Form 8-K (PIPE-Debentures)
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 1934
Date
of
Report: February 28, 2006
PacificNet
Inc.
(Exact
name of registrant as specified in charter)
Delaware
(State
or
other jurisdiction of incorporation)
|
000-24985
|
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92-2118007
|
|
(Commission
File Number)
|
|
(IRS
Employer Identification No.)
|
601
New Bright Building, 11 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong
Kong
(Address
of principal executive offices) (Zip
Code)
Registrant’s
telephone number, including area code: 011-852-2876-2900
Item
1.01 Entry into a Material Definitive
Agreement
On
February 28, 2006, the Registrant entered into a securities purchase agreement
with several institutional investors, including Whalehaven Capital Fund Limited,
DKR Soundshore Oasis Holding Fund Ltd., Basso Fund Ltd., Basso Multi-Strategy
Holding Fund Ltd., Basso Private Opportunities Holding Fund Ltd., Iroquois
Master Fund Ltd., C.E. Unterberg, Towbin Capital Partners I, LP and Alpha
Capital AG, for the sale of up to $8,000,000 principal amount variable rate
debentures (the “Debentures”) at an initial fixed conversion price of $10.00,
and the issuance of warrants to purchase up to 400,000 shares of the
Registrant’s common stock exercisable for a period of 5 years at $12.20 per
share (the “Warrants”), subject to customary anti-dilution provisions. C.E.
Unterberg, Towbin advised the Registrant and acted as lead placement agent.
Pursuant
to the terms of the Debentures, commencing on January 1, 2007 on a monthly
basis
the Registrant shall redeem, at its election in cash or shares, an amount equal
to $320,000 of the Debenture, plus any accrued, but unpaid interest and other
amounts then owing in respect of the Debentures. The Registrant may elect to
redeem some or all of the outstanding Debentures at any time after the 12 month
anniversary of the effective date of the registration statement covering the
resale of the shares underlying the Debentures and the Warrants (the “Effective
Date”). Further, any time after the six month anniversary of the Effective Date
of the Registrant also has the right to force conversion of the Debentures
provided that certain market conditions have been met.
The
Registrant has agreed to file a registration statement covering the resale
of
the shares underlying the Debentures and the Warrants under the Securities
Act
of 1933, as amended, on the earlier of (i) April 30, 2006, or (ii) the
30th
calendar
day following the date the Registrant files its Form 10-KSB with the Securities
and Exchange Commission.
The
Debentures and Warrants were sold in a transaction not involving a public
offering and were issued without registration in reliance upon the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933, as
amended and Regulation D promulgated thereunder.
Reference
is made to the full text of the Securities Purchase Agreement, Form of Debenture
and Form of Warrant and related press release filed as exhibits hereto, which
are incorporated by reference herein.
Item
9.01 Financial Statements and
Exhibits
|
(d)
|
Exhibits
|
|
4.5
|
Securities
Purchase Agreement, dated February 28, 2006, among PacificNet Inc.
and the
Purchasers defined therein
|
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4.6
|
Form
of Variable Rate Convertible Debenture due March 2009
|
|
4.7
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Form
of Common Stock Purchase Warrant
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20.1
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Press
Release, dated February 28,
2006
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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.
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PACIFICNET
INC. |
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|
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| Dated:
March
6, 2006 |
By: |
/s/ Victor
Tong
|
| |
Name: Victor Tong |
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Title:
President |