One Horizon Group, Inc. (Form: 8-K/A, Received: 08/18/2014 17:08:52)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): August 15, 2014

One Horizon Group, Inc.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

Delaware		000-10822		46-3561419
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)		(COMMISSION FILE NO.)		(IRS EMPLOYEE IDENTIFICATION NO.)

Weststrasse 1, Baar, Switzerland, CH6340

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(ISSUER TELEPHONE NUMBER)

Hunter Taubman Weiss LLP

130 w. 42nd Street, Suite 1050

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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On July 21, 2014, (the “Closing Date”), in connection with a security purchase agreement ( the “Purchase Agreement”) between One Horizon Group, Inc. (hereinafter referred to as “we,” “us,” or the “Company”) and the investors identified on Exhibit A thereto (collectively, the “Investors”), we closed a private placement (the “Offering”) of $1,000,000 for a total of 10 units (the “Units”) at a purchase price of $100,000 per Unit, each consisting of, (i) 17,094 shares of the Company’s Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Shares”), initially convertible into 17,094 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and (ii) 10,000 Class B Warrants (the “Class B Warrant” or “Warrant(s)”), each exercisable to purchase 1 share of Common Stock ( the “Financing Transaction”), in reliance upon the exemption from securities registration afforded by Regulation S (“Regulation S”) as promulgated under the Securities Act of 1933.

Series A Preferred Certificate of Designation

On the Closing Date, we also designated 200,000 shares of preferred stock, par value $0.0001 per share as Series A Preferred Stock with a two-year term that matures (the “Maturity”) on the 24 month anniversary of the date of issuance (the “Issuance Date”) by filing a certificate of designation (the “Series A Certificate of Designation) with the Secretary of State of the State of Delaware. The designation, powers, preferences and rights of the shares of Series A Preferred Stock and the qualifications, limitations and restrictions thereof are contained in the Series A Certificate of Designation and are summarized as follows:

●	The Series A Preferred Stock shall be subordinate to and rank junior to all of our indebtedness now or hereafter outstanding.

●

The holders of Series A Preferred Stock are entitled to receive cumulative dividends during a period of twenty-four (24) months from and after the Issuance Date (the “Dividend Period”). During the Dividend Period, for each outstanding share of Series B Preferred Stock, dividends shall be payable quarterly in cash, at the rate of 10% per annum, on or before each ninety (90) day period following the Issuance Date (each, a "Dividend Payment Date"), with the first Dividend Payment Date to occur promptly following the three month period following the Issuance Date, and continuing until the end of the Dividend Period. Following the expiration of the Dividend Period, the holders of Series A Preferred Stock shall not be entitled to any additional dividend payment or coupon rate.

●	The holders of the Series A Preferred Stock shall have the voting rights to vote separately as a class on the following issues:

(i) authorize, create, issue or increase the authorized or issued amount of any class or series of preferred stock, which class or series, in any such case, ranks pari passu or senior to the Series A Preferred Stock, with respect to the distribution of assets on liquidation (as defined below);

(ii) amend, alter or repeal the provisions of the Series A Preferred Stock, whether by merger, consolidation or otherwise, so as to adversely affect any right, preference, privilege or voting power of the Series B Preferred Stock; provided , however , that any creation and issuance of another series of Junior Stock shall not be deemed to adversely affect such rights, preferences, privileges or voting powers;

(iii) issue any shares of Series A Preferred Stock (or any securities convertible into or exercisable for, directly or indirectly, any shares of Series B Preferred Stock or other security, other than Junior Stock) other than pursuant to the Purchase Agreement;

(iv) repurchase, redeem or pay dividends on, shares of common stock or any other shares of the Junior Stock (other than de minimis repurchases from our employees in certain circumstances or repurchases pursuant to a plan approved by the board of directors);

(v) amend our articles of incorporation or by-laws so as to affect materially and adversely any right, preference, privilege or voting power of the Series A Preferred Stock; provided , however , that any creation and issuance of another series of Junior Stock shall not be deemed to adversely affect such rights, preferences, privileges or voting powers;

(vi) effect any distribution with respect to Junior Stock other than as permitted pursuant to clause (iv) above;

(vii) reclassify our outstanding securities;

(viii) voluntarily file for bankruptcy, liquidate our assets or make an assignment for the benefit of our creditors; or

(ix) materially change the nature of our business.

●

Shares of Series A Preferred Stock are convertible in whole or in part, at the option of the holders, into shares of our common stock at $5.85 per share prior to the Maturity, and all outstanding shares of the Series A Preferred Stock shall automatically convert to shares of common stock upon Maturity, provided , however , at no time may holders convert shares of Series A Preferred Stock if the number of shares of common stock to be issued pursuant to such conversion would cause the number of shares of common stock beneficially owned by such holder and its affiliates in excess of 9.99% of the then issued and outstanding shares of common stock outstanding at such time, unless the holder provides us with a waiver notice in such form and with such content specified in the Series A Certificate of Designation.

●

Shares of Series A Preferred Stock are redeemable at the option of holders commencing any time after 12 months from and after the closing at a price equal to the original purchase price plus all accrued but unpaid dividends. In the event that the Company completes a financing of $10 million or greater prior to Maturity, the Series A Preferred Stock will be redeemed at a price equal to the original purchase price plus all accrued but unpaid dividends.

On the Closing, we issued 100,000 Class B Warrants. The Class B Warrants will, by their principal terms,

(a)	entitle the holder to purchase one (1) share of Common Stock;
(b)	be exercisable at any time after consummation of the Private Placement and shall expire on the date that is three (3) years following the original issuance date of the Series B Warrants;
(c)	be exercisable, in whole or in part, at an exercise price of $4.00 per share;
(d)	be exercised only for cash; and

Adjustments to Class A Warrants

In connection with and as a consideration to the closing of the Offering, on the same day, we entered with an Amended and Restated Subscription Agreement with the investor in an offering of $6,000,000 the Company closed on February 18, 2013 ( the “$6M Offering”), whereby the exercise price of Class A warrants issued in the $6M Offering was reduced from $5.94 to $4.25 per share and the amount of shares issuable upon exercise of Class A warrants were increased from 403,225 to 1,209,675. In addition, the expiration date of Class A warrants was extended an additional 12 months. As a result of entering into the Amended and Restated Subscription Agreement, the Company issued Amended Class A warrants to the investor in the $6M Offering and two individual holders of Class A Warrants the investor assigned the rights to.

For more information of the $6M Offering and Class A warrants, please refer to current reports on Form 8-K the Company filed on February 22, 2013 and September 5, 2013, respectively.

Compensation to Placement Agents

TriPoint Global Equities, LLC acted as our exclusive placement agent (the “Placement Agent”) in connection with the Offering. In connection with the services performed by the Placement Agent in the Offering, the Placement Agent received 25,000 shares of Common Stock of the Company as a substitute for a cash fee.

The foregoing description of the Purchase Agreement, Series A Preferred Stock, Class B Warrant, Amended and Restated Subscription Agreement and the Amended Class A Warrant is only a summary of their material terms, does not purport to be complete and is qualified in its entirety by reference to such documents. A copy of each of the Purchase Agreement, Series A Preferred Stock, Class B Warrant, Amended and Restated Subscription Agreement and the Amended Class A Warrant is filed as Exhibits 10.1, 3.1, 10.2, 10.3, and 10.4, respectively, to our current report on Form 8-K filed on July 25, 2014 and incorporated herein by reference.

Amendment to Series A Preferred Stock, Class A Warrant and Class B Warrant

On August 15 , 2014, we entered into an amendment with the Investors and holders of Class A Warrant whereby the Investors and holders of Class A Warrants agree not to receive any shares upon conversion of the Series A Preferred Stock, or exercise of the Class A Warrants, or exercise of the Class B Warrants if upon such conversion or exercise it would result in the issuance of shares of common stock which would exceed the aggregate number of shares of common stock the Company may issue upon conversion or exercise of the Series A Preferred Stock, Class A Warrants or Class B Warrants without breaching our obligation under the rules or regulations of the Nasdaq OMX Market, which aggregate number equals 19.99% of the numbers of shares outstanding on the Closing Date (the “Exchange Cap”). Not withstanding the forgoing, the Exchange Cap shall not apply if we obtain the approval of our stockholders for issuance of common stock in excess of such amount or obtain a written opinion from outside counsel that such approval is not required.

Amendment to Series A Preferred Stock, Class A Warrant and Class B Warrant is filed as Exhibit 10.5 to this Form 8-K and incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities

As more fully described in Item 1.01 above, on July 21, 2014, we consummated the Private Placement for the issuance and sale of 10 Units, consisting of an aggregate of (a) 170,940 shares of Series A Preferred Stock, and (b) three-year Class B warrants to purchase up to 100,000 share of Common Stock, for aggregate gross proceeds of $1,000,000. On the same day, we entered into an Amended and Restated Subscription Agreement with the investor in the $6M Offering to amend certain terms of Class A warrants as a further consideration of the closing of the Offering.

The issuance of the Units, the Series A Preferred Stock, the Class B Warrants and the Amended Class A Warrants were exempt from registration pursuant to Regulation S promulgated under the Securities Act of 1933, as amended. We made this determination based upon the representations of the Investors that they were not a “U.S. person” at that term is defined in Rule 902(k) of Regulation S under the Securities Act.

Item 9.01 Financial Statements and Exhibits.

(a)

Financial statements of business acquired.

		None.
	(c)	Shell company transactions. None.

Exhibit No.		Description

3.1		Certificate of Designation of Series A Preferred Stock ((Incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K filed on July 25, 2014)
10.1		Securities Purchase Agreement, dated July 21, 2014, by and among One Horizon Group, Inc.. and Investors Identified therein (Incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K filed on July 25, 2014)
10.2		Form of Class B Warrant (Incorporated by reference to Exhibit 10.2 of Registrant’s Current Report on Form 8-K filed on July 25, 2014)
10.3		Amended and Restated Subscription Agreement, dated July 21, 2014 (Incorporated by reference to Exhibit 10.3 of Registrant’s Current Report on Form 8-K filed on July 25, 2014)
10.4		Amended Form of Class A Warrant (Incorporated by reference to Exhibit 10.4 of Registrant’s Current Report on Form 8-K filed on July 25, 2014)
10.5		Amendment to Certain Transaction Documents, dated August 15 , 2014

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.

	ONE HORIZON GROUP, INC.

Date: August 18, 2014	By:	/s/ Martin Ward
		Martin Ward
		Chief Financial Officer

ONE HORIZON GROUP, INC.

Re: Amendments to Certain Transaction Documents

This letter shall act as a consent to the following amendments to Series A Certificate Designation (the “Certificate of Designation”) and the Class B Warrants (the “Class B Warrants”) purchased pursuant to the Securities Purchase Agreement dated July 21, 2014 (the “Securities Purchase Agreement”) between One Horizon Group, Inc. (the “Company”) and each of the Purchasers (individually, a “ Purchaser ” and collectively, the “ Purchasers ”) and amendment to the Class A Warrants (the “Class A Warrants”) which was amended and restated on July 21, 2014 in connection with the execution of the Securities Purchase Agreement.

The Company and each of the Purchasers hereby confirm and agree that:

(i)	Section 5(a) of Certificate of Designation shall be amended as follows:

(a) Right to Convert . At any time on or after the Issuance Date, the holder of any such shares of Series A Preferred Stock may, at such holder's option, subject to the limitations set forth in Section 7 herein, elect to convert (a “ Voluntary Conversion ”) all or any portion of the shares of Series A Preferred Stock held by such person into a number of fully paid and nonassessable shares of Common Stock at the Conversion Price as set forth in Section 5(c) herein. In the event of a notice of redemption of any shares of Series A Preferred Stock pursuant to Section 8 hereof, the Conversion Rights of the shares designated for redemption shall terminate at the close of business on the last full day preceding the date fixed for redemption, unless the redemption price is not paid on such redemption date, in which case the Conversion Rights for such shares shall continue until such price is paid in full. In the event of a Liquidation, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Series A Preferred Stock.

(ii)	Section 5(d)(vi) of Certificate of Designation shall be amended as follows:

(vi) Adjustments for Issuance of Additional Shares of Common Stock. For a period commencing from the Issuance Date to the earlier date of (a) one (1) year from the original effective date of a registration statement covering all or any part of the Conversion Shares pursuant to the Section 3.14 of a Securities Purchase Agreement entered into by the Company and the holders of the Series A Preferred Stocked dated July 21, 2014 (the “Securities Purchase Agreement”) , or (b) one (1) year from the date that rule 144 is available, provided that there are shares of Series A Preferred Stock outstanding that have not been converted into shares of Common Stock, (the “Anti-Dilution Period”), in the event the Company shall issue or sell any additional shares of Common Stock (otherwise than as provided in the foregoing subsections (i) through (v) of this Section 5(d) or pursuant to (X) Common Stock Equivalents (as hereafter defined) granted or issued prior to the Issuance Date or (Y) subsection (xi) below) (“Additional Shares of Common Stock”) at a price per share less than $4.00 or without consideration, then the Conversion Price upon each such issuance shall be reduced to that price (rounded to the nearest cent) determined by multiplying the Conversion Price by a fraction: (1) the numerator of which shall be equal to the sum of (A) the number of shares of Outstanding Common Stock immediately prior to the issuance of such Additional Shares of Common Stock plus (B) the number of shares of Common Stock (rounded to the nearest whole share) which the aggregate consideration for the total number of such Additional Shares of Common Stock so issued would purchase at a price of $4.00 per share; and (2) the denominator of which shall be equal to the number of shares of Outstanding Common Stock immediately after the issuance of such Additional Shares of Common Stock. No adjustment of the Conversion Price shall be made upon the issuance of any Additional Shares of Common Stock which are issued pursuant to the exercise of any warrants or other subscription or purchase rights or pursuant to the exercise of any conversion or exchange rights in any Common Stock Equivalents, if any such adjustment shall previously have been made upon the issuance of such warrants or other rights or upon the issuance of such Common Stock Equivalents (or upon the issuance of any warrant or other rights therefore). Notwithstanding the foregoing, the Company shall not be obligated to issue any shares of Common Stock pursuant to this Section 5(d)(vi), and the holder of the Series A Preferred Stock shall not have the right to receive upon conversion of any shares of the Series A Preferred Stock or exercise of any shares of the Class B warrants issued pursuant to the Securities Purchase Agreement, or exercise of any shares of the Class A Warrants amended and reissued in connection with the execution of the Securities Purchase Agreement if the issuance of such shares of Common Stock would exceed the aggregate number of Shares of Common Stock which the Company may issue upon conversion or exercise, as applicable, of the Series A Preferred Stock, Class B warrants and Class A Warrants without breaching the Company's obligations under the rules or regulations of the Nasdaq OMX Market, which aggregate number equals 19.99% of the number of shares outstanding on the Closing Date (the "Exchange Cap"), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Nasdaq OMX Market for issuances of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Required Holders. Until such approval or written opinion is obtained, no purchaser pursuant to the Securities Purchase Agreement (the "Purchasers") shall be issued in the aggregate, upon conversion or exercise, as applicable, of Series A Preferred Stock or Class B warrants or Class A Warrants, shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied by a fraction, the numerator of which is the Purchase Price paid by such Purchaser pursuant to the Securities Purchase Agreement on the Closing Date and the denominator of which is the aggregate offering amount pursuant to the Securities Purchase Agreement on the Closing Date (with respect to each Purchaser, the "Exchange Cap Allocation"). In the event that any Purchaser shall sell or otherwise transfer any of such Purchaser's Series A Preferred Stock, the transferee shall be allocated a pro rata portion of such Purchaser's Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of Series A Preferred Stock shall convert all of such holder's Series A Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Exchange Cap Allocation, then the difference between such holder's Exchange Cap Allocation and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders of Series A Preferred Stock on a pro rata basis in proportion to the aggregate principal conversion consideration of Series A Preferred Stock then held by each such holder.

(iii)

Section 6 of the Class B Warrants shall be amended as follows:

6. Exchange Cap . Notwithstanding anything to the contrary set forth in this Warrant, t he Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant, and the holder of this Warrant shall not have the right to receive upon exercise of any shares of this Warrant or conversion of any shares of the Series A Preferred Stock (the “Series A Preferred Stock”) issued pursuant to the Securities Purchase Agreement or exercise of any shares of Class A warrant (the “Class A Warrant”) amended and reissued in connection with the execution of the Securities Purchase Agreement, if the issuance of such shares of Common Stock would exceed the aggregate number of Shares of Common Stock which the Company may issue upon exercise or conversion, as applicable, of this Warrant, Class A Warrant and Series A Preferred Stock without breaching the Company's obligations under the rules or regulations of the Nasdaq OMX Market, which aggregate number equals 19.99% of the number of shares outstanding on the Closing Date (the "Exchange Cap"), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Nasdaq OMX Market for issuances of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Required Holders. Until such approval or written opinion is obtained, no purchaser pursuant to the Securities Purchase Agreement (the "Purchasers") shall be issued in the aggregate, upon exercise or conversion, as applicable, of this Warrant or Class A Warrant, or Series A Preferred Stock, shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied by a fraction, the numerator of which is the Purchase Price paid by such Purchaser pursuant to the Securities Purchase Agreement on the Closing Date and the denominator of which is the aggregate offering amount pursuant to the Securities Purchase Agreement on the Closing Date (with respect to each Purchaser, the "Exchange Cap Allocation"). In the event that any Purchaser shall sell or otherwise transfer any of such Purchaser's Warrant, the transferee shall be allocated a pro rata portion of such Purchaser's Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of this Warrant shall exercise all of such holder's Warrant into a number of shares of Common Stock which, in the aggregate, is less than such holder's Exchange Cap Allocation, then the difference between such holder's Exchange Cap Allocation and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders of this Warrant on a pro rata basis in proportion to the aggregate exercise price of shares of this Warrant then held by each such holder.

(iv)	Section 2.3 of the Class A Warrant shall be amended as follows:

2.3 RESTRICTIONS ON EXERCISE . This Warrant may not be exercised if the issuance of the Warrant Shares upon such exercise would constitute a violation of any applicable federal or state securities laws or other laws or regulations. Notwithstanding anything to the contrary set forth in this Warrant, t he Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant, and the holder of this Warrant shall not have the right to receive upon exercise of any shares of this Warrant or any shares of the Series A Preferred Stock (the “Series A Preferred Stock”) issued pursuant to the Securities Purchase Agreement to the Company entered into with certain investors on July 21, 2014 ( the “Securities Purchase Agreement”) or exercise of any shares of Class B warrant(the “Class B Warrant”) issued pursuant to the Securities Purchase Agreement, if the issuance of such shares of Common Stock would exceed the aggregate number of Shares of Common Stock which the Company may issue upon exercise or conversion, as applicable, of this Warrant, Class B Warrant and Series A Preferred Stock without breaching the Company's obligations under the rules or regulations of the Nasdaq OMX Market, which aggregate number equals 19.99% of the number of shares outstanding on the Closing Date (the "Exchange Cap"), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Nasdaq OMX Market for issuances of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Required Holders. In the event that any holder of this Warrant shall sell or otherwise transfer any of such holder's Warrant, the transferee shall be subject to the Exchange Cap set forth herein.

Other than as specifically set forth herein, the terms of Certificate of Designation, Class A Warrants and Class B Warrants shall remain in full force and effect. The amendment to Certificate of Designation, Class A Warrants and Class B Warrants and shall be effective as of the date of August 15, 2014.

Please indicate your agreement with the foregoing by signing below and returning a signed copy to the Company. Thank you.

	Very truly yours,
	ONE HORIZON GROUP, INC.

Date	By:	/s/ Martin Ward
	Name:	Martin Ward
	Title:	Chief Financial Officer

Accepted as of the date

first above written: