Delaware
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333-175667
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27-3848069
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(State or other jurisdiction
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(Commission File
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(IRS Employer
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of incorporation)
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Number)
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Identification Number)
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1455 Corley Drive
London, Ontario N6G 2K5
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·
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At the closing of the transactions contemplated by the Asset Purchase Agreement (the “Asset Purchase”), the Company sold an aggregate of 4,001,000 units (“Units”) in a private placement (the “Private Placement”) of its securities to certain investors (the “Investors”). $400,000 of the Units were sold at a per Unit price of $0.10.
Additionally, and included in the foregoing Unit total, an aggregate of $200,000 of bridge notes (plus $1,000 in accrued but unpaid interest on such bridge notes) of the Company converted into the Private Placement at a per Unit price of $0.10. Each Unit consisted of (i) one share of the Company’s newly designated Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), which is convertible into one share of the Company’s common stock and (ii) a five year warrant (each, a “Warrant”, and collectively, the “Warrants”) to purchase an additional share of the Company’s common stock at a per share exercise price of $0.10.
In connection with the Private Placement, the Company and the investors entered into a Registration Rights Agreement (the “Registration Rights Agreement”) whereby the Company agreed to register for resale on a registration statement on Form S-1 (the “Registration Statement”) (i) the shares of common stock issuable upon conversion of the Series A Preferred Stock and (ii) the shares of common stock underlying the Warrants. The Company agreed to file the Registration Statement with the Securities and Exchange Commission (the “SEC”) within 90 days of the final closing of the Private Placement and to cause the Registration Statement to be declared effective within 180 days of the filing date.
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Also in connection with the Private Placement, the Company and the Investors entered into a lock-up agreement (the “Investor Lock-up Agreement”) pursuant to which all of the shares of Series A Preferred Stock and the Warrants sold in the Private Placement, and the shares of common stock issuable upon conversion of the Series A Preferred Stock and underlying the Warrants, may not, subject to certain exceptions and a leak-out provision, be sold or transferred until the earlier of (i) 12 months from the closing of the Private Placement or (ii) the last day of a consecutive 20 trading day period that the Company’s common stock has (x) had a minimum closing price of $0.75 per share and (y) had a minimum trading volume of at least 120,000 shares of common stock per day.
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·
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Immediately following the Asset Purchase, under the terms of an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations, the Company transferred all of its pre-Asset Purchase assets and liabilities to its wholly owned subsidiary, Plesk Holdings, Inc., a Delaware corporation (“SplitCo”). Thereafter, pursuant to a Stock Purchase Agreement, the Company transferred all of the outstanding capital stock of SplitCo to certain former shareholders of the Company in exchange for cancellation of an aggregate of 112,500,000 shares of the Company’s common stock held by such persons (the “Split-Off”), which left 30,000,000 shares of the Company’s common stock held by persons who were stockholders of the Company prior to the Asset Purchase and which constitute the Company’s “public float” that will continue to represent the shares of the Company’s common stock eligible for resale without further registration by the holders thereof, until such time as the applicability of Rule 144 or other exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), or the effectiveness of a further registration statement under the Securities Act, permits additional sales of issued shares.
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The Company adopted, and its stockholders approved, an equity incentive plan (the “2013 Incentive Plan”) pursuant to which 10,000,000 shares of the Company’s authorized but unissued common stock may be issued as incentive awards to officers, directors, employees, consultants and other qualified persons.
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Meet and Chat.
The Yappn platform will enable users to meet people from all over the world without any language barriers and to interact with them through online chatting and forums by providing access to topical discussion boards in almost 70 languages. This will permit real-time multiple language conversations to co-exist without the “fracturing” that comes as a result of many people posting in multiple languages to a single chat area or splintering the audience by segregating posts by language. We intend that users will be able to connect to other social networks and to interact with friends and followers on
Facebook, Yahoo!, Twitter and other social media.
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Engage and Consume.
Unlike many social media sites, Yappn will not be primarily “friend” focused, but instead will be a “topic” or “interest” focused site bringing people together to discuss current events, celebrities, technology, sports, entertainment and other popular areas of conversation.
Yappn will have an extensive “gamification” system that will
reward users for their engagement through virtual “trophies”, “badges”, and “medals” for participation in selected events.
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·
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Companies that offer full-featured products that provide a similar
range of communications and related capabilities that we provide. These offerings include, for example, Facebook, LinkedIn, Craigslist, Google+, which Google has integrated with certain of its products, including search and Android, as well as other, largely regional, social networks that have strong positions in particular countries, such as Mixi in Japan and vKontakte and Odnoklassniki in Russia.
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Companies that provide web- and mobile-based information and entertainment products and services that are designed to engage users.
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Companies that offer platforms for game developers to reach broad audiences with free-to-play games including Facebook and Apple's iOS and Google's Android mobile platforms.
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Traditional and online businesses that offer corporate sponsorship opportunities and provide media for marketers to reach their audiences and/or develop tools and systems for managing and optimizing advertising campaigns.
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improve existing, and implement new, operational, financial and management controls, reporting systems and procedures;
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install enhanced management information systems; and
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train, motivate and manage our employees.
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changes in our industry;
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·
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competitive pricing pressures;
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·
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our ability to obtain working capital financing;
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·
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additions or departures of key personnel;
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·
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limited "public float" in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock;
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·
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sales of our common stock (particularly following effectiveness of any resale registration statements or expiration of lockup agreements);
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·
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our ability to execute our business plan;
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·
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operating results that fall below expectations;
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·
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loss of any strategic relationship;
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·
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regulatory developments;
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·
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economic and other external factors;
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·
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period-to-period fluctuations in our financial results; and
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·
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inability to develop or acquire new or needed technology.
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Name of Beneficial Owner
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Number of Shares Beneficially Owned
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Percentage
Beneficially Owned
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5% Owners
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Intertainment Media, Inc. (1)
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70,000,000
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65.81%
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Officers and Directors
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David Lucatch (1)
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--
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--
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Steven Wayne Parsons
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--
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--
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Marc Saltzman
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--
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--
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Neil Stiles
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--
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--
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Herb Willer
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--
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--
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All executive officers and directors as a group (5 persons)
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0
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0
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(1)
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David Lucatch is the Chief Executive Officer of Intertainment Media, Inc., and, as such, has sole voting and investment power over the 70,000,000 shares of common stock held by Intertainment Media, Inc. Mr. Lucatch disclaims beneficial ownership over such shares of the Company held by Intertainment Media, Inc.
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(d)
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Exhibits.
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The exhibit listed in the following Exhibit Index is filed as part of this Current Report on Form 8-K.
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Exhibit No.
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Description
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2.1
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Asset Purchase Agreement by and among Yappn Corp., Yappn Acquisition Sub., Inc. and Intertainment Media, Inc., dated March 28, 2013
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3.1
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Certificate of Designation and Preferences of Series A Convertible Preferred Stock, filed with the Secretary of State of Delaware on May 28, 2013
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10.1
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Lock-Up Agreement by and between Yappn Corp. and Intertainment Media, Inc.
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10.2
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Form of Warrant
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10.3
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Form of Subscription Agreement
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10.4
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Form of Registration Rights Agreement
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10.5
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Form of Investor Lockup Agreement
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10.6
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Form of Note Purchase Agreement
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10.7
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Form of Note
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10.8
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Form of First Amendment to Note Purchase Agreement
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10.9
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Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations
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10.10
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Stock Purchase Agreement
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10.11
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2013 Equity Incentive Plan
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10.12
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Bill of Sale dated March 28, 2013
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10.13
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Services Agreement by and between Ortsbo, Inc., Ortsbo USA, Inc. and Intertainment Media, Inc. dated March 21, 2013
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10.14
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Form of Indemnification Agreement
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YAPPN CORP.
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Dated: April 3, 2013
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/s/ David Lucatch
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David Lucatch
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Chief Executive Officer
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(i)
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the Bill of Sale;
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(ii)
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the Assignment of Intellectual Property;
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(iii)
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the Services Agreement;
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(i)
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a Bill of Sale;
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(ii)
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the Assignment of Intellectual Property, if the signature of the Buyer is required;
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(iii)
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a Buyer Officer’s Certificate dated as of the Closing Date; and
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(iv)
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any other documents reasonably requested in writing by Seller in connection with the Purchased Assets.
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(i)
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a Company Officer’s Certificate dated as of the Closing Date; and
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(ii)
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any other documents reasonably requested in writing by Seller in connection with the Purchased Assets.
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(i)
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Buyer and Company will return all documents and other material received from Seller relating to the Purchased Assets, or the transactions contemplated hereby, whether so obtained before or after the execution hereof, to Seller and, if applicable, Seller shall return the Purchase Price to Company; and
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(ii)
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all confidential information received by Buyer and Company with respect to Seller or the Purchased Assets will be treated as confidential information.
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INTERTAINMENT MEDIA, INC.
By:
Name:
Title:
YAPPN ACQUISITION SUB, INC.
By:
Name:
Title:
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YAPPN CORP.
By:
Name:
Title:
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WARRANT
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NO. ___
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YAPPN CORP.
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________ Shares
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(A) = the VWAP on the trading day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;
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(B) = the Warrant Price of this Warrant, as adjusted hereunder; and
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TO:
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Tel: (___) ___-____
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Fax: (___) ___-____
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8.
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MISCELLANEOUS PROVISIONS
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x $0.10 for each Unit =
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Units subscribed for
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Aggregate Purchase Price
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1.
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___
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Individual
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7.
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___
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Trust/Estate/Pension or Profit sharing Plan
Date Opened:______________
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2.
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___
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Joint Tenants with Right of Survivorship
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8.
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___
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As a Custodian for
________________________________
Under the Uniform Gift to Minors Act of the State of
________________________________
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3.
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___
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Community Property
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9.
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___
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Married with Separate Property
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4.
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___
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Tenants in Common
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10.
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___
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Keogh
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5.
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___
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Corporation/Partnership/ Limited Liability Company
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11.
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___
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Tenants by the Entirety
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6.
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___
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IRA
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_____________________________________________________________________________
Exact Name in Which Title is to be Held
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_________________________________
Name (Please Print)
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_________________________________
Name of Additional Purchaser
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_________________________________
Residence: Number and Street
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_________________________________
Address of Additional Purchaser
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_________________________________
City, State and Zip Code
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_________________________________
City, State and Zip Code
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_________________________________
Social Security Number
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_________________________________
Social Security Number
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_________________________________
Telephone Number
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_________________________________
Telephone Number
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_________________________________
Fax Number (if available)
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________________________________
Fax Number (if available)
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_________________________________
E-Mail (if available)
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________________________________
E-Mail (if available)
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__________________________________
(Signature)
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________________________________
(Signature of Additional Purchaser)
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ACCEPTED this ___ day of _________ 2013, on behalf of the Company.
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By:_________________________________
Name:
Title:
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_____________________________________________________________________________
Name of Entity (Please Print)
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Date of Incorporation or Organization:
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State of Principal Office:
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Federal Taxpayer Identification Number:
____________________________________________
Office Address
____________________________________________
City, State and Zip Code
____________________________________________
Telephone Number
____________________________________________
Fax Number (if available)
____________________________________________
E-Mail (if available)
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By: _________________________________
Name:
Title:
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[seal]
Attest: _________________________________
(If Entity is a Corporation)
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_________________________________
_________________________________
Address
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ACCEPTED this ____ day of __________ 2013, on behalf of the Company.
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By: _________________________________
Name:
Title:
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o
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You are (
i
) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “
Securities Act
”), (
ii
) a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in an individual or fiduciary capacity, (
iii
) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), (
iv
) an insurance company as defined in Section 2(13) of the Securities Act, (
v
) an investment company registered under the Investment Company Act of 1940, as amended (the “
Investment Company Act
”), (
vi
) a business development company as defined in Section 2(a)(48) of the Investment Company Act, (
vii
) a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958, as amended, (
viii
) a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions, for the benefit of its employees and you have total assets in excess of $5,000,000, or (
ix
) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“
ERISA
”) and (1) the decision that you shall subscribe for and purchase shares of common stock and warrants to purchase common stock (the “
Units
”), is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or (2) you have total assets in excess of $5,000,000 and the decision that you shall subscribe for and purchase the Shares is made solely by persons or entities that are accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act (“
Regulation D
”) or (3) you are a self-directed plan and the decision that you shall subscribe for and purchase the Units is made solely by persons or entities that are accredited investors.
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o
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You are a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.
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o
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You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “
Code
”), a corporation, Massachusetts or similar business trust or a partnership, in each case not formed for the specific purpose of making an investment in the Units and its underlying securities in excess of $5,000,000.
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o
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You are a director or executive officer of the Company.
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o
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You are a natural person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000 (excluding residence) at the time of your subscription for and purchase of the Units.
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o
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You are a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with your spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable expectation of reaching the same income level in the current year.
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o
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You are a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Units and whose subscription for and purchase of the Units is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D.
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o
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You are an entity in which all of the equity owners are persons or entities described in one of the preceding paragraphs.
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____ ____
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I/We understand that this investment is not guaranteed.
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____ ____
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I/We are aware that this investment is not liquid.
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____ ____
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I/We are sophisticated in financial and business affairs and are
able to evaluate the risks and merits of an investment in this
offering.
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____ ____
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I/We confirm that this investment is considered “high risk.” (This type of investment is considered high risk due to the inherent risks
including
lack of liquidity and lack of diversification. Success or
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failure of private placements such as this is dependent on the corporate issuer of
these securities and is outside the control of the investors. While potential loss is limited to the amount invested,
such loss is possible.)
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·
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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·
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block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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·
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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·
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privately negotiated transactions;
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·
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settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;
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broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
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·
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through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
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·
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a combination of any such methods of sale; or
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·
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any other method permitted pursuant to applicable law.
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Telephone:
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Fax:
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Contact Person:
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2.
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Closing
.
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5.
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Additional Covenants of the Company
.
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To the Company:
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Plesk Corp.
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To Lender:
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To the address on the signature page attached hereto.
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By:
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_______________________________
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$[_____]
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[___], 2013
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A.
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The Company and the Lender are parties to the Agreement, pursuant to which the Company sold to the Lender, and Lender purchased from the Company, upon the terms and subject to the conditions set forth in the Agreement, a promissory note, which accrues interest at the rate of 6% per annum (the “Note”).
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B.
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The Agreement and Note provide that upon the consummation of a Reverse Merger Transaction, the face value of the Note, plus all accrued and unpaid interest thereon automatically, by the terms of the Note, shall be exchanged into the Reverse Merger Financing on a dollar for dollar basis in the applicable dollar amount at the per share offering price of the securities in such Reverse Merger Financing on the same terms and conditions as all other investors in such Reverse Merger Financing. Upon such exchange, the Note will be immediately cancelled upon delivery of the securities.
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THE COMPANY
Yappn Corp.
By:
Name: Steven Wayne Parsons
Tite: Chief Executive Officer
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THE LENDER
By:
Name:
Tite:
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1.
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PURPOSE OF PLAN
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2.
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ELIGIBILITY
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3.
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PLAN ADMINISTRATION
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4.
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SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMIT
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5.
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AWARDS
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•
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services rendered by the recipient of such award;
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•
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cash, check payable to the order of the Corporation, or electronic funds transfer;
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•
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notice and third party payment in such manner as may be authorized by the Administrator;
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•
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the delivery of previously owned shares of Common Stock that are fully vested and unencumbered;
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•
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by a reduction in the number of shares otherwise deliverable pursuant to the award; or
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•
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subject to such procedures as the Administrator may adopt, pursuant to a “cashless exercise” with a third party who provides financing for the purposes of (or who otherwise facilitates) the purchase or exercise of awards.
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6.
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EFFECT OF TERMINATION OF SERVICE ON AWARDS
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8.
|
OTHER PROVISIONS
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