Unassociated Document
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): July 21, 2008
PROMOTIONS
ON WHEELS HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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333-140378
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20-5150818
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(State
of other jurisdiction
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(Commission
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(IRS
Employer
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|
of
incorporation)
|
File
Number)
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Identification
No.)
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1
Hampshire Court
Newport
Beach, CA 92660
(Address
of principal executive office)
(949)
642-7816
(Registrant's
telephone number, including area code)
2240
Timber Rose Drive, Las Vegas, Nevada 89134
(Former
name, former address and former fiscal year, 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)
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Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR 240.14a-12) |
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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 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item
1.01 Entry
into a Material Definitive Agreement
On
June
30, 2008 we entered into a license agreement with WQN, Inc., whose common stock
trades on the pink sheets under the symbol WQNI. Under the agreement we have
the
right to license the software technology on a non-exclusive worldwide basis
and
offer the software on an exclusive basis to: Home Shopping Network, QVC, Inc.,
Walgreens Drugstore, CVS Pharmacy and Walmart. We have agreed to pay a one
time
payment of $300,000 and a 35% royalty of the net licensing revenue collected
by
us. A copy of the license agreement is attached hereto as Exhibit
2.1.
Effective
June 30, 2008, we entered into the Series A Convertible Preferred Stock
subscription agreements described in Item 3.02 below.
Item
3.02 Unregistered
Sales of Equity Securities
Effective
June 30, 2008, we agreed to issue shares of our Series A Convertible Preferred
Stock at a price of $.30 per share in a private placement to approximately
6
accredited investors for gross proceeds of $825,000. Each preferred share may
be
converted into 1.25 common shares. We intend to sell a maximum of 4,000,000
preferred shares. We entered into subscription agreements with each of the
purchasers, substantially in the form of Exhibit 99.1 attached hereto and
incorporated herein by reference. Each purchaser represented their intention
to
acquire the securities for their own account for investment purposes and not
with a view to the distribution thereof other than in accordance with applicable
law. Appropriate legends will be affixed to the stock certificates issued in
the
transaction. All purchasers either received or had access to adequate
information concerning the investment.
We
also
have granted registration rights to each of the purchasers, pursuant to which
the purchasers were granted customary demand registration rights, obligating
us
to file a registration statement covering the purchased shares within 45 days
of
the close of the offering.
On
April
25, 2008, we agreed to issue 23,700,000 shares of our common stock at a price
of
par value per share to various advisors and parties that were instrumental
in
the acquisition of the license agreement that is disclosed in Item 1.01, the
formation of the new business opportunity and individuals that would become
directors and management of the Company. These shares were conditionally issued
pending acquisition of the license, completion of the sale of a minimum of
$600,000 of gross from the sale of the Series A Convertible Preferred stock
and
the addition of additional directors and officers to effectively manage the
business. The last of these conditions occurred on July 21, 2008. Each purchaser
represented their intention to acquire the securities for their own account
for
investment purposes and not with a view to the distribution thereof other than
in accordance with applicable law. Appropriate legends will be affixed to the
stock certificates issued in the transaction. All purchasers either received
or
had access to adequate information concerning the investment.
Item
5.01 Changes
in Control of Registrant
On
July
21, 2008, Texas Atlantic Partners, LLC obtained control of our company by
acquiring 62.2% of our currently outstanding common stock, as set forth in
Item
3.02 above.
Barry
Van
Wie transferred 22,000,000 common shares at the time he resigned as an officer
and director of the Company to Rowland W. Day II, to be held pending a change
in
the business operations of the Company. Upon the acquisition of the license
and
those items discussed in Item 3.02 above, Mr. Day cancelled the 22,000,000
shares that were originally issued to Mr. Van Wie.
Item
5.02 Departures
of Directors or Principal Officers; Election of Directors; Appointment of
Principal
Officers
Effective
July 21, 2008, the board of directors appointed Denton Jones, Rusty Robertson
and Leonard Makowka to fill three vacancies on the board of directors. Rusty
Robertson was appointed as the Company’s President and Chief Operating officers
and Robert Salluzzo was appointed as Treasure and Interim Chief Financial
Officer. Rowland W. Day II has resigned as the Company’s Chief Financial
Officer. Mr. Day’s resignation as Chief Financial Officer was not the result of
any disagreement with the Company on any matter relating to the Company’s
operations, policies or practices.
Rusty
Robertson, 56 years of age, President, Chief Operating Officer and
Director.
Ms.
Robertson is a principal of the Robertson Schwartz Agency. Ms. Robertson
specializes in marketing, sales, forecasting, literary, advertising and public
relations. Advertising Age Magazine has honored Ms. Robertson as one of the
top
100 Marketers and Success Magazine featured Ms. Robertson and her company as
one
of Americas Super 8 companies.
Leonard
Makowka, M.D., Ph.D., FRCS(c), FACS, 53 years of age,
Director.
Dr.
Makowka was a distinguished clinical and transplantation surgeon and medical
researcher. Since his retirement he has pursued investment strategies and
business development in healthcare, life sciences, finance and other industry
sectors. Dr. Makowka is currently a Managing Director of ITF Global Partners,
an
international financial advisory, strategic planning and capital investment
company. Dr. Makowka is actively involved as an advisor to or member of the
Board of Directors of several companies, including Blue Shield of California,
Hollis Eden Pharmaceuticals and Kinemed.
Denton
Jones, 56 years of age, Director.
Mr.
Jones
has been a private investor for 30 years. He is the manager of Texas Atlantic
Partners, LLC, the holder of 14,550,000 shares of common stock. Mr. Jones is
a
director of WQN, Inc.
Robert
J. Salluzzo, 60 years of age, Treasurer and interim Chief Financial
Officer.
Mr.
Salluzzo has been the Chief Financial Officer of four public companies since
1997. Mr. Salluzzo is a Certified Public Accountant.
As
of the
date of this filing, there has not been any material plan, contract or
arrangement (whether or now written) to which Mr. Jones, Ms. Robertson or Dr.
Makowka is a party in connection with their appointment as a director or as
an
officer of our Company.
No
transactions occurred in the last two years to which the Company was a party
in
which Mr. Jones, Ms. Robertson or Dr. Makowka had or is to have a direct or
indirect material interest.
Item
5.03 Amendment
to Articles of Incorporation or Bylaws
The
Board
of Directors by unanimous written consent created a series of 5,000,000 shares
of Series A Convertible Preferred Stock, $.001 par value. The Series A
Convertible Preferred stock has liquidation rights, dividend rights, voting
rights and conversion rights. Each preferred share converts into 1.25 common
shares. A copy of the Certificate of Designation of Series A Convertible
Preferred stock is attached hereto as Exhibit 5.1.
Item
5.06 Change
in Shell Company Status
As
a
result of entering into a license agreement on June 30, 2008, we ceased being
a
shell company as described in Item 1.01.
Item
8.01 Other
Events
FORWARD
LOOKING STATEMENTS
Statements
included in this report are "forward-looking statements" within the meaning
of
the Safe Harbor provisions of the Private Securities Litigation Reform Act
of
1995 (the "1995 Reform Act"). Additional oral or written forward-looking
statements may be made by us from time to time and such statements may be
included in documents other than this report that are filed with the SEC. Such
forward-looking statements involve risks and uncertainties that could cause
results or outcomes to differ materially from those expressed in such
forward-looking statements. Forward-looking statements in this report and
elsewhere may include, without limitation, statements relating to our plans,
strategies, objectives, expectations, intentions and adequacy of resources
and
are intended to be made pursuant to the Safe Harbor provisions of the 1995
Reform Act.
The
Company - Overview
Promotions
on Wheels was incorporated on July 3, 2006. The Company has been a developmental
stage company with a principal business objective of offering live promotions
and marketing events utilizing unique custom built mobile displays. To date,
revenue has been minimal and the Company has incurred operational losses. The
Company intends to change the name of the Company in the near future to a name
that more accurately describes the nature of the Company’s new
business.
On
June
30, 2008, the Company entered into a License Agreement (“License”) with WQN,
Inc., a Texas corporation (“WQN”), which, in consideration for the sum of
$300,000 grants the Company the right to market and sell WQN’s WebSafety
software products. The License covers software products that have been developed
by WQN and are more particularly described below and grants the Company an
exclusive right for a period of 12 months to market and sell the software
products through the Home Shopping Network, QVC, Inc., CVS Pharmacy, WalMart,
and Walgreens and the non exclusive right to market and sell the software
products worldwide. The Company intends to rebrand the software with the name
“CYBERSAFETY” or other name to be selected by management that properly “brands”
the software, and market and sell the software products in the manner described
below. The Company has attracted a team of experienced, professional marketing
personnel to market the CYBERSAFETY product (See Item 5.02 above). Although
the
Company does not intend to employ full time employees on a day-to-day basis,
the
Company intends to pursue marketing and selling the CYBERSAFETY software through
consulting agreements between the Company and members of senior management.
The
Company has discontinued its existing business of offering live promotions
and
intends to dedicate its time and resources to marketing, selling and
distributing CYBERSAFETY software products. The License provides for the Company
to retain 65% of all revenue received from the sale of CYBERSAFETY software
and
to pay 35% of all revenue to the Licensor, WQN. The License Agreement requires
Licensor to provide Company technical and customer support and requires Licensor
to provide Company with all future updates of the software.
The
Company is a fully reporting public company and on the bulletin board under
the
symbol “POWO.”
All
the Company’s public filings are incorporated herein by reference and are
available for review at the Securities and Exchange Commission’s website,
www.sec.gov.
DESCRIPTION
OF CAPITAL STOCK
The
following is a description of the Company’s capital stock and certain provisions
of the Company’s certificate of incorporation and by-laws.
General
The
Company’s authorized capital stock consists of 70,000,000 shares of Common Stock
$.001 par value per share and 5,000,000 shares of Preferred Stock, $.001 par
value per share.
Preferred
Stock
The
holders of the Preferred Stock are entitled to, among other rights set forth
in
the “Certificate Of Designation Of Series A Convertible Preferred Stock of
Promotions On Wheels Holdings, Inc. (“Certificate Of Designation”), see Item
5.02 above, preferential rights upon liquidation of the Company and the right
at
any time to convert the Preferred Stock into Common Stock of the Company at
the
ratio of one share of Preferred Stock for one and one quarter (1¼) share of
Common Stock.
RISK
FACTORS
The
Company was organized during the 2006, is at an early stage of operation and
has
no substantial revenue. The Company has recently ceased its operations in order
to devote its full resources toward marketing, selling and distributing the
CYBERSAFETY software. The earliest date the Company anticipates receiving
revenue from sales of the CYBERSAFETY software is during the second half of
2008. The Company will need to generate significant revenues to overcome an
accumulated deficit and obtain profitability. The Company may never achieve
profitability. If revenues grow more slowly than anticipated, or if operating
expenses exceed expectations the Company’s business, results of operations, and
financial condition could be materially adversely affected.
THE
COMPANY HAS A LIMITED OPERATING HISTORY AND FACES SIGNIFICANT RISKS AND
CHALLENGES IN BUILDING THE BUSINESS
As
a
result of the Company’s limited operating history, to achieve profitability, the
Company must successfully and timely market and sell the CYBERSAFETY software.
Although the Company has very concrete and specific marketing and sales programs
to be implemented, the Company cannot guarantee the success of such programs
and
alternately, more expensive marketing and sales programs may need to be
implemented. Additionally, although the Company believes that a strong market
exists for the CYBERSAFETY software, the Company has conducted no scientific,
reliable market surveys but has only performed its own research and due
diligence to ascertain the security concerns of parents and others responsible
for the safety of children. A more scientific analysis could prove that no
market exists for the CYBERSAFETY software that the Company intends to market
and sell; or, if the market exits, the Company may not be able to reach the
market with the Company’s limited financial resources and marketing budget.
There can be no assurance that the Company will be able to successfully generate
revenues. The Company has no significant historical basis to assess how it
might
respond to competitive, economic, regulatory, or technological challenges.
The
Company’s business must be considered in light of the risks and uncertainties
frequently encountered by companies in the very early stages of development,
particularly companies that operate in new and rapidly developing industries
and
marketplaces. The Company’s failure to adequately address these risks and
uncertainties and rapidly respond to adverse developments as they occur could
materially impact the Company’s ability to achieve profitability and, if
profitability is achieved, to sustain a level of operations that will cause
profitability to be sustained. Although the Company intends to hire numerous
people to implement the business of the Company, there is no assurance that
the
Company will hire the right people or that future changes will not have to
be
made to find the right people to implement the Company’s business strategy.
There is no assurance that the Company’s business strategy or marketing plans
will achieve success.
THE
COMPANY’S RELIANCE ON THE CAPABILITIES OF THE CYBERSAFETY
SOFTWARE AND THE LICENSOR, WQN, INC.
The
Company is heavily dependent upon the capabilities of the CYBERSAFETY software
and of the ability of the Company’s Licensor, WQN, Inc., to provide technical
and other support of the software. The failure of the software to accomplish
the
objectives as represented will hamper if not destroy the Company’s marketing
efforts as will the failure or inability of WQN, Inc. to capably provide
technical support for the software.
COMPANY’S
RELIANCE UPON EXECUTIVES AND CONSULTANTS
The
Company’s success is highly dependent upon executive officers and key
consultants identified in this report for critical management decisions and
to
implement and pursue the Company’s business and marketing plan. A loss of any of
the executives or consultants through incapacity or for any other reason could
materially adversely impact the ability of the Company to complete its business
and marketing plan and would require the Company to seek the assistance of
other
qualified personnel who may not be available.
CHALLENGES
FROM COMPETITION
Although
the Company is unaware of an available product that contains all the
characteristics, features and capabilities of the CYBERSAFETY software, in
the
dynamic, ever changing field of technology, many companies of all sizes and
capabilities are constantly engaged in software development. With the notoriety
given to child molesters, pedophiles and others causing harm and sometimes
death
to children, a reasonable assumption is that many companies are currently
engaged in software development activities that will possess many of the
characteristics and capabilities possessed by CYBERSAFETY software. In the
event
another company successfully develops and markets a competitive product before
the Company can establish a significant presence in its target markets, the
Company may never be able to achieve a level of revenue to sustain the Company’s
operations. In addition, there will be inherent competition from the license
from WQN, as both the Company and WQN will be selling/licensing the same product
to consumers and retailers. There is no assurance that the Company’s marketing
and branding programs will be more efficient than those of WQN. Additionally,
other than to those sales outlets identified above, the Company’s License is
non-exclusive and WQN not only has the right to market and sell the software
under its WebSafety brand in competition with Company but also has the right
to
issue licenses to other parties that may be more capable of marketing and
selling the software than Company.
TECHNOLOGICAL
RISKS
The
Company risks the possibility that another company may develop a competing
product that has all the characteristics, and more, of the CYBERSAFETY software.
The
Company intends to engage numerous people to implement the business of the
Company. There is no assurance that the Company will engage the right people
or
that future changes will not have to be made to find the right people to
implement the Company’s business strategy.
There
is
no assurance that the Company’s business strategy or marketing plans will
achieve success.
TERRORIST
ATTACKS, CONTINUED WAR OR OTHER CIVIL DISTURBANCES COULD LEAD TO FURTHER
ECONOMIC INSTABILITY AND ADVERSELY AFFECT OUR BUSINESS
On
September 11, 2001, the United States was the target of terrorist attacks of
unprecedented scope. The United States is currently engaged in war with Iraq.
These attacks and this war have caused instability in the marketplace and
contributed to a downtown in the global economy. In the future, there may be
armed hostilities, continued war, further acts of terrorism and civil
disturbances in the United States or elsewhere, which may further contribute
to
economic instability in the United States. Additionally, such disturbances
could
have a material adverse effect on our business, financial condition and
operating results.
THE
COMPANY HAS NO PRESENT PLANS TO DECLARE OR PAY DIVIDENDS
The
Company has no present plans to declare or pay dividends and, unless the Company
achieves levels of profitability enabling the Company to overcome its negative
retained earnings and establish sufficient retained earnings enabling the
Company to prudently and legally pay dividends, the Company may never be
financially or legally capable of paying dividends. Conversely, as the Company
achieves profitability, the Company plans to reinvest the profits into the
Company’s business operations and the expense of developing additional products
and enhancing existing products. Accordingly, funds from which the Company
can
pay dividends and from which the Board of Directors will choose to pay dividends
will not be available within the reasonably foreseeable future.
Item
9.01 Exhibits
2.1 License
Agreement
5.1 Certificate
of Designation
99 Subscription
Agreement
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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PROMOTIONS
ON
WHEELS HOLDINGS, INC. |
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| Date:
July 21, 2008 |
By: |
/s/
Rowland W. Day II |
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Rowland
W. Day II, |
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Chief
Executive Officer |