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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): JANUARY 16, 2007
THINKENGINE NETWORKS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-8496 20-8058881
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
100 NICKERSON ROAD, MARLBOROUGH, MASSACHUSETTS 01752
(Address of principal executive offices, including zip code)
(508) 624-7600
(Registrant's telephone number, including area code)
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))
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ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On January 16, 2007, ThinkEngine Networks, Inc. ("ThinkEngine" or the "Company")
entered into a Loan and Security Agreement (the "Loan Agreement") with VenCore
Solutions LLC (the "Lender"). Pursuant to the Loan Agreement, the Lender loaned
the Company the sum of $1.5 million. The loan bears interest at the rate of 13%
per annum, matures on February 10, 2010 and requires an additional $150,000
payment to the Lender on the maturity date. The loan is to be repaid in six
interest-only monthly installments of $16,250 followed by thirty monthly
installments of principal and interest in the amount of $58,832. The Loan
Agreement contains certain customary non-financial covenants but does not
contain any financial covenants. Pursuant to the Loan Agreement, the Company
pledged as collateral to the Lender substantially all its non-intellectual
property business assets and entered into a Negative Pledge Agreement with
respect to its intellectual property assets (the "Negative Pledge Agreement").
The foregoing description of the Loan Agreement and the Negative Pledge
Agreement does not purport to be complete and is qualified in its entirety by
reference to the Loan Agreement and the Negative Pledge Agreement, copies of
which are attached as Exhibits 10.1 and 10.2 hereto and incorporated by
reference herein.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES
On January 16, 2007, in connection with the Loan Agreement between the Company
and the Lender, as described in Item 2.03 above, the Company issued a ten-year
Common Stock Purchase Warrant (the "Warrant") to the Lender to purchase 35,000
shares of the Company's common stock at an exercise price of $3.47 per share.
The Warrant contains a cashless exercise provision. The issuance of shares upon
exercise of the Warrant is subject to approval of an additional listing
application to be submitted to the American Stock Exchange.
The Warrant was issued pursuant to the private placement exemption set forth in
Section 4(2) of the Securities Act of 1933, as amended.
The foregoing description of the Warrant does not purport to be complete and is
qualified in its entirety by reference to the Warrant, a copy of which is filed
as Exhibit 10.3 hereto and incorporated herein by reference.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
EXHIBIT DESCRIPTION
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10.1 Loan and Security Agreement dated as of January 16, 2007,
between ThinkEngine Networks, Inc. and VenCore Solutions LLC
10.2 Negative Pledge Agreement dated January 16, 2007 by ThinkEngine
Networks, Inc.
10.3 Common Stock Purchase Warrant dated January 16, 2007 issued to
VenCore Solutions LLC
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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.
THINKENGINE NETWORKS, INC.
Date: January 22, 2007 By: /s/ John Steinkrauss
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John Steinkrauss
Vice President and Chief Financial Officer
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