UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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): April 20, 2009
MDWERKS,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State or
Other Jurisdiction of Incorporation)
|
333-118155
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33-1095411
|
|
(Commission
File Number)
|
|
(IRS
Employer Identification
Number)
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Windolph
Center, Suite I
1020 N.W.
6
th
Street
Deerfield
Beach, FL 33442
(Address
of Principal Executive Offices)
(954)
389-8300
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
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
240.14-12)
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 13-e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
The
use of the terms “we,” “us” or “the Company” in this report shall be deemed to
mean MDwerks, Inc., unless the context requires otherwise. References in this
report to “our subsidiaries” shall be deemed to mean each of MDwerks Global
Holdings, Inc., Xeni Medical Systems, Inc., Xeni Financial Services, Corp., Xeni
Medical Billing, Corp. and Xeni Patient Access Solutions, Inc.
Item
1.01 Entry into a Material Definitive Agreement
On April
20, 2009, we, along with our subsidiary Xeni Financial Services, Corp. (“XFS”),
entered into a Loan and Securities Purchase Agreement (the “Loan Agreement”)
with Vicis Capital Master Fund (“Vicis”), dated April 15, 2009 pursuant to which
Vicis will lend the Company up to $3,200,000, subject to a deduction for an
original issue discount of 2%. The proceeds from the loan from Vicis will be
used for our corporate operations.
Pursuant
to the Loan Agreement, we issued a Senior Secured Promissory Note, dated April
15, 2009, to Vicis in the original principal amount of $3,851,375 (the “Vicis
Note”) comprised of the current loan of $3,200,000, and prior advances, accrued
interest, and professional and other fees of $651,375 relative to prior loans
and commitments. The Vicis Note bears interest at the rate of 13% per annum and
is payable monthly, in arrears on the first day of each month, commencing on
October 15, 2009. Principal payments in the monthly amount of $40,000 commence
on October 15, 2009 and, subject to events of default specified in the Loan
Agreement, the entire amount of principal and accrued but unpaid interest due
under the note becomes due and payable on October 15, 2011.
In
connection with the Loan Agreement and the financing provided under the Loan
Agreement, we, XFS and each of our other subsidiaries, and Vicis entered into
security agreements, dated April 15, 2009, pursuant to which we, XFS and our
other subsidiaries granted a security interest to Vicis in substantially all of
our assets. Each of our subsidiaries (other than XFS) also entered into a
guaranty agreement to guaranty all obligations under the Loan Agreement and
documents entered into in connection with the Loan Agreement.
As
partial consideration for the loan provided by Vicis we issued to Vicis a
ten-year Series K Warrant to purchase 2,550,000 shares of our common stock at a
price of $.35 per share (the “Series K Warrant”). We also adjusted
the Series J Warrant held by Vicis to reflect a decrease in the exercise price
to $.35 per share and a reduction in the number of shares underlying the Series
J warrant to 493,142.
In
connection with the issuance of the Series K Warrant, we and Vicis entered into
a registration rights agreement, dated April 15, 2009, pursuant to which, among
other things, we granted “piggyback” registration rights to Vicis for the Series
K Warrant.
In
addition, we also entered into an agreement with Vicis pursuant to which Vicis
agreed to defer the principal and interest installment amounts with respect to
the loans in the original aggregate principal amount of $5,000,000 issued by us
in favor of Vicis as assignee of Gottbetter Capital Master Fund
Ltd.
The
following summary description of the material agreements and instruments entered
into in connection with the transaction described above is qualified in its
entirety by reference to the copies of such material agreements and instruments
filed as exhibits to this Current Report on Form 8-K.
Loan
and Securities Purchase Agreement
The Loan
Agreement provides for the loan to us by Vicis of up to $3,200,000, subject to a
deduction for an original issuance discount of 2%.
The Loan
Agreement also contains certain restrictions on our ability to: (i) declare
dividends; (ii) reclassify, combine or reverse split our common stock; (iii)
incur liens; (iii) incur certain types of indebtedness; (iv) liquidate or sell a
substantial portion of our assets; (v) enter into transactions that would result
in a Change of Control (as defined in the Loan Agreement); (vi) amend our
charter documents in a way that adversely affects the rights of Vicis; (vii)
except through XFS, make loans to, or advances or guarantee the obligations of,
third parties; (viii) make intercompany transfers; (ix) engage in transactions
with officers, directors, employees or affiliates; (x) divert business to other
business entities; (xi) make investments in securities or evidences of
indebtedness (excluding of loans made by XFS) in excess of $250,000 in a
calendar year; and (xii) file registration statements, until the earlier of: (x)
60 Trading Days following the date that a registration statement or registration
statements registering all the shares of Common stock for which the Series J
Warrant is exercisable is declared effective by the Commission; and (y) the date
the shares of Common stock for which the Series K Warrant is exercisable are
saleable by Vicis under Rule 144 under the Securities Act without limitation as
to volume or manner of sale.
Events of
default under the Loan Agreement include: (i) default in the payments due under
the Vicis Note; (ii) failure to perform the covenants contained in the
Securities Purchase Agreement or the related transaction documents; (iii)
suspension from listing on the OTC Bulletin Board or other exchange for 10
consecutive trading days; (iv) the failure to timely deliver shares
of common stock upon conversion of the Common Stock or exercise of the Series K
Warrant ; (v) default in the payment of indebtedness in excess of $250,000; (vi)
a judgment entered against us in excess of $250,000 that continues undischarged
or unstayed for thirty-five (35) days after entry thereof; and (vii) insolvency,
bankruptcy and similar circumstances.
The Loan
Agreement also contains customary representations, warranties, covenants and
indemnification provisions for transactions of the type entered into between the
Company and Vicis.
Vicis
Note
The Vicis
Note bears interest at the rate of 13% per annum and is payable monthly, in
arrears on the first day of each month, commencing on October 15, 2009.
Principal payments in the monthly amount of $40,000 commence on October 15, 2009
and, subject to events of default specified in the Loan Agreement, the entire
amount of principal and accrued but unpaid interest due under the note becomes
due and payable on October 15, 2011. In the case of an Event of Default (as
defined in the Loan Agreement), the interest rate will be adjusted to 18% per
annum. The Vicis Note may be prepaid at anytime, in whole or in
part, without any penalty or premium.
Series
K Warrant
On April
15, 2009, we issued to Vicis the Series K Warrant. The Series K Warrant is
exercisable for an aggregate of 2,550,000 shares or our common stock at a price
of $.35 per share for a period of ten years from the date of issuance. The
Series K Warrant may be exercised on a cashless basis to the extent that the
resale of shares of common stock underlying the Series K Warrant is not covered
by an effective registration statement. The exercise price will be subject to
adjustment in the event of subdivision or combination of shares of our common
stock and similar transactions, distributions of assets, issuances of shares of
common stock with a purchase price below the exercise price of the Series K
Warrant, issuances of any rights, warrants or options to purchase shares of our
common stock with an exercise price below the exercise price of the Series K
Warrant, issuances of convertible securities with a conversion price below the
exercise price of the Series K Warrant. We also adjusted the Series J
Warrant held by Vicis to reflect a decrease in the exercise price to $.35 per
share and a reduction in the number of shares underlying the Series J warrant to
493,142.
Borrower
Security Agreements
Pursuant
to the terms of the Loan Agreement, we and XFS each entered into a Security
Agreement, dated April 15, 2009 with Vicis (collectively, the “Borrower Security
Agreements”). The Borrower Security Agreements secure our and XFS’ obligations
in connection with the Loan Agreement, the Vicis Note and the Transaction
Documents (as defined in the Loan Agreement). The Borrower Security Agreements
provide for a lien in favor of Vicis on all of our assets and all of the assets
of XFS.
Guaranty
Agreements
Pursuant
to the terms of the Loan Agreement, each of our subsidiaries (other than XFS)
entered into a Guaranty Agreement, dated April 15, 2009, with Vicis
(collectively, the “Guaranty Agreements”). The Guaranty Agreements provide for
unconditional guaranties of our and XFS’ obligations in connection with the Loan
Agreement and the Transaction Documents.
Guarantor
Security Agreements
Pursuant
to the terms of the Loan Agreement, each of our subsidiaries entered into a
Guarantor Security Agreement, dated April 15, 2009, with Vicis (collectively,
the “Guarantor Security Agreements”). The Guarantor Security Agreements provide
for liens in favor of Vicis on all of the assets of each of our subsidiaries
(other than XFS, which entered into one of the borrower Security Agreements
described above).
Registration
Rights Agreement
Pursuant
to the terms of the Loan Agreement, we entered into a Registration Rights
Agreement, dated April 15, 2009, with Vicis (the “Registration Rights
Agreement”). The Registration Rights Agreement requires us, subject to
certain exceptions, to include shares of common stock that may be purchased upon
exercise of the Series K Warrant in any registration statement that we file
until such time as such shares (i) have been sold pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended (“Rule 144”) or an
effective registration statement or (ii) are eligible for immediate resale under
Rule 144.
Deferral
Agreement
We
entered into a agreement with Vicis pursuant to which Vicis agreed to
defer the principal and interest installment amounts with respect to
the loans in the original aggregate principal amount of $5,000,000 issued by us
in favor of Vicis as assignee of Gottbetter Capital Master Fund
Ltd. Vicis agreed to defer the payment of each installment
amount commencing with the installment due April 1, 2009 and ending with the
installment amount due January 1, 2010. On January 1, 2010, in
addition to the regular installment amount due on January 1, 2010, we shall pay
all deferred amounts in full, in one lump sum.
Item
3.02 Unregistered sales of Equity Securities.
Item 1.01
above is incorporated into this Item 3.02 by reference.
Vicis is
an “accredited investor,” as defined under the Securities Act of 1933, as
amended, or the Securities Act. None of the Vicis Note, the Series K Warrant, or
the shares of our common stock underlying the Series K Warrant were registered
under the Securities Act, or the securities laws of any state and were offered
and sold in reliance on the exemption from registration afforded by Section 4(2)
under the Securities Act and corresponding provisions of state securities laws,
which exempts transactions by an issuer not involving any public
offering.
We made
this determination based on the representations of Vicis, which included, in
pertinent part, that Vicis is an “accredited investor” under the Securities Act,
and that Vicis was acquiring the securities it was acquiring for investment
purposes for its own account and not as nominee or agent, and not with a view to
the resale or distribution, and that Vicis understood such securities may not be
sold or otherwise disposed of without registration under the Securities Act or
an applicable exemption therefrom. Thus, the Vicis Note, the Series K
Warrant, and shares of common stock underlying the Series K Warrant may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements and certificates evidencing such
shares contain a legend stating the same.
Item
9.01 Financial Statements and Exhibits.
The
following exhibits are filed as part of this report:
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Exhibit No.
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Description
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4.1
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Loan and
Securities Purchase Agreement, dated April 15, 2009, by and
among Vicis, MDwerks, Inc. and Xeni Financial Services,
Corp.
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4.2
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Senior
Secured Promissory Note, dated April 15, 2009, issued by MDwerks, Inc. and
Xeni Financial Services, Inc. in the original principal amount of
$3,851,375
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4.3
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Series
K Warrant issued to Vicis Capital Master Fund to purchase
2,550,000 shares of common stock at a price of $.35 per
share
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4.4
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Amendment
to Series J Warrant issued to Vicis Capital Master Fund to purchase
493,142 shares of common stock at a price of $.35 per share dated April
15, 2009
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4.5
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Registration
Rights Agreement, dated April 15, 2009, between MDwerks, Inc. and Vicis
Capital Master Fund
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10.1
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Guaranty,
dated April 15, 2009, issued to Vicis Capital Master Fund by
Xeni Medical Billing, Corp.
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10.2
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Guaranty,
dated April 15, 2009, issued to Vicis Capital Master Fund by MDwerks
Global Holdings, Inc.
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10.3
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Guaranty,
dated April 15, 2009, issued to Vicis Capital Master Fund by Xeni Medical
Systems, Inc.
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10.4
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Guaranty,
dated April 15, 2009, issued to Vicis Capital Master Fund by Xeni Patient
Access Solutions, Inc.
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10.5
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Security
Agreement, dated April 15, 2009, entered into by and between Vicis Capital
Master Fund and MDwerks, Inc.
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10.6
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Security
Agreement, dated April 15, 2009, entered into by and between Vicis Capital
Master Fund and Xeni Financial Services, Corp.
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10.7
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Guarantor
Security Agreement, dated April 15, 2009, entered into by and between
Vicis Capital Master Fund and MDwerks Global Holdings,
Inc.
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10.8
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Guarantor
Security Agreement, dated April 15, 2009, entered into by and between
Vicis Capital Master Fund and Xeni Medical Systems,
Inc.
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10.9
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Guarantor
Security Agreement, dated April 15, 2009, entered into by and between
Vicis Capital Master Fund and Xeni Medical Billing,
Corp.
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10.10
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Guarantor
Security Agreement, dated April 15, 2009, entered into by and between
Vicis Capital Master Fund and Xeni Patient Access Solutions,
Inc.
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10.11
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Deferral
Agreement dated April 15, 2009, entered into by and between Vicis Capital
Master Fund and MDwerks, Inc.
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99.1
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Press
Release announcing Vicis financing
transaction
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
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MDWERKS,
INC.
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Dated:
April 22, 2009
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By:
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/s/ David M. Barnes
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David
M. Barnes
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Chief
Executive
Officer
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Exhibit
Index
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Exhibit No.
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Description
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4.1
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Loan and
Securities Purchase Agreement, dated April 15, 2009, by and
among Vicis, MDwerks, Inc. and Xeni Financial Services,
Corp.
|
|
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|
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4.2
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Senior
Secured Promissory Note, dated April 15, 2009, issued by MDwerks, Inc. and
Xeni Financial Services, Inc. in the original principal amount of
$3,851,375
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4.3
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Series
K Warrant issued to Vicis Capital Master Fund to purchase
2,550,000 shares of common stock at a price of $.35 per
share
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4.4
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Amendment
to Series J Warrant issued to Vicis Capital Master Fund to purchase
493,142 shares of common stock at a price of $.35 per share dated April
15, 2009
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4.5
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Registration
Rights Agreement, dated April 15, 2009, between MDwerks, Inc. and Vicis
Capital Master Fund
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10.1
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Guaranty,
dated April 15, 2009, issued to Vicis Capital Master Fund by
Xeni Medical Billing, Corp.
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10.2
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Guaranty,
dated April 15, 2009, issued to Vicis Capital Master Fund by MDwerks
Global Holdings, Inc.
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10.3
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Guaranty,
dated April 15, 2009, issued to Vicis Capital Master Fund by Xeni Medical
Systems, Inc.
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10.4
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Guaranty,
dated April 15, 2009, issued to Vicis Capital Master Fund by Xeni Patient
Access Solutions, Inc.
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10.5
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Security
Agreement, dated April 15, 2009, entered into by and between Vicis Capital
Master Fund and MDwerks, Inc.
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10.6
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Security
Agreement, dated April 15, 2009, entered into by and between Vicis Capital
Master Fund and Xeni Financial Services, Corp.
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10.7
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Guarantor
Security Agreement, dated April 15, 2009, entered into by and between
Vicis Capital Master Fund and MDwerks Global Holdings,
Inc.
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10.8
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Guarantor
Security Agreement, dated April 15, 2009, entered into by and between
Vicis Capital Master Fund and Xeni Medical Systems,
Inc.
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10.9
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Guarantor
Security Agreement, dated April 15, 2009, entered into by and between
Vicis Capital Master Fund and Xeni Medical Billing,
Corp.
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10.10
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Guarantor
Security Agreement, dated April 15, 2009, entered into by and between
Vicis Capital Master Fund and Xeni Patient Access Solutions,
Inc.
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10.11
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Deferral
Agreement dated April 15, 2009, entered into by and between Vicis Capital
Master Fund and MDwerks, Inc.
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99.1
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Press
Release announcing Vicis financing
transaction
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