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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):
June 28, 2004 (June 24, 2004)
IMPROVENET, INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-29927 77-0452868
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(State or other Jurisdiction (Commission (IRS Employer
of Incorporation File No.) Identification No.)
10799 N. 90th Street, Suite 200
Scottsdale, Arizona 85260
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(Address of Registrant's Principal Executive Offices) (Zip Code)
(480) 346-0000
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(Registrant's telephone number, including area code)
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Items in Form 8-K
Page
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Facing Page ................................................................ 1
Item 5. Other Events ...................................................... 3
Item 7. Financial Statements and Exhibits ................................. 3
Signatures ................................................................. 4
Exhibit Index .............................................................. 5
2
Item 5. Other Events and Regulation FD Disclosure.
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On June 24, 2004, the Company completed a sale of 10,500,000 shares of
its common stock, par value $0.001 per share, for $0.10 per share to several
accredited investors (collectively, the "Investors"), for an aggregate purchase
price of $1,050,000 in a private placement transaction pursuant to provisions of
a Common Stock Subscription Agreement dated June 23, 2004 (the "Agreement"). The
Company also granted the Investors warrants to purchase a total of 8,000,000
shares of the Company's common stock at an exercise price of $0.15 per share.
The right to designate a nominee to the Company's Board of Director's was also
granted to one of the accredited investors. The funds received will be used for
general corporate purposes and to increase the Company's financial flexibility.
As part of the transaction, the Investors also purchased 1,500,000
shares of common stock from affiliates of three of the officers and directors of
the Company for an aggregate purchase price of $150,000. Each of these three
selling parties entered into a lock-up agreement restricting future sales of
their common stock for a specified period as well as a voting agreement
regarding the accredited investor's designated nominee to the Company's Board of
Directors.
In addition, the principal balance and all accrued interest on $370,000
of the $400,000 outstanding convertible promissory notes issued to accredited
investors by the Company in December 2003 were converted into common stock and
warrants on similar terms to the private placement (the "Converting Investors")
as more specifically set forth in each respective Second Amendment to
ImproveNet, Inc. Unsecured Convertible Promissory Note Subscription Agreement
and 8% Unsecured Convertible Promissory Note (the "Second Amendments"). The
remaining $30,000 of convertible promissory notes are being paid in full by the
Company in lieu of conversion.
ImproveNet has agreed to file a registration statement with the
Securities and Exchange Commission within sixty days of the closing of the
Agreement covering the resale of the common stock by the Investors and the
Converting Investors.
This summary description of the transactions contemplated by the
Agreement does not purport to be complete and is qualified in its entirety by
reference to the Agreement, the Voting Agreement and the Second Amendments filed
as exhibits hereto.
On June 25, 2004, the Company issued a press release announcing the
private placement and related transactions. A copy of such press release is
filed as an exhibit and is incorporated by reference hereto in its entirety.
Item 7. Financial Statements, ProForma Financial Information and Exhibits.
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(c) Exhibits.
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Exhibit No. Description
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10.1* Subscription Agreement dated June 23, 2004 among ImproveNet, Inc. and
the Affiliate Shareholders and the Subscribers named therein
10.2* Voting Agreement dated June 23, 2004 among ImproveNet, Inc. and the
Purchaser and Shareholders named therein
10.3* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and Joel A.
Stead Trust, dated February 7, 2002
10.4* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and Elthem B.
Kabir
10.5* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and Hexon
Technology PTE LTD
10.6* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and Mark Ploen
10.7* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and JMJS
Group, LLLP
10.8* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and James R.
Perry
99.1* Press Release dated June 25, 2004
*Filed herewith
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.
IMPROVENET, INC.
By: /s/ Jeffrey I. Rassas
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Dated: June 28, 2004 Jeffrey I. Rassas, CEO
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EXHIBIT INDEX
Exhibit No. Description
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10.1* Subscription Agreement dated June 23, 2004 among ImproveNet, Inc. and
the Affiliate Shareholders and the Subscribers named therein
10.2* Voting Agreement dated June 23, 2004 among ImproveNet, Inc. and the
Purchaser and Shareholders named therein
10.3* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and Joel A.
Stead Trust, dated February 7, 2002
10.4* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and Elthem B.
Kabir
10.5* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and Hexon
Technology PTE LTD
10.6* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and Mark Ploen
10.7* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and JMJS
Group, LLLP
10.8* Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory
Note dated June 23, 2004 by and between ImproveNet, Inc. and James R.
Perry
99.1* Press Release dated June 25, 2004
*Filed herewith
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