Attached files
| file | filename |
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| EX-3.1 - CERTIFICATE OF DESIGNATION TO THE SERIES B CONVERTIBLE PREFERRED STOCK. - China Carbon Graphite Group, Inc. | f8k122209ex3_chinacarbon.htm |
| EX-99.1 - FORM OF SUBSCRIPTION AGREEMENT - China Carbon Graphite Group, Inc. | f8k122209ex99i_chinacarbon.htm |
| EX-99.5 - FORM OF WARRANT ISSUED TO THE INVESTORS - China Carbon Graphite Group, Inc. | f8k122209ex99v_chinacarbon.htm |
| EX-99.6 - WARRANT ISSUED TO MAXIM GROUP LLC - China Carbon Graphite Group, Inc. | f8k122209ex99vi_chinacarbon.htm |
| EX-99.4 - ESCROW AGREEMENT - China Carbon Graphite Group, Inc. | f8k122209ex99iv_chinacarbon.htm |
| EX-99.2 - REGISTRATION RIGHTS AGREEMENT - China Carbon Graphite Group, Inc. | f8k122209ex99ii_chinacarbon.htm |
| EX-99.7 - PRESS RELEASE - China Carbon Graphite Group, Inc. | f8k122209ex99vii_chinacarbon.htm |
| EX-99.3 - SECURITIES ESCROW AGREEMENT - China Carbon Graphite Group, Inc. | f8k122209ex99iii_chinacarbon.htm |
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): December 22, 2009
CHINA
CARBON GRAPHITE GROUP, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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333-114564
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98-0550699
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(State
or Other Jurisdiction
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(Commission
File
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(I.R.S.
Employer
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of
Incorporation)
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Number)
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Identification
Number)
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c/o
Xinghe Xingyong Carbon Co., Ltd.
787
Xicheng Wai
Chengguantown
Xinghe
County
Inner
Mongolia, China
Telephone:
(86) 474-7209723
(Address
of principal executive offices)
Copies
to:
Asher S.
Levitsky PC
Sichenzia
Ross Friedman Ference LLP
61
Broadway, 32nd
Floor
New York,
New York 10006
Phone:
(212) 981-6767
Fax:
(212) 930 - 9725
E-mail:
alevitsky@srff.com
(Former
name or former address, if changed since last report)
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.
Item
3.02. Unregistered Sales of Equity
Securities.
On December 22, 2009, China
Carbon Graphite Group, Inc., a Nevada corporation (the “Company”), sold in a
private placement a total of 2,160,500 shares of Series B Convertible Preferred
Stock and a five-year warrants to purchase 864,000 shares of common stock at an
exercise price of $1.30 per share, for an aggregate purchase price of
$2,592,600. The warrants have terms of five years and expire
December 22, 2014.
The
Company engaged Maxim Group LLC as exclusive placement agent for the private
placement. As consideration for Maxim’s services, the Company paid
Maxim $259,260 and issued Maxim a five-year warrant expiring to purchase 108,025
shares of common stock at an exercise price of $1.32 per share.
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Each
share of series B preferred stock is convertible into one share of common
stock, which reflects a conversion price of $1.20 per share, subject to
adjustment.
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The
Company pays an annual dividend of $0.072 per share of series B preferred
stock, which is payable in quarterly installments of $0.018 per
share.
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The
Company is required to redeem the series B preferred stock at a redemption
price of $1.20 per share plus accrued dividends on December 22, 2011 or
such earlier date as the Company is merged into another corporation or a
sale or other transfer of all or substantially all of the Company’s assets
in a transaction in which the proceeds of such sale are distributed to
shareholders.
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Prior
to the date on which the Company is required to redeem the series B
preferred stock, the Company may redeem any or all of the outstanding
series B preferred stock at a redemption price of $1.32 per
share.
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The
Company may not redeem the series B preferred stock if the underlying
shares are not registered under the Securities Act of 1933, as amended, or
eligible for sale without registration pursuant to Rule
144.
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Upon
any voluntary or involuntary liquidation, dissolution or winding-up, the
holders of the series B preferred stock are entitled to a preference of
$1.20 per share, before any distributions or payments may be made with
respect to the common stock or any other class or series of capital stock
which is junior to the series B preferred stock upon liquidation. The
series B preferred stock ranks on a parity with the Company’s outstanding
series A preferred stock with respect to dividends and on
liquidation.
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The
holders of the series B preferred stock have no voting
rights. However, so long as any shares of series B preferred
stock are outstanding, the Company shall not, without the affirmative
approval of the holders of a majority of the outstanding shares of series
B preferred stock then outstanding, (i) liquidate; (ii) effect a merger or
consolidation of the Corporation into another corporation or a sale,
lease, transfer or other disposition of all or substantially all of the
assets of the Corporation in a transaction in which the proceeds of such
sale are distributed to shareholders; (iii) alter or change
adversely the powers, preferences or rights given to the series B
preferred stock or alter or amend the certificate of designation relating
to the series B preferred stock, (iv) create or authorize the creation of
any convertible debt security if the Company’s aggregate convertible debt
would exceed $5,000,000 unless such debt is incurred in connection with an
acquisition or an expansion of the Company’s facilities, or (v) authorize
or create any class of stock ranking as to dividends or distribution of
assets upon a liquidation, dissolution or winding up senior to the Series
B Preferred Stock. The holders of the Series B Preferred Stock
will not be entitled to vote as a class with respect to the increase or
decrease in the number of authorized shares of Preferred
Stock.
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2
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While
the series B preferred stock is outstanding, except for excluded
issuances, if we issue common stock at a price or warrants or other
convertible securities at a conversion or exercise price which is less
than the conversion price then in effect, the conversion price shall be
adjusted on a formula basis.
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The
warrants issued to the investors are immediately exercisable and have a term of
five years. The Company has the right to redeem the warrants, on 20
trading days’ notice, for $0.01 per share of common stock issuable upon exercise
of the warrants if, for 20 trading days during any 30 trading day period, the
price of the common stock is greater than $2.60 per share. To the extent that
the warrants are not exercised by 5:30 PM, New York City time, on the date set
for redemption, the holders of the warrants will have no right under the warrant
other than to receive the $0.01 redemption price on presentation of his or her
warrant.
The
warrants issued to Maxim are the same as the warrants issued to the investors
except that the Maxim warrants are not exercisable until six months after
issuance, may be exercised on a cashless basis and are not subject to
redemption.
In
connection with the private placement and pursuant to the transaction
agreements:
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The
Company agreed to file a registration statement covering the shares of
common stock issuable upon conversion of the series B preferred stock or
upon exercise of the warrants issued to the investors and the placement
agent. The Company is to file the registration statement by
February 5, 2010 and have the registration statement declared effective by
June 21, 2010.
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The
Company deposited into escrow 1,080,250 shares of common stock, which are
to be held in escrow to be returned to the Company or delivered to the
investors, depending on whether the Company meets certain financial
performance targets for the years ending December 31, 2010 and December
31, 2011. The performance target for 2010 is net income, as
defined, of at least $5,100,000. The performance target for 2011 is net
income of at least $10,000,000. If the Company completes an
underwritten equity financing with gross proceeds in excess of $15,000,000
prior to August 31, 2010, the performance target for 2011 is net income of
at least $20,000,000. In determining net income, to the
extent that any excluded items are deducted in computing net income, there
shall be added back the amount of such excluded items. Excluded
items means: (i) any income tax, enterprise tax or similar tax in excess
of 25% of income before income taxes; and (ii) any items of expense or
deduction arising directly or indirectly from the private placement and
the transaction contemplated by the private
placement.
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Since the
series B preferred stock is on a parity with the outstanding series A
convertible preferred stock, the Company obtained the consent of the holders of
the series A preferred stock, for which the Company issued warrants to purchase
an aggregate of 200,000 shares at an exercise price of $1.30 per share. These
warrants bear the same terms and provisions as the warrants issued to the
investors in the private placement.
3
The
issuance of the series B preferred stock and warrants to the investors in the
private placement and the issuance of the warrants to the holders of the series
A preferred stock was exempt from registration under Section 4(2) of the
Securities Act and Rule 506 of the SEC thereunder. Each of the
investors is an “accredited investor,” as defined in Rule 501 of SEC under the
Securities Act, and acquired the Company’s common stock for investment purposes
for its own accounts and not with a view to the resale or distribution
thereof. The certificates for the series B preferred stock and the
warrants bear a restricted stock legend.
Item
7.01. Regulation FD Disclosure.
On
December 23, 2009, the Company issued a press release announcing private
placement and the issuance of shares of series B preferred stock and warrants
described in Items 1.01 and 3.02 above. A copy of the press release
is being filed as Exhibit 99.7 to this Form 8-K and is incorporated herein by
reference in its entirety.
In
accordance with General Instruction B.2 of Form 8-K, the information in Item
7.01 of this Current Report on Form 8-K, including Exhibit 99.7, shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liabilities of that
section, and shall not be deemed to be incorporated by reference into any of the
Company’s filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before or after the
date hereof and regardless of any general incorporation language in such
filings, except to the extent expressly set forth by specific reference in such
a filing.
Item
9.01 Financial Statements and
Exhibits.
(d) Exhibits.
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3.1
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Certificate
of Designation to the Series B Convertible Preferred
Stock.
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99.1
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Form
of subscription agreement, dated December 22, 2009, by and between China
Carbon Graphite Group, Inc. and the investors.
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99.2
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Registration
rights agreement, dated December 22, 2009, by and between China Carbon
Graphite Group, Inc., Maxim Group LLC, and the
investors.
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99.3
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Securities
escrow agreement, dated December 22, 2009, by and between China Carbon
Graphite Group, Inc., Maxim Group LLC, and the
investors.
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99.4
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Escrow
agreement, dated December 17, 2009, by and between China Carbon Graphite
Group, Inc., Maxim Group LLC, and the investors.
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99.5
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Form
of Warrant issued to the investors.
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99.6
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Warrant
issued to Maxim Group LLC.
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99.7
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Press
release dated December 23, 2009, issued by China Carbon Graphite Group,
Inc.
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4
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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CHINA
CARBON GRAPHITE GROUP, INC.
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(Registrant)
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Date:
December 28, 2009
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By:
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/s/
Donghai Yu
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Donghai
Yu
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Chief
Executive Officer
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