ITEM 1.01(a) Entry Into a Material Definitive Agreement
GeneLink, Inc. (the "Company") is offering up to $1,500,000 in principal
amount of convertible notes (the "Convertible Notes") to accredited investors.
Holders of the Convertible Notes will receive one and one-half (11/2) warrants
(the "Warrants") to acquire shares of common stock ("Common Stock") of the
Company for each $1.00 of Convertible Notes acquired by such holders.
On February 26, 2009, the Company issued to an accredited investor $1,000,000
principal amount of Convertible Notes and issued 1,500,000 Warrants to acquire
shares of Common Stock at an exercise price of $0.11 per share in connection
therewith. The Warrants are exercisable on or after August 26, 2009 and on or
before February 26, 2014.
The Convertible Notes mature on February 26, 2014 and bear interest at the
rate of 8% per year through February 26, 2011 and thereafter bear interest at
the rate of 10% per year. The Convertible Notes may not be prepaid without the
approval of the holders of the Convertible Notes.
The Convertible Notes are convertible at the option of the holders of the
Convertible Notes upon the earlier to occur of (a) August 26, 2009 or (b) the
adoption and filing of an amendment to increase the capitalization of the
Company to at least 175,000,000 shares of Common Stock (the "Initial Conversion
Date"). Additionally, the Convertible Notes are exercisable at the option of the
holders of the Convertible Notes at any time upon the occurrence of a Change in
Control Event (as defined in the Convertible Notes). A mandatory conversion of
the Convertible Notes will occur if after the Initial Conversion Date the
closing price of the Common Stock of the Company is at least $0.50 per share for
30 consecutive trading days.
The conversion price for the Convertible Notes is $0.10 per share, subject to
adjustment in the event of a stock split, combination, reclassification,
reorganization or similar event.
The Company intends to use the net proceeds of the note offering to upgrade
the infrastructure of GeneWize Life Sciences, Inc., a wholly-owned subsidiary of
the Company, to enable GeneWize to support the anticipated demand for its
products and services, to fund the relaunching of certain GeneWize products and
for general corporate purposes.
The issuance and sale of the Convertible Notes and Warrants were made in
reliance upon the exemption provided in Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act") and/or Regulation D promulgated under
the Securities Act. No form of general solicitation or general advertising was
conducted in connection with the issuance. Each of the Convertible Notes and
Warrants contain restrictive legends preventing the sale, transfer or other
disposition of such Convertible Notes and Warrants, unless registered under the
Securities Act, or pursuant to an exemption therefrom.
The Company issued First Equity Capital Securities, Inc., as placement agent
for the note offering, warrants to purchase 1,000,000 shares of Common Stock at
an exercise price of $0.10 per share and warrants to purchase 150,000 shares of
Common Stock at an exercise price of $0.11 per share. The Company also paid
First Equity Capital Securities, Inc. a cash fee of $80,000. Kenneth R. Levine,
a holder of more than 5% of the equity securities of the Company, is an officer
and owner of First Equity Capital Securities, Inc.
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The foregoing summary of the Convertible Notes is qualified by reference to
the form of Convertible Notes, a copy of which is filed as Exhibit 4.1 to this
Current Report.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement.
The Information included in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
ITEM 3.02 Unregistered Sales of Equity Securities
The Information included in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 3.02.
ITEM 8.01 Other Events
On March 4, 2009, GeneLink, Inc. issued a press release announcing that it
has raised a total of $2,418,500 in two private placements and announcing new
products and programs to be launched in March 2009. A copy of the press release
dated March 4, 2009 making the announcements is filed as Exhibit 99.1 to this
Current Report and is incorporated by reference into this Item 8.01.
ITEM 9.01 Financial Statement and Exhibits
Exhibit No. Description
4.1 Form of Convertible Note
99.1 Press Release dated March 4, 2009
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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.
GeneLink, Inc.
(Registrant)
By: /s/ Monte E. Taylor, Jr.
Monte E. Taylor, Jr.
Chief Executive Officer
Dated: March 4, 2009
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