SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
EpicEdge, Inc.
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(Name of Issuer)
Common Stock, Par Value $.01 Per Share
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(Title of Class of Securities)
539577304
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(CUSIP Number)
Michael A. Nemeroff, Esq.
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, IL 60601-1003
(312) 609-7500
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 11, 2002
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
|_|
(Page 1 of 11 Pages)
SCHEDULE 13D
CUSIP No. 539577304 Page 2 of 11 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Edgewater Private Equity Fund III, L.P.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
00
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 33,077,207
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 21,431,656
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
33,077,207
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
88.9%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
PN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
CUSIP No. 539577304 Page 3 of 11 Pages
This Amendment No. 2 ("Amendment No. 2") further amends the statement
on Schedule 13D dated February 21, 2002 (the "Initial Schedule 13D"), as amended
by that certain Amendment No. 1 dated April 16, 2002 (the "Amendment No. 1"),
and is being filed with the Securities and Exchange Commission (the "SEC") by
Edgewater Private Equity Fund III, L.P., a Delaware limited partnership
("Edgewater" or the "Reporting Person"), in accordance with the requirements of
Rule 13d-1 promulgated by the SEC under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The purpose of this Amendment No. 2 is to reflect
changes in the beneficial ownership of the Reporting Person since the filing of
Amendment No. 1 to the Initial Schedule 13D as a result of the conversion of
debt held by the Reporting Person into equity securities of EpicEdge Inc., a
Texas corporation (the "Issuer").
The Reporting Person is a member of group consisting of Fleck T.I.M.E.
Fund LP, a Delaware limited partnership ("TIME"), Fleck T.I.M.E. Overseas Fund,
Ltd., a Caymen Islands limited liability company ("Overseas") and certain
shareholders of the Issuer. The Reporting Person has provided information in
this Amendment No. 2 with respect to itself and certain other members of the
group. Information provided herein by the Reporting Person with respect to such
members of the group is based solely on information last known to the Reporting
Person and the Reporting Person is not responsible for the completeness or
accuracy of such information. This Amendment No. 2 is being filed in conjunction
with the other Schedule 13Ds to be filed by the other members of the group to
which the Reporting Person is a member.
Item 1. Security and Issuer.
-------------------
This statement relates to the common stock, par value $0.01 per share
(the "Common Stock") of the Issuer. The principal executive offices of the
Issuer are located at 5508 Hwy. 290 West, Suite 300, Austin, Texas 78735.
Item 2. Identity and Background.
-----------------------
Edgewater Private Equity Fund III, L.P., a Delaware limited
partnership, having its principal executive offices at 900 North Michigan
Avenue, 14th Floor, Chicago, Illinois 60611. The general partner of Edgewater is
Edgewater III Management, L.P., a Delaware limited partnership ("Edgewater
Management"), having its principal executive offices at 900 North Michigan
Avenue, 14th Floor, Chicago, Illinois 60611. The general partner of Edgewater
Management is Gordon Management, Inc., an Iowa corporation ("Gordon"), having
its principal executive offices at 900 North Michigan Avenue, 14th Floor,
Chicago, Illinois 60611. The names, positions and principal business addresses
of each of the directors and executive officers of Gordon are as follows:
Name Position with Gordon Principal Business Address
---- -------------------- --------------------------
James A. Gordon President and Sole Director 900 North Michigan Avenue,
14th Floor,
Chicago, Illinois 60611
Edgewater is principally engaged in the business of investing and
holding securities in various entities. Edgewater Management is principally
engaged in the business of acting as general partner of Edgewater and investing
and holding securities in various entities. Gordon is
SCHEDULE 13D
CUSIP No. 539577304 Page 4 of 11 Pages
principally engaged in the business of acting as general partner of Edgewater
Management and investing and holding securities in various entities.
During the last five years, neither the Reporting Person nor, to the
best of its knowledge, any general partner, director or executive officer of the
Reporting Person, has been (i) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
In February 2000, (a) Edgewater acquired 1,200,000 shares of Common
Stock from the Issuer in a private transaction for the total consideration of
$6,000,000, and (b) TIME acquired 400,000 shares of Common Stock from the Issuer
in a private transaction for the total consideration of $2,000,000. In March
2000, TIME transferred 8,000 shares of Common Stock of the Issuer to Overseas.
In September 2000, (a) Edgewater acquired an additional 1,250,000 shares of
Common Stock from the Issuer in a private transaction for the total
consideration of $1,250,000, and (b) TIME acquired an additional 750,000 shares
of Common Stock from the Issuer in a private transaction for the total
consideration of $750,000. In September 2000, TIME transferred 30,000 shares of
Common Stock of the Issuer to Overseas. The above described purchases were
effectuated pursuant to two separate purchase agreements among the Issuer,
Edgewater, TIME and certain other investors (the "Purchase Agreements").
In July 2000, (a) Edgewater acquired a convertible promissory note from
the Issuer in a private transaction for the total consideration of $3,750,000,
and (b) TIME acquired a convertible promissory note from the Issuer in a private
transaction for the total consideration of $1,250,000 (collectively, the "July
Debt"), pursuant to a loan agreement by and among the Issuer, Edgewater and
TIME. The July Debt, plus accrued interest thereon, was previously convertible
into Common Stock of the Issuer at a price per share equal to $5.00.
On December 1, 2000, TIME acquired a convertible promissory note from
the Issuer in a private transaction for the total consideration of $1,000,000
(the "December Debt"; and, together with the July Debt, the "Old Debt"). The
December Debt, plus accrued interest thereon, was previously convertible into
Common Stock of the Issuer at a price per share equal to $0.50.
In June 2001, TIME loaned the Issuer an additional $400,000 in a
private transaction (the "June Debt"). This loan was made pursuant to the terms
of a certain Memorandum of Terms dated as of June 21, 2001. The Memorandum of
Terms provided that such loan was convertible into shares of preferred stock of
the Issuer at $0.75 per share. Such loan was never evidenced by a promissory
note. Furthermore, prior to the date of this Statement, the Memorandum of Terms
has been terminated by the parties thereto.
In February 2002, Edgewater loaned the Issuer an aggregate principal
amount of $610,000 in exchange for a secured promissory note. In March 2002,
Edgewater loaned the Issuer an additional aggregate principal amount of $250,000
in exchange for a substitute secured promissory note in the aggregate principal
amount of $860,000 (the "March Debt").
SCHEDULE 13D
CUSIP No. 539577304 Page 5 of 11 Pages
On April 16, 2002, the Issuer, Edgewater, TIME and certain other
parties named therein entered into a Note and Preferred Stock Purchase Agreement
(as amended, the "April Purchase Agreement"), pursuant to which Edgewater loaned
the Issuer an additional aggregate principal amount of $740,000 (the "April 16
Debt"). On April 29, 2002, Edgewater loaned the Issuer an additional aggregate
principal amount of $500,000 pursuant to an amendment to the April Purchase
Agreement (the "April 29 Debt"). On August 21, 2002, Edgewater loaned the Issuer
an additional aggregate principal amount of $500,000 pursuant to an amendment to
the April Purchase Agreement (the "August 21 Debt"). On October 22, 2002,
Edgewater loaned the Issuer an additional aggregate principal amount of $250,000
pursuant to an amendment to the April Purchase Agreement (the "October 22
Debt"). On November 1, 2002, Edgewater loaned the Issuer an additional aggregate
principal amount of $250,000 pursuant to an amendment to the April Purchase
Agreement (the "November 1 Debt," and together with the March Debt, the April 16
Debt, the April 29 Debt, the August 21 Debt and the October 22 Debt, the "New
Debt"). In addition, pursuant to the terms of the April Purchase Agreement, as
amended, the parties thereto agreed (a) to amend the terms of the Old Debt, such
that the Old Debt, plus accrued interest thereon, shall be convertible in shares
of Series A Convertible Preferred Stock (the "Series A Stock") of the Issuer at
a price per share equal to $0.75, upon the satisfaction or waiver of certain
conditions set forth in the April Purchase Agreement, as amended, which
conditions include the receipt of shareholder approval of an amendment to the
Issuer's Articles of Incorporation (the "Conditions"), and (b) that, other than
$2,000,000 of the New Debt (the "Edgewater Special Debt"), the June Debt and the
New Debt shall be convertible into shares of Series B Convertible Preferred
Stock (the "Series B Stock") of the Issuer at a price per share equal to $0.75,
upon the satisfaction or waiver of the Conditions (the "Financing"). The Series
A Stock is immediately convertible into shares of Common Stock of the Issuer on
a one-for-one basis, subject to certain antidilution adjustments. The Series B
Stock is immediately convertible into shares of Common Stock of the Issuer on a
three-for-one basis, subject to certain antidilution adjustments; provided,
however, such securities will be convertible into shares of Common Stock of the
Issuer on a one-for-one basis if the holder thereof elects to receive the
liquidating preference of the Series B Stock upon a liquidation event of the
Issuer.
On July 12, 2002, the requisite number of shareholders of the Issuer
approved the Financing and the amendments to the Issuer's Articles of
Incorporation authorizing the Series A Stock and the Series B Stock. On November
11, 2002, (a) Edgewater and TIME converted the Old Debt into the number of
shares of Series A Stock set forth opposite their respective names on Schedule 1
attached hereto, and (b) Edgewater converted the New Debt, other than the
Edgewater Special Debt, and TIME converted the June Debt into the number of
shares of Series B Stock set forth opposite their respective names on Schedule 1
attached hereto.
Each of Edgewater, TIME and Overseas, as the case may be, acquired the
shares of Common Stock, Series A Stock, Series B Stock, the Old Debt, the June
Debt and the New Debt (collectively, the "Securities") described above with
funds invested by its general and limited partners for the purpose of acquiring
equity securities.
Item 4. Purpose of Transaction.
----------------------
The Reporting Person acquired the Securities for investment purposes.
The Purchase Agreements and the April Purchase Agreement contain certain
provisions restricting the ability of the Issuer to effect a merger,
consolidation, reorganization, sale of assets or sale of a
SCHEDULE 13D
CUSIP No. 539577304 Page 6 of 11 Pages
controlling ownership interest without the consent of certain of the Reporting
Person. In addition, in connection with the acquisition of the Securities,
Edgewater, TIME and certain other shareholders of the Issuer entered into an
Amended and Restated Shareholders' Agreement (the "Shareholder Agreement")
pursuant to which each shareholder a party thereto agreed to vote their shares
to elect two (2) persons to the Board of Directors of the Issuer, one (1) of
whom to be designated by Edgewater and the other to be designated by Edgewater
and TIME.
In addition, Edgewater, TIME and certain shareholders of the Issuer
entered into a Voting Agreement (the "Voting Agreement"), pursuant to which such
shareholders have agreed to vote their shares (a) to elect the Board of
Directors of the Issuer as follows: (i) two (2) persons to be designated by
Edgewater (the "Series B Representatives"); (ii) one (1) person designated by
TIME (the "July Representative"); (iii) the current Chief Executive Officer of
the Issuer ("CEO"); (iv) one (1) person designated by the CEO (the "CEO
Representative"); and (v) three (3) persons designated by mutual agreement of
the July Representative, the Series B Representatives and the CEO, all of whom
shall be independent outside directors, and (b) to approve all actions required
to approve the Financing and the conversion of the Old Debt, the New Debt and
the June Debt into shares of Series A Stock and Series B Stock, as applicable.
Certain of the shareholders who are a party to the Voting Agreement have
executed an irrevocable proxy (an "Irrevocable Proxy") in favor of Edgewater to
vote their shares in accordance with the terms of the Voting Agreement.
On April 16, 2002, Edgewater and the Issuer entered into a letter
agreement (the "April 16, 2002 Letter Agreement") whereby, subject to certain
conditions, Edgewater committed to loan the Issuer an additional $1,360,000 of
convertible secured debt less the amounts of any debt or equity financing
received by the Issuer from third parties subsequent to April 16, 2002 (the
"Additional Debt"), and such Additional Debt was to be convertible into shares
of a newly created series of preferred stock of the Issuer at a conversion rate
of $0.25 per share. Subsequent to April 16, 2002, Edgewater loaned the Issuer an
additional $1,500,000; provided, however, that the Issuer and Edgewater agreed
that such additional indebtedness be funded pursuant to the terms of the April
Purchase Agreement and be deemed to be part of the Edgewater Special Debt in
lieu of being funded pursuant to the terms of the April 16, 2002 Letter
Agreement. Furthermore, on October 22, 2002, Edgewater and Issuer reached a
tentative agreement whereby in lieu of converting the Edgewater Special Debt in
accordance with the April Purchase Agreement, the Edgewater Special Debt would
be convertible into shares of a to-be-designated senior Series B-1 Convertible
Preferred Stock (the "Series B-1 Stock") at a price per share equal to $0.75
(the "Series B-1 Conversion"). The terms and conditions of the Series B-1 Stock
and the Series B-1 Conversion are still subject to the negotiation of definitive
agreements. If the parties are unable to negotiate final documentation with
respect to the Series B-1 Conversion, the Edgewater Special Debt will continue
to be convertible into Series B Stock pursuant to the April Purchase Agreement.
Also, on November 1, 2002, the Issuer and Edgewater entered into a
letter agreement whereby in consideration for the funding of the October 22 Debt
and the November 1 Debt the Issuer agreed to issue to Edgewater, upon the
consummation of the Series B-1 Conversion, a warrant to purchase $1,000,000
worth of Series B-1 Convertible Preferred Stock.
Except as otherwise set forth in this Item 4, the Reporting Person does
not propose any of the following:
SCHEDULE 13D
CUSIP No. 539577304 Page 7 of 11 Pages
(a) The acquisition by any person of additional securities of
the Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) A sale or transfer of a material part of the assets of the
Issuer or any of its subsidiaries;
(d) Any change to the present board of directors or management
of the Issuer, including plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or
dividend policy of the Issuer;
(f) Any other material change in the Issuer's business or
corporate structure, including, but not limited to, if the Issuer is a
registered closed-end investment company, any plans or proposals to
make any changes in its investment policy for which a vote is required
by Section 13 of the Investment Company Act of 1940;
(g) Changes in the Issuer's charter, by-laws or instruments
corresponding thereto or other actions which may impede the acquisition
of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national
securities association;
(i) A class of equity securities of the Issuer becoming
eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Act of 1933; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in the Securities of the Issuer.
----------------------------------------
(a) and (b)
As of the date of this Statement, Edgewater was deemed to
beneficially own an aggregate of 33,077,207 shares of Common
Stock of the Issuer, which includes 6,113,611 shares of Common
Stock into which the Series A Stock held by Edgewater is
immediately convertible, 12,868,044 shares of Common Stock
into which the Series B Stock held by Edgewater is immediately
convertible, which beneficial ownership currently represents
88.9% of the 37,181,988 shares of outstanding Common Stock on
an as-converted basis.1 The number of shares deemed to be
beneficially owned also includes the 11,645,551 shares of
Common Stock (the "Proxy Shares") with respect to which
Edgewater
---------------------
1 This number represents 18,200,333 shares of outstanding Common Stock
(based upon the number of outstanding shares of Common Stock provided
to Edgewater by the Issuer on November 11, 2002), plus the 18,981,655
shares of Common Stock into which the Series A Stock, the Series B
Stock and the Edgewater Special Debt held by Edgewater is currently
convertible into.
SCHEDULE 13D
CUSIP No. 539577304 Page 8 of 11 Pages
has sole voting power as a result of the Irrevocable Proxies
granted to it pursuant to the Voting Agreement. Edgewater does
not have the right to vote the Proxy Shares on matters other
than those set forth in the Voting Agreement and Irrevocable
Proxies and does not share voting power with respect to any
other shares which it beneficially owns. Edgewater does not
have any power to dispose or direct the disposition of the
Proxy Shares. Consequently, Edgewater has (i) the power to
vote or direct the vote of 33,077,207 shares of Common Stock
and (ii) the power to dispose or direct the disposition of
21,431,656 shares of Common Stock, subject to federal and
state securities laws.
To the best knowledge of Edgewater, none of the other persons
or entities listed in Item 2 beneficially owns any other
shares of the Issuer.
(c) See Item 3 above.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
-------------------------------------------------------------
Other than the agreements and the understandings discussed in Items 3
and 4 above, neither the Reporting Person nor any general partner, director or
executive officer of the Reporting Person has any contracts, arrangements,
understandings or relationships (legal or otherwise) with any person with
respect to the Securities, including transfer or voting thereof, finder's fees,
joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
--------------------------------
1. Stock Purchase Agreement dated as of February 18, 2000, by and among
the Issuer, Edgewater, TIME and certain other investors (incorporated
by reference to Exhibit 4.1 to the Issuer's Form 8-K (File No. 0-9129)
filed with the SEC on February 28, 2000).
2. Stock Purchase Agreement dated as of September 29, 2000, by and among
the Issuer, Edgewater, TIME and certain other investors (incorporated
by reference to Exhibit 99.2 to the Issuer's Form 8-K (File No. 0-9129)
filed with the SEC on October 16, 2000).
3. Convertible Bridge Loan Agreement dated as of July 21, 2000, by and
among the Issuer, Edgewater and TIME (incorporated by reference to
Exhibit 10.27 to the Issuer's Quarterly Report on Form 10-QSB (File No.
0-9129) filed with the SEC on November 11, 2000).
4. Amended and Restated Shareholder Agreement dated as of July 21, 2000,
by and among the Issuer, Edgewater, TIME and certain other shareholders
(incorporated
SCHEDULE 13D
CUSIP No. 539577304 Page 9 of 11 Pages
by reference to Exhibit 4 to the Schedule 13D filed by Edgewater, TIME
and Overseas on February 21, 2002 with the SEC).
5. Note and Preferred Stock Purchase Agreement dated as of April 16, 2002,
by and among the Issuer, Edgewater, TIME and certain other parties
named therein (incorporated by reference to Exhibit 4.27 to the
Issuer's Annual Report on Form 10-K (File No. 001-15493) filed with the
SEC on April 17, 2002).
6. Voting Agreement dated as of April 16, 2002, by and among Edgewater,
TIME and certain other shareholders of the Issuer (incorporated by
reference to Exhibit 4.40 to the Issuer's Annual Report on Form 10-K
(File No. 001-15493) filed with the SEC on April 17, 2002).
7. Letter Agreement dated as of April 16, 2002 by and between Edgewater
and the Issuer (incorporated by reference to Exhibit 7 to Amendment No.
1 to Schedule 13D filed by Edgewater, TIME and Overseas on May 1, 2002
with the SEC).
8. Letter Agreement dated as of November 1, 2002 by and between Edgewater
and the Issuer.
9. Amendment No. 1 to The Note and Preferred Stock Purchase Agreement,
dated April 29, 2002, by and between the Issuer and Edgewater.
10. Amendment No. 2 to The Note and Preferred Stock Purchase Agreement,
dated June 14, 2002, by and between the Issuer and Edgewater.
11. Amendment No. 3 to The Note and Preferred Stock Purchase Agreement,
dated July 18, 2002, by and between the Issuer and Edgewater.
12. Amendment No. 4 to The Note and Preferred Stock Purchase Agreement,
effective July 31, 2002, by and between the Issuer and Edgewater.
13. Amendment No. 5 to The Note and Preferred Stock Purchase Agreement,
effective August 21, 2002, by and between the Issuer and Edgewater.
14. Amendment No. 6 to The Note and Preferred Stock Purchase Agreement,
effective October 22, 2002, by and between the Issuer and Edgewater.
15. Amendment No. 7 to The Note and Preferred Stock Purchase Agreement,
effective November 1, 2002, by and between the Issuer and Edgewater.
SCHEDULE 13D
CUSIP No. 539577304 Page 10 of 11 Pages
SIGNATURES
----------
After reasonable inquiry and to the best of my knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement with respect to it is true, complete and correct.
Date: November 13, 2002
By: /s/ James A. Gordon
------------------------------------
James A. Gordon
President of Gordon Management, Inc.,
General Partner to Edgewater III
Management, L.P., which is the General
Partner of Edgewater Private Equity Fund
III, L.P.
SCHEDULE 13D
CUSIP No. 539577304 Page 11 of 11 Pages
SCHEDULE 1
REPORTING PERSON DEBT SERIES A STOCK SERIES B STOCK COMMON STOCK1
------------------------- ---------------------- ----------------------- ---------------------- -------------
Edgewater July Debt 6,113,611 N/A 6,113,611
------------------------- ---------------------- ----------------------- ---------------------- -------------
Edgewater New Debt2 N/A 1,622,681 4,868,044
------------------------- ---------------------- ----------------------- ---------------------- -------------
TIME July Debt 2,037,870 N/A 2,037,870
------------------------- ---------------------- ----------------------- ---------------------- -------------
TIME December Debt 1,544,000 N/A 1,544,000
------------------------- ---------------------- ----------------------- ---------------------- -------------
TIME June Debt N/A 593,185 1,779,556
------------------------- ---------------------- ----------------------- ---------------------- -------------
---------------------
1 The number of shares of Common Stock into which such Series A Stock or
Series B Stock is initially convertible.
2 Excluding the Edgewater Special Debt. Currently, the Edgewater Special
Debt is immediately convertible into 2,666,667 shares of Series B Stock
which, in turn, is immediately convertible into 8,000,000 shares of
Common Stock.