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):
September 7, 2004 (August 31, 2004)
Trinity Learning Corporation
(Exact Name of Registrant as Specified in Its Charter)
Utah
(State of Other Jurisdiction of Incorporation)
0-8924 73-0981865
(Commission File Number) (IRS Employer Identification No.)
1831 Second Street
Berkeley, California 94710
(Address of Principal Executive Offices) (Zip Code)
(510) 540-9300
(Registrant's Telephone Number, Including Zip 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:
[ ] 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 communication 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
On August 31, 2004, we entered into a series of agreements with Laurus Master
Fund, Ltd. ("Laurus") whereby we issued to Laurus (i) a secured convertible term
note ("Note") in the principal amount of $5.5 million and (ii) a five-year
warrant ("Warrant") to purchase up to 1,600,000 shares of our common stock at a
price of $0.81 per share. Of the Note proceeds, $4,491,000 was deposited in a
restricted account as security for the total loan amount and for use by us to
make acquisitions as approved by Laurus. We also agreed to pay, out of the Loan
proceeds, the sum of $214,500 to Laurus Capital Management, LLC, the manager of
Laurus, and the sum of $44,500 to Laurus as reimbursement for Laurus' legal fees
and expenses incurred in connection with the transaction.
The principal amount of the Note carries an interest rate of prime plus two
percent, subject to adjustment, and we must make monthly payments of at least
$22,000, commencing November 1, 2004, toward the outstanding non-restricted
principal amount. This monthly payment amount will be increased proportionately
if and when funds are released from the restricted account. The Note is secured
by all of our assets and the assets of our U.S. subsidiary, TouchVision, Inc.
and by a pledge of our stock in TouchVision, Inc.
The principal amount of the Note and accrued interest thereon is convertible
into shares of our common stock at a price of $0.72 per share, subject to
anti-dilution adjustments. Under the terms of the Note, the monthly principal
payment amount of approximately $22,000.00, plus the monthly interest payment
(together, the "Monthly Payment"), is payable in either cash or, if certain
criteria are met, including the effectiveness of a current registration
statement covering the shares of our common stock into which the Note is
convertible, through the issuance of our common stock. Laurus has the option to
convert the entire principal amount of the Note, together with interest thereon,
into shares of our common stock, provided that such conversion does not result
in Laurus beneficially owning more that 4.99% of our outstanding shares of
common stock. We have agreed to register all of the shares that are issuable
upon conversion of the Note or exercise of the Warrant.
We have granted Laurus a right of first refusal with respect to any debt or
equity financings, and Laurus has the right to loan to us up to an additional
$2.2 million, within 270 days of closing, on the same terms and conditions as
contained in the Laurus agreements pertaining to the Note and Warrant.
Item 3.02 Unregistered Sales of Equity Securities
On August 31, 2004, we issued the Note and the Warrant described under Item 1.01
above. The issuance of these securities was made in reliance on Section 4(2) of
the Securities Act as a transaction not involving any public offering. No
advertising or general solicitation was employed in offering the securities, the
offerings and sales were made to one entity, and we restricted transfer of the
securities in accordance with the requirements of the Securities Act. The
recipient of the securities represented its intention to acquire the securities
for investment only and not with a view to or for sale in connection with any
distribution thereof, and appropriate legends were affixed to the instruments
issued in such transactions.
Item 7.01 Regulation FD Disclosure
On August 13, 2004, we filed a registration statement on Form SB-2 with the
Securities & Exchange Commission, covering the resale of approximately 27
million common shares held by a number of our stockholders. We currently expect
the registration statement to go effective shortly after the filing of our
annual report on Form 10-KSB, which is due to be filed in late September.
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Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed with this Current Report on Form
8-K:
Exhibit
Number Description
------- -----------
10.1 Securities Purchase Agreement dated August 31, 2004 between
Trinity Learning Corporation and Laurus Master Fund, Ltd.
10.2 Restricted Account Agreement dated August 31, 2004 between North
Fork Bank, Trinity Learning Corporation and Laurus Master Fund,
Ltd.
10.3 Restricted Account Letter Agreement dated August 31, 2004
between Laurus Master Fund, Ltd. and Trinity Learning
Corporation
10.4 Secured Convertible Term Note dated August 31, 2004 issued by
Trinity Learning Corporation to Laurus Master Fund, Ltd.
10.5 Common Stock Purchase Warrant dated August 31, 2004 issued by
Trinity Learning Corporation to Laurus Master Fund, Ltd.
10.6 Registration Rights Agreement dated August 31, 2004 between
Trinity Learning Corporation and Laurus Master Fund, Ltd.
10.7 Stock Pledge Agreement dated August 31, 2004 among Laurus Master
Fund, Ltd., Trinity Learning Corporation and TouchVision, Inc.
10.8 Master Security Agreement dated August 31, 2004 among Laurus
Master Fund, Ltd., Trinity Learning Corporation and TouchVision,
Inc.
10.9 Subsidiary Guarantee dated August 31, 2004 among Laurus Master
Fund, Ltd. and TouchVision, Inc.
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.
TRINITY LEARNING CORPORATION
Date: September 7, 2004 By: /s/ Douglas Cole
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Douglas Cole, Chief Executive Officer
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