP
dated March 30, 2005
99.2 Certificate of Designations of Preferences, Rights and
Limitations of Series A Convertible Preferred Stock
99.3 A, B and C Common Stock Purchase Warrants
99.4 Registration Rights Agreement with Barron partners LP
99.5 Escrow Agreement
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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.
ICEWEB, INC.
By: /s/ John R. Signorello
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John R. Signorello
Chairman and CEO
DATED: April 05, 2005
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