Attached files
| file | filename |
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| EX-4.1 - EMERALD DAIRY INC | v170843_ex4-1.htm |
| EX-4.2 - EMERALD DAIRY INC | v170843_ex4-2.htm |
| EX-10.1 - EMERALD DAIRY INC | v170843_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
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Date
of report (Date of earliest event reported):
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December 31,
2009
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EMERALD
DAIRY INC.
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(Exact
Name of Registrant as Specified in
Charter)
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Nevada
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000-52174
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80-0137632
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(State
or Other Jurisdiction
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(Commission
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(IRS
Employer
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of
Incorporation)
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File
Number)
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Identification
No.)
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11990
Market Street, Suite 205
Reston,
Virginia 20190
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(Address
of Principal Executive Offices)
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Registrant's
telephone number, including area code:
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(703)
867-9247
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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:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ 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.
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Entry
into a Material Definitive
Agreement.
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Second
Amendment to Promissory Notes and Grant of Additional Warrants
As of
December 31, 2009, Emerald Dairy, Inc. (the “Company”) and the investors
(“Investors”) in the Company’s June 2008 private placement (the “Offering”) of
an aggregate principal amount of $2,250,000 promissory notes (the “Prior
Notes”), entered into a second amendment to their respective June 2008 Purchase
Agreements, as previously amended on December 31, 2008, pursuant to which the
Prior Notes had been issued (the “Second Amendment”).
Pursuant
to the Second Amendment:
(i) the
Maturity Date of the indebtedness represented by the Prior Notes was extended
from December 31, 2009 to December 31, 2010;
(ii) accrued
and unpaid interest on the Prior Notes, in the aggregate amount of $323,301, was
added to the principal amount outstanding (resulting in an aggregate principal
balance of $2,573,301 immediately after the Second Amendment reflected in the
New Notes defined below);
(iii) new
notes (the “New Notes”) incorporating the changes set forth in (i) and (ii)
above were issued to the Investors in exchange for the cancellation of the Prior
Notes; and
(iv) the
Investors received three-year warrants to purchase an aggregate of 789,356
shares of common stock of the Company, at an exercise price of $1.63 per share
("Additional Investor Warrants").
The
Company’s repayment of amounts due under the New Notes is secured by a pledge of
an aggregate of 3,157,425 shares of common stock of the Company beneficially
owned by Yang Yong Shan, the Company’s Chairman, Chief Executive Officer and
President.
In
consideration for its services in connection with the Second Amendment, the
Company issued 200,000 shares of its common stock (the “Shares”) to the entity
that had acted as placement agent for the Offering (the “Placement
Agent”).
The
foregoing description of the Second Amendment does not purport to be complete
and is qualified in its entirety by reference to the complete text of the Second
Amendment, which is filed as Exhibit 10.1 hereto and incorporated herein by
reference.
The New
Notes have such characteristics as are further described in Item 2.03 below,
which disclosure is incorporated herein by reference. The Additional Investor
Warrants have such characteristics as are further described in Item 3.02 below,
which disclosure is incorporated herein by reference.
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Item
2.03.
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a
Registrant.
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Reference
is made to the disclosure set forth under Item 1.01 above, which disclosure is
incorporated herein by reference.
On
December 31, 2009, the Company issued the New Notes to the Investors. The New
Notes bear interest at a rate of 10% until due and payable on December 31, 2010.
Any amount of principal or interest which is not paid when due will bear
interest at a rate of 12%. The Company may prepay the entire amount
due under the New Notes at any time without penalty, upon 15 days prior written
notice. Each holder has the right to be prepaid any amounts due under
its New Note from the proceeds of any future offering by the Company resulting
in gross proceeds of $4,500,000 or more, with the exception of offerings where
the proceeds will be used primarily in connection with the expansion and/or
equipping of the Borrower’s newly-constructed production facility located in
Hailun City, Heilongjiang Province, China. So long as the Company has
any obligation under the New Notes, there are limitations on its ability to: (a)
pay dividends or make other distributions on its capital stock; (b) redeem,
repurchase or otherwise acquire any of its securities; (c) create, incur or
assume any liability for borrowed money (with certain exceptions, including,
without limitation, borrowings where the funds will be used primarily in
connection with the expansion and/or equipping of the Company’s
newly-constructed production facility located in Hailun City, Heilongjiang
Province, China); (d) sell, lease or otherwise dispose of any significant
portion of its assets; (e) lend money, give credit or make advances; or (f)
assume, guarantee, endorse, contingently agree to purchase or otherwise become
liable upon the obligation of any other person or entity. The New
Notes contain certain “Events of Default” which, if they were to occur and not
be waived by the holders of the New Notes, would allow the holder to consider
the New Notes to be immediately due and payable, without presentment, demand,
protest or notice of any kind, and the holder would then be entitled to
immediately enforce any and all of its rights and remedies provided in the New
Notes or any other right or remedy afforded by law. Among others, the Events of
Default included under the New Notes include if: (a) the Company fails to pay
principal or interest when due on the Second Amended Note; (b) the Company
breaches any material covenant or other material term or condition contained in
the New Notes or the Second Amendment, and such breach continues for a period of
thirty (30) days after written notice thereof; (c) a money judgment shall be
entered against the Company, or any subsidiary of the Company, for more than
$250,000, that remains in effect for a period of twenty (20) days; or (d) the
Company fails to maintain the listing of its common stock on at least one of the
Over-the-Counter Bulletin Board, the Nasdaq National Market, the Nasdaq SmallCap
Market, the New York Stock Exchange, or the NYSE Amex Equities.
The
foregoing description of the New Notes does not purport to be complete and is
qualified in its entirety by reference to the complete text of the New Notes, a
form of which is filed as Exhibit 4.1 hereto and incorporated herein by
reference.
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Item.
3.02.
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Unregistered
Sales of Equity Securities.
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Reference
is made to the disclosure set forth under Item 1.01 above, which disclosure is
incorporated herein by reference.
As of
December 31, 2009, the Company issued the Additional Investor Warrants to the
Investors. The Additional Investor Warrants represent the right to purchase an
aggregate of 789,356 shares of the Company’s common stock, at an exercise price
of $1.63 per share. The Additional Investor Warrants will expire three years
after the date of their original issuance. The Additional Investor Warrants may
be exercised for cash only. The number of shares of the Company’s common stock
deliverable upon exercise of the Additional Investor Warrants will be subject to
adjustment for, among other things, subdivision or consolidation of shares, and
certain other standard dilutive events. The holder of Additional Investor
Warrants will not be entitled to exercise a number of Additional Investor
Warrants in excess of the number of Additional Investor Warrants upon exercise
of which would result in beneficial ownership by such holder and his, her or its
affiliates of more than 9.9% of the outstanding shares of the Company’s common
stock, unless this provision is waived by written agreement between the holder
and the Company not less than sixty-one (61) days from the date of such waiver.
The Company has granted the Investors “piggyback” registration rights with
respect to the shares underlying the Additional Investor
Warrants.
The
foregoing description of the Additional Investor Warrants does not purport to be
complete and is qualified in its entirety by reference to the complete text of
the Additional Investor Warrants, which is filed as Exhibit 4.2 hereto and
incorporated herein by reference.
As of
December 31, 2009, the Company issued the Placement Agent 200,000 Shares in
consideration for services rendered in connection with the Second
Amendment.
The
Company believes that the issuance of the Additional Investor Warrants and
Shares in the transactions described above are exempt from
registration under the Securities Act of 1933, as amended, (the “Act”) pursuant
to Section 4(2), and/or Regulation D promulgated thereunder, as transactions by
an issuer not involving a public offering.
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Item
9.01.
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Financial
Statements and Exhibits
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(d) Exhibits.
The
exhibits listed in the following Exhibit Index are filed as part of this Form
8-K.
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Exhibit No.
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Description
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4.1
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Form
of New Notes
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4.2
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Form
of Additional Investor Warrants
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10.1
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Second
Amendment to Purchase Agreement, dated December 31,
2009
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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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EMERALD DAIRY INC.
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(Registrant)
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Date:
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January 7, 2010
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By:
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/s/ Yang Yong Shan
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Yang Yong Shan
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Chairman, Chief Executive Officer and
President
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