UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date
of
Report (Date of earliest reported): May 25, 2007
(Exact
name of registrant as specified in charter)
Stronghold
Technologies, Inc.
(Former
name of registrant)
Nevada
|
333-54822
|
22-3762832
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
16801
Addison Road, Suite 310, Addison, Texas 75001
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code: (214) 866-0606
Copies
to:
Richard
Anslow, Esq.
Anslow
& Jaclin LLP
195
Route
9 South, Suite 204
Manalapan,
NJ 07726
Phone:
(732) 409-1212
Fax:
(732)
577-1188
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
240.14a-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 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
ITEM
1.01
|
ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT
|
On
May
25, 2007, we entered into a Securities Purchase Agreement (the "Securities
Purchase Agreement") with New Millennium Capital Partners II, LLC, AJW
Qualified
Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC (collectively,
the
"Investors"). Under the terms of the Securities Purchase Agreement, the
Investors purchased an aggregate of (i) $900,000 in callable convertible
secured
notes (the "Notes") and (ii) warrants to purchase 5,000,0000 shares of
our
common stock (the "Warrants").
Pursuant
to the Securities Purchase Agreement, the Investors will purchase the Notes
and
Warrants in six tranches as set forth below:
1. |
On
May 31, 2007, the Investors purchased Notes aggregating
$150,000.
|
2. |
On
the final business day of each of the five (5) months beginning
in June
2007 and ending in October 2007, the Investors shall purchase Notes
aggregating $150,000 each.
|
The
Notes
carry an interest rate of 8% and a maturity date of May 25, 2010. The notes
are
convertible into our common shares at the Variable Conversion Price (as
defined
hereafter). The Variable Conversion Price shall be equal to the Applicable
Percentage multiplied by the average of the lowest three (3) trading prices
for
our shares of common stock during the twenty (20) trading day period prior
to
conversion. The Applicable Percentage is between 50% and 60% depending
upon the
status of the registration statement to be filed by the Company.
At
our
option, we may prepay the Notes in the event that no event of default exists,
there are a sufficient number of shares available for conversion of the
Notes
and the Common Stock is trading below the Initial Market Price as adjusted.
In
addition, in the event that the average daily price of the common stock,
as
reported by the reporting service, for each day of the month ending on
a
determination date is below the Initial Market Price as adjusted, we may
prepay
a portion of the outstanding principal amount of the Notes equal to 104%
of the
principal amount hereof divided by thirty-six (36) plus one month’s interest.
Exercise of this option will stay all conversions for the following month.
The
full principal amount of the Notes is due upon default under the terms
of Notes.
In addition, the Company has granted the investors a security interest
in
substantially all of its assets and intellectual property, excluding Camelot
Studio Group and Camelot Film Group, as well as demand registration
rights.
We
simultaneously issued to the Investors seven year warrants to purchase
5,000,000
shares of our common stock at an exercise price of $.05.
The
Investors have contractually agreed to restrict their ability to convert
the
Notes and exercise the Warrants and receive shares of the Company's common
stock
such that the number of shares of the Company's common stock held by them
and
their affiliates after such conversion or exercise does not exceed 4.99%
of the
then issued and outstanding shares of the Company's common stock.
We
are
committed to registering the shares of common stock underlying the Notes.
We
have agreed to file the registration statement within thirty (30) days
from the
closing date of our agreement with the Investors otherwise we may be subject
to
penalty provisions. There are penalty provisions if the Company does not
use its
best efforts and respond to comments from the SEC regarding its Registration
Statement in a timely manner, or after the Registration Statement has been
declared effective by the SEC, sales of all of the Registrable Securities
cannot
be made pursuant to the Registration Statement due to the fault of the
Company.
ITEM
2.03
|
CREATION
OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE
SHEET ARRANGEMENT OF A
REGISTRANT
|
The
sale
of Notes described in Item 1.01 was completed on May 25, 2007. The Company
received $150,000 in gross proceeds from the Notes on May 31, 2007. At
the
closing, the company became obligated to the Investors for $150,000 in face
amount of the Notes. The Notes are a debt obligation arising other than
in the
ordinary course of business which constitute a direct financial obligation
of
us.
ITEM
3.02
|
UNREGISTERED
SALES OF EQUITY SECURITIES
|
The
Notes
and Warrants referenced in Item 1.01 were offered and sold to the Investors
in a
private placement transaction in reliance upon exemptions from registration
pursuant to Section 4(2) of the Securities Act of 1933 and Rule 506 of
Regulation D promulgated thereto. Each of the Investors is an accredited
investor as defined in Rule 501 of Regulation D under the Securities Act
of
1933.
Item
8.01
|
DEPARTURE
OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT
OF
PRINCIPAL OFFICERS
|
On
May
29, 2007, Steven Humphries, Chief Executive Officer and Chief Financial
Officer
of the DealerAdvance, Inc. (the “Company”), resigned as Chief Financial Officer.
Mr. Humphries will continue to serve as Chief Executive Officer of the
Company.
In
conjunction with Mr. Humphries’ resignation, the Company announced the
appointment of David Wange to serve as the Company’s Chief Financial Officer.
Mr. Wange’s appointment is effective May 29, 2007.
Before
joining the Company, Mr. Wange served seven years with American Express
Financial Advisors as a Business Financial Advisor. Most recently, Mr.
Wange has
spent the past four years serving as an independent consultant advising
companies on best practices for internal audit and Sarbanes Oxley Act
compliance. Mr. Wange holds a Bachelors of Science in Economics from Texas
A
& M University, a Masters of Science in Accounting from the University of
Texas, Dallas, a Masters of Arts in Biblical Studies from the Dallas Theological
Seminary, and is a Certified Public Accountant in the State of Texas.
A
press
release, dated May 29, 2007, announcing Mr. Wange’s appointment as Chief
Financial Officer, is attached as Exhibit 99.1 to this Current Report on
Form
8-K and is incorporated herein by reference.
Item
9.01 |
Financial
Statements and Exhibits |
|
|
Exhibit
No.
|
Description
|
4.1
|
Securities
Purchase Agreement dated by and among the Company and the
Investors
|
4.2
|
Form
of Callable Convertible Secured Note by and among the Company
and the
Investors
|
4.3
|
Form
of Stock Purchase Warrant by and among the Company and the
Investors
|
4.4
|
Registration
Rights Agreement by and among the Company and the
Investors
|
4.5
|
Security
Agreement by and among the Company and the Investors
|
4.6
|
Intellectual
Property Agreement by and among the Company and the
Investors
|
|
|
99.1
|
Press
release of DealerAdvance, Inc. dated May 30,
2007
|
_____________________________________________
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.
DEALERADVANCE
INC.
|
|
|
Date: June
1, 2007
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By:
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/s/Steven
Humphries
|
|
Name: Steven Humphries |
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Title:
Chief Executive Officer
|