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): November 12, 2007
NETWORK
CN INC.
(Exact
name of registrant as specified in its charter)
000-30264
(Commission
File Number)
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Delaware
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11-3177042
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(State
or other jurisdiction
of
Incorporation)
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(I.R.S.
Employer
Identification
No.)
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21/F,
Chinachem Century Tower
178
Gloucester Road
Wanchai,
Hong
Kong
(Address
of principal executive offices)
(852)
2833-2186
(Registrant’s
telephone number, including area code)
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
1.01. Entry into a Material Definitive Agreement
(a)
Agreement with Guiding Media Advertising Limited
On
November 12, 2007 Shanghai Quo Advertising Company Limited (“Quo Advertising”),
NCN Media Services Limited (“NCN Media”),
wholly-owned
subsidiaries of Network CN Inc. (the "Company"), entered
into an agreement with Guiding Media Advertising Limited (“Guiding Media”), a
company organized under the laws of the People’s Republic of China (“PRC”)
pursuant to which Guilding Media granted Quo Advertising the exclusive agency
right to operate 98 freestanding multimedia advertisement light boxes (the
“Media”)
to be
situated in designated locations within Beijing International Airport in China
for a period of three years with annual fees to be paid by NCN Media on behalf
of Quo Advertising.
In
addition, NCN Media, on behalf of Quo Advertising, is obligated to pay all
electricity charges and screen material installation charges. During the term
of
the agreement, Quo Advertising is entitled to retain all business proceeds
generated from advertisement placements provided that NCN Media pays all fees
due to Guiding Media. Guiding Media is responsible for maintaining all required
licenses and approval of relevant authorities for the commercial operation
of
the Media.
The
agreement is subject to the laws of the People’s Republic of China and Quo
Advertising’s ability to publish advertisements is subject to applicable rules
and regulations in China regarding advertising.
The
foregoing description of the Contract is qualified in its entirety by reference
to the full text of the Contract, a copy of which is filed as Exhibit 10.1
to
this Current Report on Form 8-K.
(b)
Financing by Wei An Developments Limited
On
November
12, 2007, the Company entered into a Note and Warrant Purchase Agreement (the
“Purchase
Agreement”) with Wei
An
Developments Limited (“Wei An”) with respect to the purchase by Wei An a
six-month Convertible Promissory Note in the principal account of $5,000,000
at
the interest rate of 12% per annum (the “Note”). The Note is
convertible into the Company’s common stock at the conversion price of $2.40 per
share. Pursuant to the Note, the Company is subject to a commitment
fee of 2% of the principal amount of the Note. The term of the Note
is six months and the Company has the option to extend the Note by an additional
six-month period at an interest rate of 14% per annum and be subject to an
additional commitment fee of 2% of the principal amount of the Note. However,
the Company has the right to prepay all or any portion of the amounts due under
the Note at any time without penalty or premium.
In
addition, pursuant to the Purchase
Agreement, the Company issued Warrants to purchase up to 250,000 shares of
the
Company’s common stock at the exercise price of $2.30 per share (the
“Warrants”). The Warrants are exercisable for a period of two
years.
The
foregoing description of the
Purchase Agreement, Note and Warrants, is qualified in its entirety by reference
to the full text of such agreements and instruments, copies of which are filed
as Exhibits 10.2, 10.3, and 10.4 to this Current Report on Form 8-K and are
incorporated herein by reference.
ITEM
3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
On
November 12, 2007, under the
Purchase Agreement described under Item 1.01 above, the Company issued a
convertible promissory note in the principal amount of $5,000,000 and warrants
for the purchase
of 250,000 shares of common stock to an institutional accredited
investor. The Note and Warrants have the terms and conditions set
forth under Item 1.01 above.
The
foregoing issuances were made in
reliance upon the exemption provided in Section 4(2) of the Securities Act
and
the safe harbor of Rule 506 under Regulation D. Certificates representing such
securities contain restrictive legends preventing sale, transfer or other
disposition, unless registered under the Securities Act. The recipients of
such
securities received, or had access to, material information concerning our
company, including, but not limited to, our reports on Form 10-KSB, Form 10-QSB,
and Form 8-K, as filed with the SEC.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c)
Exhibits
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10.1
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Agreement
by and among Guiding Media Advertising Limited, NCN Media Services
Limited
and Shanghai Quo Advertising Company Limited dated November 12,
2007.
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10.2
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Note
and Warrant Purchase Agreement dated November 12, 2007 by and between
the
Company and Wei An Developments Limited.
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10.3
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Form
of Convertible Promissory Note
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10.4
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Form
of Warrant
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SIGNATURE
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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NETWORK
CN INC.
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By:
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/s/ Godfrey
Hui |
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Godfrey
Hui |
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Chief
Executive Officer |
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