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) February 9, 2010
ClearPoint
Business Resources, Inc.
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(Exact
name of registrant as specified in its charter)
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1600
Manor Drive, Suite 110, Chalfont, PA 18914
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(Address
of principal executive offices) (Zip Code)
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Registrant’s
telephone number, including area code (215)
997-7710
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(Former
name or former address, if changed since last
report)
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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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.04
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Triggering
Events That Accelerate or Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet
Arrangement.
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ClearPoint
Business Resources, Inc. (the “Company”) has previously disclosed in its reports
filed with the Securities and Exchange Commission that the Company entered into
an Amended and Restated Revolving Credit Agreement dated as of August 14, 2009
(the “Amended Loan Agreement”) with ComVest Capital, LLC (“ComVest”), pursuant
to which ComVest extended a secured revolving credit facility to the Company
with an initial maximum availability of $10.5 million. The Amended
Loan Agreement amended and restated the Revolving Credit and Term Loan
Agreement, dated as of June 20, 2008, as amended, between the Company and
ComVest (the “Original Loan Agreement”).
In
connection with the Amended Loan Agreement, the Company issued to ComVest an
Amended and Restated Warrant, dated August 14, 2009 (the “ComVest Warrant”), to
purchase, in the aggregate, 2,210,825 shares of the Company’s common stock,
$0.0001 par value per share (the “Common Stock”). Upon the occurrence
and during the continuation of certain events of default under the Amended Loan
Agreement, and upon five (5) business days’ notice to the Company, the ComVest
Warrant was exercisable for a number of shares of Common Stock that constituted
51% of the fully diluted Common Stock of the Company at the time of exercise (a
“Default Exercise”). The exercise price of the ComVest Warrant
related to the Default Exercise was $0.001 per share of Common
Stock.
On
February 9, 2010, the Company received a notice of default (the “Default
Notice”) from ComVest in connection with the Amended Loan
Agreement. The Company defaulted on its obligations under the Amended
Loan Agreement as a result of: (i) its failure to pay approximately $108,000 of
accrued interest which was due and payable on February 1, 2010; (ii) its failure
to pay a $60,000 installment of a certain modification fee which was due and
payable on January 1, 2010; and (iii) the entry of a judgment against the
Company related to the lawsuit filed by AICCO, Inc. and delivery of a judgment
note in favor of AICCO, Inc. in the amount of approximately $195,330. Pursuant
to a letter dated February 10, 2010, ComVest waived existing defaults under
the Amended Loan Agreement.
As a
consequence of such defaults, the Default Notice states that ComVest elected to
invoke the Default Exercise provision under the ComVest Warrant. As a
result, the Company is obligated to issue to ComVest 18,670,825 shares of Common
Stock (the “Default Exercise Shares”) and received approximately $18,671 from
ComVest as the exercise price of the ComVest Warrant. Such amount was
paid from ComVest’s working capital. In connection with this
transaction, effective February 16, 2010, ComVest owned 51% of the Company’s
fully diluted Common Stock and approximately 56.7% of outstanding shares of the
Company’s Common Stock.
The
Company is obligated to issue the Default Exercise Shares in reliance on the
exemption from the registration requirements of the Securities Act of 1933, as
amended (the “Securities Act”), under Section 4(2) of the Securities Act, based
upon a determination that the Default Exercise Shares will be issued to a
sophisticated investor who could fend for itself and who had access to
information about the Company and there was no general
solicitation.
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Item
3.02
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Unregistered
Sales of Equity Securities.
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The
disclosures set forth in Item 2.04 above relating to the issuance of the Default
Exercise Shares are incorporated by reference into this Item 3.02.
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Item
5.01
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Changes
in Control of Registrant.
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The
disclosures set forth in Item 2.04 above relating to the change in control of
the Company are incorporated by reference into this Item 5.01. The
disclosures set forth in Item 5.02 below relating to the changes in the
composition of the Board of Directors of the Company (the “Board”) are
incorporated by reference into this Item 5.01.
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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In
connection with the exercise of the ComVest Warrant, each of the following
members of the Board resigned effective February 16, 2010: Brendan
Calder, Dennis Cook, Parker Drew, Harry Glasspiegel, Vahan Kololian and Michael
Perrucci. Michael D. Traina, the Company’s Chief Executive Officer,
remains a director and Chairman of the Board. The Company reduced the
size of the Board to three directors.
The Board
appointed Gary E. Jaggard to serve as a Class B director of the Company
effective February 16, 2010 in connection with the exercise of the ComVest
Warrant. Mr. Jaggard serves as the Chief Executive
Officer of ComVest Capital Advisors, LLC, an affiliate of ComVest Group
Holdings, LLC and the Managing Director of ComVest, the Company’s senior
lender.
The Board
has not determined on which Board committees Mr. Jaggard will
serve. Information regarding Mr. Jaggard’s committee membership and
any material plan, contract or arrangement to be entered into between the
Company and Mr. Jaggard in connection with his election or any grant or award to
Mr. Jaggard under any such plan, contract or arrangement is not finalized at
this time. An amended Current Report on Form 8-K will be filed with the
Securities and Exchange Commission when such information becomes
available.
The third
director position currently remains vacant and the Board agreed to appoint
Robert O’Sullivan, Vice Chairman of ComVest Group Holdings, LLC, to serve as a
Class C director of the Company effective upon the Company’s compliance with
Rule 14f-1 promulgated under the Securities Exchange Act of 1934, as
amended.
As
discussed in Item 2.04 above, ComVest and the Company entered into the Original
Loan Agreement and the Amended Loan Agreement and the Company issued the ComVest
Warrant to ComVest. During the fiscal year ended December 31, 2008,
the Company paid ComVest an aggregate of approximately $1,345,990 and $384,190
in principal and interest, respectively, pursuant to the term loan, $530,000 and
$10,068 in principal and interest, respectively, pursuant to the revolving loan,
and $11,360 in fees under the Original Loan Agreement. During the
fiscal year ended December 31, 2009, the Company paid ComVest an aggregate of
approximately $535,961 and $427,136 in principal and interest, respectively,
pursuant to the term loan, $0 and $85,711 in principal and interest,
respectively, pursuant to the revolving loan, and $38,868 in fees under the
Original Loan Agreement. During the fiscal year ended December 31,
2009, the Company paid ComVest approximately $0 and $21,362 in principal and
interest, respectively, and $363 in fees pursuant to the Amended Loan
Agreement. During the period of January 1, 2010 through the date of
this Current Report on Form 8-K, the Company paid ComVest approximately $0 and
$30,264 in principal and interest, respectively, and $13,118 in fees pursuant to
the Amended Loan Agreement. Amounts outstanding under the Original
Loan Agreement bore interest at a rate of 7% and amounts outstanding under the
Amended Loan Agreement bore interest at a rate of 12% during such
periods. As of December 31, 2008, $7,654,010 was outstanding on the
term loan and $1,000,000 was outstanding on the revolving loan under the
Original Loan Agreement. As of December 31, 2009, $10,383,061 was
outstanding under the Amended Loan Agreement, in addition to interest and fees
of $857,941. As of the date of this Current Report on Form 8-K,
$10,495,952 was outstanding under the Amended Loan Agreement in addition to
approximately $1,007,516 in accrued interest and modification
fees. The largest amount outstanding under either loan agreement
since January 1, 2008 was $10,495,952, excluding accrued interest and
modification fees.
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Item
7.01.
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Regulation
FD Disclosure.
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On
February 16, 2010, the Company issued a press release announcing the
transactions disclosed in this Current Report on Form 8-K. A copy of
the press release is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
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Item
9.01
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Financial
Statements and Exhibits.
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Exhibit
No.
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Description
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99.1
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Press
Release dated February 16, 2010.
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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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CLEARPOINT
BUSINESS RESOURCES, INC.
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By:
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/s/
John G. Phillips
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Name:
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John
G. Phillips
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Title:
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Chief
Financial Officer
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Date: February
16, 2010
Exhibit
Index
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Exhibit
No.
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Description
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99.1
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Press
Release dated February 16, 2010.
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