UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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): August 13,
2008
NARROWSTEP
INC.
(Exact
Name of Registrant as Specified in Charter)
Delaware
(State of
Jurisdiction of Incorporation)
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333-108632
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33-1010941
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(Commission File
Number)
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(I.R.S. Employer Identification
No.)
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116
VILLAGE BOULEVARD, SUITE 200
PRINCETON,
NEW JERSEY 08540
(Address
of Principal Executive Offices) (Zip Code)
(609)
945-1760
(Registrant's
telephone number, including area code)
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):
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
Entry into a Material
Definitive Agreement.
Item
3.02
Unregistered Sale of
Equity Securities.
As
previously disclosed on a Current Report on Form 8-K filed with the Securities
and Exchange Commission on June 3, 2008, Narrowstep Inc., a Delaware corporation
(“
Narrowstep
”
or the “
Company
”), entered
into an Agreement and Plan of Merger (the “
Merger Agreement
”)
with Onstream Media Corporation, a Florida corporation (“
Onstream
”), Onstream
Merger Corp., a newly formed Delaware corporation and a wholly owned subsidiary
of Onstream (“
Merger
Sub
”), and W. Austin Lewis IV, as stockholder representative for the
Narrowstep stockholders, dated as of May 29, 2008. Pursuant to the
Merger Agreement, Onstream will acquire Narrowstep by means of a merger of
Merger Sub with and into Narrowstep (the
“Merger
”) with
Narrowstep continuing as the surviving corporation and a wholly-owned subsidiary
of Onstream after the Merger (the “
Surviving
Corporation
”).
On August
13, 2008, Narrowstep, Onstream and Merger Sub entered into an amendment to the
Merger Agreement (the “
Amendment
”). Pursuant
to the Amendment, among other things, the aggregate number of shares of Onstream
common stock, par value $0.0001 per share (“
Onstream Common
Stock
”), initially issuable in the Merger in exchange for each
outstanding share of Narrowstep common stock, par value $0.000001 per share
(“
Company Common
Stock
”), other than shares held by stockholders who have perfected their
appraisal rights under Delaware law, shares held by Onstream and shares held by
an subsidiary of the Company (collectively, the “
Shares to be
Converted
”) was reduced from 10,500,000 to 9,100,000
shares. In addition, the calculation of the aggregate number of
Onstream Common Stock initially issuable in the Merger in exchange for the
Shares to be Converted was modified to limit the value attributed to
Narrowstep’s cash balances at closing to a maximum of
$600,000. Further, Narrowstep agreed to increase the aggregate value
of its Series A Preferred Stock, par value $0.000001 per share (the “
Series A Preferred
Stock
”), from at least $300,000 to $1,000,000 and to increase the number
of shares of Onstream Common Stock from 600,000 to 2,000,000 shares into which
the Series A Preferred Stock will convert. In order to assure that
this condition would be satisfied, the Company entered into subscription
agreements (the “
Subscription
Agreements
”) with five of its existing stockholders. The sale of the
Series A Preferred Stock pursuant to the Subscription Agreements is exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended,
and Regulation D promulgated thereunder.
In
accordance with the terms of the Amendment, the Contingent Value Rights
Agreement (the “
CVR
Agreement
”) was revised. Pursuant to those revisions, among
other things, the relevant revenue measurement time periods were changed so that
the initial revenue measurement time period will now commence on the 180th day
following the date of closing of the Merger, rather than at closing and the
second year revenue period will now commence on the 18th month anniversary of
the closing date. In addition, the revenue target for the first
revenue time period was reduced from $4,500,000 to $4,250,000, if the Minimum
Exchange Ratio (as defined in the Merger Agreement) is used. The
definition of Second Year Revenue Shares was also revised so that if the First
Year Revenue is less than $4,250,000, no additional shares of Onstream Common
Stock will be issuable in respect of Second Year Revenue.
The
Amendment also extends the date by which the parties may terminate the Merger
Agreement (the “
Termination Date
”) if
the Merger has not been completed. The Termination Date, which was
previously October 1, 2008, is now November 30, 2008.
The
foregoing descriptions of the Amendment, which is attached as Exhibit 2.1, and
the revisions to the CVR Agreement, attached as Exhibit C to the Amendment, are
summaries only, do not purport to be complete and are qualified in their
entirety by reference to the full text of the agreements as described above
which are filed as Exhibits to this report and are incorporated herein by
reference.
Item
9.01. Financial
Statements and Exhibits.
(d)
Exhibits
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Exhibit
No.
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Description
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2.1
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Amendment
to the Agreement and Plan of Merger, among Onstream Media Corporation,
Onstream Merger Corp. and Narrowstep Inc., dated as August 13,
2008.
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10.1
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Form
of Subscription Agreement, dated as of August 13, 2008, by and between
Narrowstep Inc. and the investors party
thereto.
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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.
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NARROWSTEP
INC.
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By:
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/s/ David
C. McCourt
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Name:
David C. McCourt
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Title:
Chairman and Interim Chief Executive Officer
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Date: August
13, 2008