UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest reported): August 23, 2007
ONE VOICE TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)
Nevada 000-27589 95-4714338
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation or Organization) File Number) Identification No.)
4250 Executive Square, Suite 770, La Jolla, CA 92307
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (858) 552-4466
Copies to:
Darrin M. Ocasio, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway
New York, New York 10006
Phone: (212) 930-9700
Fax: (212) 930-9725
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):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] 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
SETTLEMENT AGREEMENT
On August 23, 2007, One Voice Technologies, Inc. (the "Company") entered
into a Settlement Agreement and Mutual Release with La Jolla Cove Investors,
Inc. ("LJCI") pursuant to which we agreed with LJCI to forever settle, resolve
and dispose of all claims, demands and causes of action asserted, existing or
claimed to exist between the parties because of or in any way related to a legal
proceeding in the San Diego County Superior Court (the "Court") entitled La
Jolla Cove Investors, Inc. vs. One Voice Technologies, Inc., Case No. GIC850038
(the "Action"). LJCI received a judgment in its favor against the Company in
connection with the Action whereby the Company owes LJCI an amount equal to
$408,594.48 (the "Owed Amount"). Under the Settlement Agreement, the parties
reached a final resolution with respect to such Owed Amount whereby (i) LJCI
shall receive $200,000 within 15 days of the date of the Agreement and (ii) the
difference between the Owed Amount and $200,000 shall be payable at a later date
(the "Remaining Owed Amount"). The payment of the Remaining Owed Amount shall be
made to LJCI in the following manner:
o Concurrently with the execution of the Agreement, the Company shall
transfer to an independent escrow agent, on behalf of LJCI, all
right, title and interest to 30,000,000 shares of Common Stock of
the Company (the "Escrow Shares"), issued in 30 increments of
1,000,000 shares. On the one year anniversary of the Agreement,
1,000,000 Escrow Shares shall be released to LJCI whereby LJCI shall
be able to sell such shares in open market transactions provided
such sales do not exceed more than 14% of the corresponding daily
volume of such shares on the trading market on which the Company's
securities are sold. LJCI shall continue to receive the Escrow
Shares, provided they satisfy the volume limitation set forth above
and LJCI's ownership of the Company's common stock does not exceed
4.99% of the Company's then issued and outstanding shares of common
stock, until the Remaining Owed Amount is satisfied;
o Upon notice from LJCI that the Remaining Owed Amount has been
satisfied by the sale of the Escrow Shares either (i) Alpha Capital
Ansalt ("Alpha") shall have the ability within 15 business days to
purchase any remaining Escrow Shares at a 20% discount to the
current market price of the shares or (ii) if Alpha does not
exercise its right to purchase the shares, the Company shall have
the ability to redeem the remaining Escrow Shares within 5 business
days.
o At anytime while the Remaining Owed Amount is outstanding, the
Company or Alpha may pay in cash to LJCI an amount equal to the
Remaining Owed Amount and either (i) Alpha shall have the ability
within 15 business days to purchase any remaining Escrow Shares at a
20% discount to the current market price of the shares or (ii) if
Alpha does not exercise its right to purchase the shares, the
Company shall have the ability to redeem the remaining Escrow Shares
within 5 business days.
LJCI has contractually agreed to restrict their ability to exercise the
Escrow Shares such that the number of shares of the Company common stock held by
it does not exceed 4.99% of the Company's then issued and outstanding shares of
common stock.
Upon receipt of the Owed Amount, LJCI will file a Satisfaction of Judgment
in the appropriate court and grant the Company a release from any and all
actions related to the Action.
SEPTEMBER 7 FINANCING
On September 7, 2007, the Company entered into a subscription agreement
(the "Agreement") with accredited investors and/or qualified institutional
investors (the "Investors") pursuant to which the investors subscribed to
purchase an aggregate principal amount of $420,000 in convertible promissory
notes for an aggregate purchase price of $210,000. The Company also issued
10,000,000 Class A common stock purchase warrants to the Investors. The Class A
warrants are exercisable until four years from the closing date at an exercise
price of $0.02 per share. The exercise price of the Class A warrants will be
adjusted in the event of any stock split or reverse stock split, stock dividend,
reclassification of common stock, recapitalization, merger or consolidation. In
addition, the exercise price of the warrants will be adjusted in the event that
we spin off or otherwise divest ourselves of a material part of our business or
operations or dispose all or a portion of our assets. The proceeds of the
offering were used to make payment under the Settlement Agreement described
above.
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The secured convertible notes mature 1 year after the date of issuance.
Each investor shall have the right to convert the secured convertible notes
after the date of issuance and at any time, until paid in full, at the election
of the investor into fully paid and nonassessable shares of our common stock.
The conversion price per share shall be the lower of (i) $0.015 or (ii) 80% of
the average of the three lowest closing bid prices for our common stock for the
30 trading days prior to, but not including, the conversion date as reported by
Bloomberg, L.P. on any principal market or exchange where our common stock is
listed or traded. The conversion price is adjustable in the event of any stock
split or reverse stock split, stock dividend, reclassification of common stock,
recapitalization, merger or consolidation. In addition, the conversion price of
the secured convertible notes will be adjusted in the event that we spin off or
otherwise divest ourselves of a material part of our business or operations or
dispose all or a portion of our assets.
The full principal amount of the Notes is due upon default under the terms
of Notes.
Each of the Purchasers have contractually agreed to restrict their ability
to exercise the Warrants and convert the Notes such that the number of shares of
the Company common stock held by each of them and their affiliates after such
conversion or exercise does not exceed 4.99% of the Company's then issued and
outstanding shares of common stock.
We are obligated to file a registration statement registering the shares
of our common stock issuable upon conversion of the secured promissory notes and
exercise of the Class A warrants no later than 270 days after the closing date
and cause it to be effective on or prior to 330 days after the closing date. If
we do not meet the aforementioned filing and effectiveness deadlines, we shall
pay to each investor an amount equal to 1% for the first 30 days or part thereof
of the pendency of such non-registration event and 2% for each 30 days or part
thereof thereafter, of the purchase price of the secured convertible notes
remaining unconverted and purchase price of the shares of our common stock
issued upon conversion of the notes.
As of the date hereof, the Company is obligated on $420,000 face amount of
Notes issued to the Investors. The Notes are a debt obligation arising other
than in the ordinary course of business which constitute a direct financial
obligation of the Company.
The securities were offered and sold to the Investor in a private
placement transaction made in reliance upon exemptions from registration
pursuant to Section 4(2) under the Securities Act of 1933 and Rule 506
promulgated thereunder. The Investor is an accredited investor as defined in
Rule 501 of Regulation D promulgated under the Securities Act of 1933.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
See Item 1.01 "September 7, 2007 Financing".
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
See Item 1.01 "September 7, 2007 Financing".
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description
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4.1 Form of Convertible Note
4.2 Form of Warrant
99.1 Form of Subscription Agreement
99.2 Settlement Agreement, dated August 23, 2007, by and between La
Jolla Cove Investors, Inc. and One Voice Technologies, Inc.
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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.
ONE VOICE TECHNOLOGIES, INC.
Date: September 17, 2007 By: /s/ Dean Weber
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Name: Dean Weber
Title: Chief Executive Officer
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