Attached files
| file | filename |
|---|---|
| EX-10.5 - FORBEARANCE AGREEMENT - Omni Shrimp, Inc. | f8k120409ex10v_naturalnano.htm |
| EX-10.1 - FORM OF SUBSCRIPTION AGREEMENT - Omni Shrimp, Inc. | f8k120409ex10i_naturalnano.htm |
| EX-10.6 - FORBEARANCE AGREEMENT - Omni Shrimp, Inc. | f8k120409ex10vi_naturalnano.htm |
| EX-10.2 - FORM OF SUBORDINATED SECURED PROMISSORY NOTE - Omni Shrimp, Inc. | f8k120409ex10ii_naturalnano.htm |
| EX-10.4 - FORM OF SECURITY AGREEMENT - Omni Shrimp, Inc. | f8k120409ex10iv_naturalnano.htm |
| EX-10.8 - CONSENT AGREEMENT - Omni Shrimp, Inc. | f8k120409ex10viii_naturlnano.htm |
| EX-10.7 - FORBEARANCE AGREEMENT - Omni Shrimp, Inc. | f8k120409ex10vii_naturalnano.htm |
| EX-10.3 - FORM OF COMMON STOCK PURCHASE WARRANT - Omni Shrimp, Inc. | f8k120409ex10iii_naturalnano.htm |
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):
December
4, 2009
NaturalNano,
Inc.
(Exact
name of registrant as specified in its charter)
|
Nevada
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000-49901
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87-0646435
|
||
|
(State
or other jurisdiction
|
(Commission
File No.)
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(I.R.S.
Employer
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||
|
of
incorporation)
|
Identification
No.)
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15
Schoen Place
Pittsford,
New York 14534
(Address
of principal executive offices)
(585) 267-4850
(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):
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
December 4, 2009, NaturalNano, Inc. (the “Company”) received gross proceeds of
$225,000 pursuant to the terms of a subscription agreement (the “Subscription
Agreement”) dated as of November 30, 2009 with an accredited investor ( the
“Investor”). Pursuant to the terms of the Subscription Agreement the Company
issued to the Investor (i) a 10% Subordinated Secured Convertible
Promissory Note in the principal amount of $225,000 (the “Note”)
and (ii) a five-year common stock purchase warrant (the “Warrant”) to
purchase 45,000,000 shares, subject to adjustment as described in the Warrant
(the “Warrant Shares”), of the Company’s common stock, par value $0.001 per
share (the “Common Stock”) at an exercise price of $0.025 per share (the
“Offering”) for a purchase price of $225,000.
The Note
has a 15-month term, bears interest at 10% per annum and is secured by certain
assets of the Company pursuant to a security agreement, dated November 30, 2009
(the “Security Agreement”). The Note is convertible by the
Investor into Common Stock (“Conversion Shares”) at any time prior to
maturity (provided that such conversion does not result in the holder and its
affiliates beneficially owning in excess of 4.99% (9.99% upon 61 days’ prior
written notice) of the issued and outstanding Common Stock) at $0.005 per share
(the “Conversion Price”), subject to adjustment upon the occurrence of certain
events, including the issuance of Common Stock at less than the Conversion
Price. Interest under the Note is due quarterly in cash or if
registered, Common Stock at a 20% discount in accordance with a formula set
forth in the Note. The Note and security interest therein is
subordinate to certain outstanding indebtedness of the Company (“Senior Debt”)
held by Platinum Long Term Growth IV, LLC, Platinum Advisors LLC and Longview
Special Finance Inc. (“Senior Lenders”). Upon the occurrence of Events of
Default as set forth in the Note, the principal and interest due under the Note
may be accelerated and the interest rate payable may be increased to
18%.
The
Warrant provides for cashless exercise and contains full ratchet and other
anti-dilution provisions. The Warrant is convertible by the Investor
into Common Stock at any time during the term of the Warrant (provided that such
exercise does not result in the holder and its affiliates beneficially owning in
excess of 4.99% (9.99% upon 61 days’ prior written notice) of the issued and
outstanding Common Stock.
The
Subscription Agreement provides for mandatory redemption, at the Investor’s
election, by the Company of outstanding principal and interest under the Note,
if the Company (i) is prohibited from issuing Conversion Shares or Warrant
Shares, (ii) redeemed securities junior to the Note, or (iii) liquidated,
dissolved or wound-up, or, if an Event of Default (as defined in the Note and
Subscription Agreement) occurred which is not cured in 7 days. In
addition, upon a Change of Control (as defined in the Subscription Agreement),
the Company may be required, at the Investor’s election, to pay the Investor an
amount equal to the principal outstanding amount under the Note multiplied by
125%, plus unpaid interest.
If the
Investor is required to purchase Common Stock to deliver in
satisfaction of a sale which it was entitled to receive from the Company, then,
the Company will be required to pay the Investor an amount by which the
Investor’s total purchase price exceeds the principal and/or interest amount of
the Note or the Warrant for which such conversion or exercise, as the case may
be, was not timely honored, together with interest at the rate of 10% per annum,
accruing until such amount and any accrued interest is paid in
full.
So long
as the Note is outstanding, without the Investor’s consent, the Company is
subject to certain negative covenants, such as creating a lien or amending its
charter or bylaws, as described in the Subscription Agreement.
The
Conversion Shares and Warrant Shares have piggyback registration rights as
described in the Subscription Agreement.
Except
for certain excepted issuances, as described in the Subscription Agreement, if,
during the term of the Note, the Company consummates a new equity raising or
financing transaction as described in the Subscription Agreement, the Investor
has the right to exchange the Note for securities issued in such new
transaction.
The
Investor is entitled to liquidated damages of $100 per business day for each
$10,000 of principal under the Note for Conversion Shares or purchase price of
Warrant Shares or the Mandatory Redemption Amount that is not timely paid or
delivered or for Unlegended Shares (as defined in the Subscription Agreement)
not timely delivered. In addition, the company may be required to redeem the
Conversion Shares at a price per share equal to the greater of 120% or the
Unlegened Redemption Amount (assuch terms are defined in the Subscription
Agreement) for failure to deliver Unlegended Shares for 30 days in any 360 day
period.
Use of
proceeds from the Offering, after taking into account expenses related to the
Offering, including a $20,000 commitment fee paid to the Investor and $7,500
paid to the Investor’s counsel, will be used for general working capital
purposes, except that up to $40,000 may be used to retire outstanding
indebtedness incurred by the Company from October 15, 2009 to November 30,
2009.
The
issuances of the Note and Warrant were made pursuant to a private placement
under Section 4(2) of the Securities Act of 1933, as amended (the “Act”), and/or
Rule 506 of Regulation D promulgated under the Act, pursuant to the terms of the
Subscription Agreement.
Pursuant
to forbearance agreements, dated November 30, 2009 (the “Forbearance
Agreements”), with each of its current secured lenders (the “Senior Lenders”),
each such Senior Lender agreed to forbear from exercising its rights and
remedies under the Senior Debt and related loan documents until June 1, 2010,
unless earlier terminated in accordance with the Forbearance Agreements. During
the forbearance period, the Company agrees, among other things, not to make any
payment or concession to other lenders without the consent of the Senior
Lenders. The Senior Lenders have also agreed, pursuant to a consent
agreement with the Company, dated November 30, 2009 (the “Consent Agreement”),
to permit the Company to issue the Note, as junior debt.
For all
the terms and conditions of the Subscription Agreement, Note, Warrant, Security
Agreement, Forbearance Agreements and Consent Agreement, reference is hereby
made to such documents or the forms of such documents annexed hereto as Exhibits
10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 and 10.8, respectively. All
statements made herein concerning the foregoing are qualified by reference to
said Exhibits.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure
set forth above under Item 1.01 (Entry Into a Material Definitive Agreement) is
hereby incorporated by reference into this Item 2.03.
Item
3.02 Unregistered Sales of Equity Securities
The disclosure
set forth above under Item 1.01 (Entry Into a Material Definitive Agreement) is
hereby incorporated by reference into this Item 3.02.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
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Exhibit Number
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Description
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10.1
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Form
of Subscription Agreement
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10.2
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Form
of Subordinated Secured Promissory Note
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10.3
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Form
of Common Stock Purchase Warrant
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10.4
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Form
of Security Agreement
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10.5
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Forbearance
Agreement, dated November 30, 2009, between the Company and Platinum Long
Term Growth IV, LLC
|
|
10.6
|
Forbearance
Agreement, dated November 30, 2009, between the Company and Platinum
Advisors LLC
|
|
10.7
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Forbearance
Agreement, dated November 30, 2009, between the Company and Longview
Special Finance Inc.
|
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10.8
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Consent
Agreement, dated November 30, 2009, between the Company and Platinum Long
Term Growth IV, LLC, Platinum Advisors LLC and Longview Special Finance
Inc.
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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.
| NaturalNano, Inc. | |||
|
Date:
December 7, 2009
|
By:
|
/s/James Wemett | |
| James Wemett | |||
| Acting Chief Executive Officer | |||