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TRLI > SEC Filings for TRLI > Form 8-K on 16-Sep-2013All Recent SEC Filings

Show all filings for TRULI MEDIA GROUP, INC.

Form 8-K for TRULI MEDIA GROUP, INC.


16-Sep-2013

Unregistered Sale of Equity Securities, Financial Statements and Exhibits


Item 3.02 Unregistered Sales of Equity Securities

On September 10, 2013 (the "Effective Date"), Truli Media Group, Inc. (the "Company") entered into securities purchase agreements (collectively, the "Agreement") with accredited investors (collectively, the "Investors") pursuant to which the Investors purchased 12% Senior Convertible Debentures for aggregate gross proceeds of $501,337, which consisted of $400,000 of cash and the exchange and cancellation of an 8% convertible debenture (bearing principal and interest totaling $101,337 (collectively, the "Debentures"). The Debentures bears interest at a rate of 12% per annum and their principal amounts are due on September 10, 2014. The Debentures are payable upon any principal being converted on any voluntary conversion date (as to that principal amount then being converted). The Company may pay interest due either in cash or, at its option, through an increase in the principal amount of the Debentures then outstanding by an amount equal to the interest then due and payable. The Debenture will be convertible at the option of the Investor at any time into shares of the Company's common stock, par value $0.001 per share (the "Common Stock") at a conversion price equal to (i) $0.02, on any conversion date through the date that is one hundred eighty (180) days from the Effective Date, subject to adjustment (the "Initial Conversion Price") and (ii) beginning one hundred eighty one (181) days after the Effective Date, it shall be equal to the lower of (A) the Initial Conversion Price or (B) 65% of the average of the lowest three closing bid prices of the Common Stock for the ten trading days immediately prior to a conversion date, subject to adjustment.

In connection with the Agreement, the Investors collectively received warrants to purchase up to an aggregate of twenty-five million sixty-six thousand eight hundred fifty (25,066,850) shares of Common Stock (collectively, the "Warrants"). The Warrants are exercisable for a period of three years from the date of issuance at exercise price of $0.05, subject to adjustment. The Investor may exercise the Warrant on a cashless basis at any time after the date of issuance. In the event the Investor exercises the Warrant on a cashless basis we will not receive any proceeds.

The conversion price of the Debenture and the exercise price of the Warrant are subject to full ratchet anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.

At any time while the Debenture is outstanding, the Company may, upon written notice, redeem the Debenture in cash at 120% of the then outstanding principal amount of the Debenture, plus accrued plus unpaid interest and all liquidated damages and other amounts due in respect of the Debenture (the "Redemption Amount"), provided certain conditions are met. If at any time after the Effective Date the Company shall consummate a Subsequent Financing (as defined in the Agreement) which results in the receipt by the Company of aggregate gross proceeds of up to $3,000,000, the Company shall pay the Investors an amount equal to 25% of the Redemption Amount. In the event any Subsequent Financing provides the Company with gross proceeds in excess of $3,000,000, the Debentures shall be paid in full at the Redemption Amount.

The Agreement provides that until the date that less than twenty percent (20%) of the Debenture is outstanding, in the event of a Subsequent Financing (except for certain exempt issuances as provided in the Agreement) by the Company, Investor will have the right to participate in such Subsequent Financing up to an amount equal to the Investor's proportionate share of the Subsequent Financing based on such Investor's participation in this offering on the same terms, conditions and price provided for in the Subsequent Financing.

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For a period of three (3) years from the date of the Agreement, if at any time the Company shall determine to file with the Securities and Exchange Commission (the "Commission") a registration statement relating to an offering for its own account or the account of others under the Securities Act of 1933, as amended (the "Securities Act"), of any of its equity securities (other than on Form S-4, Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other bona fide, employee benefit plans), upon the Investor's request in writing, the Company shall use its best efforts to include in such registration statement all of the shares of Common Stock issuable upon conversion of the Debentures and exercise of the Warrants and Placement Agent Warrants (collectively "Registrable Securities"); provided, however, that, the Company shall not be required to register any Registrable Securities that are the subject of a then effective registration statement; provided, further, however, (i) if the registration statement is an offering to be made on a continuous basis pursuant to Rule 415 promulgated under the Securities Act and is not on a Form S-3, and the Commission advises the Company that all of the Registrable Securities which Investor has requested to be registered may not be included under Rule 415, then the number of Registrable Securities to be registered shall be reduced as set forth in the Agreement; and
(ii) if the registration so proposed by the Company involves an underwritten offering of the securities and the managing underwriter of such underwritten offering shall advise the Company in writing that the distribution of all or a specified portion of the Registrable Securities which the Investor has requested the Company to register will materially and adversely affect the distribution of such securities by such underwriters, then the Company may reduce or eliminate the number of Registrable Securities that are included in a registration statement.

The Investors have contractually agreed to restrict its ability to exercise the Warrants and convert the Debentures such that the number of shares of the Company Common Stock held by the Investors and its affiliates after such conversion and/or exercise does not exceed 4.99% of the Company's then issued and outstanding shares of Common Stock.

The Debentures contains certain customary negative covenants and events of default, including, but not limited to, the Company's failure to pay principal and interest, material defaults under the other transaction documents, bankruptcy, and the Company's failure to deliver Common Stock certificates after a conversion date. The Company's obligations under the Debentures are guaranteed by Truli Media Group, LLC, the Company's wholly-owned subsidiary.

In conjunction with the Agreement, all officers, directors and 2% holders of the Company's Common Stock have entered into lock-up agreements pursuant to which they have agreed to not sell their shares of common stock or common stock equivalents in the Company until the earlier of (1) the one (1) year anniversary of the Effective Date or (2) such time as not less than 80% of principal amount of the Debentures shall have been repaid or converted into Common Stock.

As of the date hereof, the Company is obligated on $501,337 face amount of the Debentures issued to the Investors. The Debentures are debt obligations arising other than in the ordinary course of business which constitute a direct financial obligation of the Company.

Legend Securities, Inc., a FINRA-registered broker-dealer, was engaged as placement agent in connection with the private placement. The Company paid the placement agent a cash fee in the amount of $60,160.44 (representing a 9% sales commission and 3% non-accountable expense allowance) and will issue the placement agent warrants to purchase two million five hundred six thousand six hundred eighty-five (2,506,685) shares of Common Stock (representing 10% of the Warrants issued to the Investors) on the same terms and conditions as the Warrants issued to the Investors. The placement agent may exercise the placement agent warrants on a cashless basis at any time after the date of issuance. In the event the placement agent exercises the placement agent warrants on a cashless basis we will not receive any proceeds.

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The securities sold in the private placement were not registered under the Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(2) under the Securities Act and Regulation D promulgated thereunder and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. Each Investor is an "accredited investor" as such term is defined in Regulation D promulgated under the Securities Act. This current report shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.

The foregoing information is a summary of the agreements involved in the transaction described above, is not complete, and is qualified in its entirety by reference to the full text of such agreements, copies of which are attached as exhibits to this Current Report on Form 8-K. Readers should review such agreements for a complete understanding of the terms and conditions associated with this transaction.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed with this report:

Exhibit
No.       Description of Exhibit
4.1       Form of Debenture, dated September 10, 2013

4.2       Form of Warrant, dated September 10, 2013

99.1      Securities Purchase Agreement, dated September 10, 2013, by and between
          Truli Media Group, Inc. and the Purchasers signatory thereto

99.2      Subsidiary Guarantee, dated September 10, 2013, by Truli Media Group, LLC

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