UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 4, 2005
GLOBAL CONCEPTS, LTD.
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(Exact Name of Registrant as Specified in its Charter)
Colorado 0-25319 84-1191355
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(State of Incorporation) (Commission File (IRS Employer
Number) Identification No.)
501 Bloomfield Ave., Montclair, NJ 07042
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(Address of principal executive offices)
(973) 233-1233
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Registrant's Telephone Number
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 communication 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 2.03 Creation of a Direct Financial Obligation
Item 1.01 Entry into a Material Definitive Agreement
On August 4, 2005 Global Concepts sold to Cornell Capital Partners,
LP a Secured Convertible Debenture, dated August 1, 2005. The Debenture is
in the principal amount of $2,500,000 and bears interest at 12% per annum.
In exchange for the Debenture, Cornell Capital Partners paid $900,000 and
surrendered a $1,500,000 Promissory Note issued by Global Concepts to Cornell
Capital Partners in January 2005.
The Secured Convertible Debenture provides that Global Concepts
will commence making payments of principal and accrued interest on the
earlier of (a) the date when the Securities and Exchange Commission
declares effective a prospectus that will permit Cornell Capital Partners
to resell shares it acquires on conversion of the Debenture or (b)
January 1, 2006. Payments will be made in equal monthly installments
through February 1, 2007. Cornell Capital Partners is entitled to
convert the debenture into common stock at a price of $.20 per share.
However, in the event that Global Concepts commits a material default in
its obligations under the Debenture and related documents, the conversion
price will be reduced to $.06 per share. Cornell Capital Partners' right
to convert the Debenture is limited, however, to the extent that it
cannot convert the Debenture into an amount of shares that would cause it
to own more than 4.9% of Global Concepts' outstanding shares. Global
Concepts' obligations under the Debenture are secured by a pledge of all
of Global Concepts' assets.
The Secured Convertible Debenture has a stated interest of 12%.
However, since Cornell Capital Partners paid only $1,800,000 in aggregate
cash to acquire the note, the actual interest rate will exceed 36%.
In consideration for Cornell Capital Partner's purchase of the
Secured Convertible Debenture, Global Concepts issued to Cornell Capital
Partners a Warrant to purchase up to 5,000,000 shares of common stock at
$.25 per share. The Warrant has a term of three years. The Warrant
cannot be exercised to purchase shares which would cause Cornell Capital
Partners to own in excess of 4.99% of Global Concepts' outstanding
shares.
On August 4, 2005 Cornell Capital Partners and Global Concepts also
signed a Standby Equity Distribution Agreement dated August 1, 2005. The
Agreement provides that during a two years period Global Concepts may demand
that Cornell Capital Partners purchase shares of common stock from Global
Concepts. Global Concepts may make a demand no more than once every five
trading days. The maximum purchase price on each demand is $250,000. The
aggregate maximum that Global Concepts may demand from Cornell Capital
Partners is $5,000,000. The number of shares that Cornell Capital
Partners will purchase after a demand will be determined by dividing the
dollar amount demanded by a per share price. The per share price used
will be 95% of the lowest daily volume-weighted average price during the
five trading days that follow the date a demand is made by Global
Concepts. Cornell Capital Partners is required by the Agreement to pay
each amount demanded by Global Concepts, unless (a) there is no
prospectus available for Cornell Capital Partners to use in reselling the
shares, (b) the purchase would result in Cornell Capital Partners owning
over 9.9% of Global Concepts outstanding shares, or (c) the
representations made by Global Concepts in the Agreement prove to be
untrue. Accordingly, Global Concepts will not be able to obtain funds
under this arrangement until the Securities and Exchange Commission
declares effective a registration statement that will permit Cornell
Capital Partners to resell to the public the shares it acquires from
Global Concepts.
Item 9.01 Financial Statements and Exhibits
Exhibits
10-a Securities Purchase Agreement dated August 1, 2005 between Global
Concepts and Cornell Capital Partners, LP.
10-b Secured Convertible Debenture dated August 1, 2005 issued to
Cornell Capital Partners LP.
10-c Security Agreement dated August 1, 2005 between Global Concepts and
Cornell Capital Partners, LP.
10-d Warrant to Purchase Common Stock dated August 1, 2005 issued to
Cornell Capital Partners LP.
10-e Standby Equity Distribution Agreement dated August 1, 2005 between
Global Concepts and Cornell Capital Partners, LP.
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.
GLOBAL CONCEPTS, LTD.
Dated: August 8, 2005 By: /s/ Eduardo Rodriguez
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Eduardo Rodriguez
Chief Executive Officer