Attached files
| file | filename |
|---|---|
| EX-10.2 - CONVERTIBLE SECURED PROMISSORY NOTE - Helix Wind, Corp. | helix_ex1002.htm |
| EX-10.3 - WARRANT - Helix Wind, Corp. | helix_ex1003.htm |
| EX-10.1 - NOTE AND WARRANT PURCHASE AGREEMENT - Helix Wind, Corp. | helix_ex1001.htm |
| EX-10.4 - STOCK PLEDGE AGREEMENT - Helix Wind, Corp. | helix_ex1004.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
Date of
report (Date of earliest event reported): February 2, 2010
HELIX WIND,
CORP.
(Exact
Name of Registrant as Specified in Its Charter)
Nevada
(State or
Other Jurisdiction of Incorporation)
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000-52107
(Commission
File Number)
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20-4069588
(IRS
Employer Identification No.)
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1848
Commercial Street
San Diego, California
92113
(Address
of Principal Executive Offices, Zip Code)
(877)
246-4354
(Registrant's
Telephone Number, Including Area Code)
(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):
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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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o
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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
Effective
as of February 2, 2010, Helix Wind, Corp., a Nevada corporation (the “Company”),
entered into a Note and Warrant Purchase Agreement (the “Purchase Agreement”)
with St. George Investments, LLC, an Illinois limited liability company (the
“Investor”) pursuant to which, among other things, the Company issued (i) a
convertible secured promissory note in the aggregate principal amount of
$780,000 (the “Note”) and (ii) a five-year warrant (the “Warrant”) to purchase
up to an aggregate of 300,000 shares of the Company’s common stock, par value
$0.0001 per share (“Common Stock”), subject to adjustment, with an exercise
price of $1.25 per share. The Warrant contains a cashless exercise provision.
The Purchase Agreement also contains representations, warranties and
indemnifications by the Company and the Investor, as well as piggyback
registration rights for the Common Stock underlying the Note and the
Warrant.
On
February 2, 2010, the Investor submitted to the Company $400,000 pursuant to the
terms of the Note, and on March 2, 2010 if there is no default and no Triggering
Event (as such term is defined in the Note) has occurred, the Investor is
required to fund the balance of $185,000 if all the conditions contained in the
Purchase Agreement are satisfied.
The
obligations of the Company to the Investor are secured by a pledge made by Ian
Gardner, the Chief Executive Officer of the Company, of 4,800,000 of his shares
of common stock of the Company. The Company also executed and delivered a
Confession of Judgment in favor of the Investor.
In
connection with the financing, Dominick & Dominick, the placement agent,
received a cash payment of $48,000 and the issuance of 48,000 warrants to
purchase 48,000 shares of common stock. The warrants have the same terms as
those issued to St. George.
The
following is a brief summary of each of those agreements. These summaries are
not complete, and are qualified in their entirety by reference to the full text
of the agreements that are attached as exhibits to this Current Report on Form
8-K. Readers should review those agreements for a more complete understanding of
the terms and conditions associated with this transaction.
Purchase
Agreement
Pursuant
to the Purchase Agreement, so long as the Note is outstanding, the Company will
not (i) incur any new indebtedness for borrowed money without the prior written
consent of the Investor; provided, however the Company
may incur obligations under trade payables in the ordinary course of business
consistent with past practice without the consent of the Investor; (ii) grant or
permit any security interest (or other lien or other encumbrance) in or on any
of its assets; and (iii) enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any affiliate of the Company, or amend or modify any
agreement related to any of the foregoing, except on terms that are no less
favorable, in any material respect, than those obtainable from any person who is
not an affiliate.
2
Note
The Note
matures on the earlier of 6 months from the date of issuance or when the Company
raises in excess of $5,000,000. If there is a default the Note will accrue
interest at the rate of 18% per annum. The Note is convertible into Common Stock
at a price of which is the lower of the average volume weighted average price
for the three trading days with the lowest average VWAP of the twenty days prior
to the conversion notice or 50% of the VWAP over the 5 days prior such
notice. The shares deliverable to the Investor must be delivered
electronically, via DWAC or DTC. If the Company does not deliver shares issuable
upon conversion of the Note within three days of a conversion notice, the
Company must pay the Investor a penalty of 1.5% of the conversion amount added
to the balance of the Note per day. The number of shares the Note is convertible
into is subject to customary anti-dilution provisions.
Upon any
of the following trigger events, the outstanding amount due under the Note is
increased to 125% and the Note accrues interest at the rate of 18%: (i) there is
a decline in the VWAP for 5 days to a per share price of less than $1.50; (ii)
there is a decline in the 5-day average dollar volume to less than $100,000 of
volume per day; (iii) a decline in the total value of the pledge to a value of
less than 5 times the outstanding balance of the Note; or (iv) an Event of
Default. An Event of Default includes (i) a failure to pay any amount
due under the Note when due; (ii) a failure to deliver shares upon conversion of
the Note; (iii) the market value of the collateral (the 4,800,000 shares pledged
by Mr. Gardner) does not equal or exceed 500% of the outstanding amount of the
Note; (iv) any trigger event which is not cured within 3 days; (v) the Company
breaches any covenant, representation or other term or condition in the Purchase
Agreement, Note or other transaction document; or (vi) upon bankruptcy
events.
Warrant
The
Warrant provides the holder the right to purchase up to 300,000 shares of Common
Stock, subject to adjustment as described in the Warrant, at an exercise
purchase price of $1.25 per share. The Warrant is exercisable for
five years, commencing from the date of issuance. The Warrant has anti-dilution
and cashless exercise rights. If the Company fails to deliver shares issuable
upon exercise of the Warrant within three days, the Company shall pay the
Investor $100 per day for each $10,000 of exercise price subject to the delivery
default.
The Note
and the Warrant contain certain limitations on conversion and exercise. They
provide that no conversion or exercise may be made if, after giving effect to
the conversion and/or exercise, the subscriber would own in excess of 9.99% of
the Company’s outstanding shares of Common Stock.
3
Other than
Excepted Issuances (described below), if the Note and Warrant are outstanding,
the Company agrees to issue shares or securities convertible for shares at a
price (including an exercise price) which is less than the conversion price of
the Note or exercise price of the Warrant, then the conversion price and
exercise price, as the case may be, shall be reduced to the price of any such
securities. The only Excepted Issuances are (i) the Company’s issuance of
securities to strategic licensing agreements or other partnering agreements
which are not for the purpose of raising capital and no registration rights are
granted and (ii) the Company’s issuance to employee, directors and consultants
pursuant to plans outstanding.
The Note and Warrant were offered and sold in reliance on the exemption from registration afforded by Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as amended.
For all
the terms and conditions of the Purchase Agreement, Note and Warrant, reference
is hereby made to such documents annexed hereto as Exhibits 10.1, 10.2 and 10.3,
respectively. All statements made herein concerning the foregoing documents are
qualified by reference to said Exhibit.
Section
3-Securities and Trading Markets
Item
3.02 Unregistered Sales of Equity Securities.
The
information provided in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Section
8 – Other Events
Item
8.01 Other Events
Pursuant
to of the Company’s obligations (i) under the Asset Purchase Agreement, dated as
of September 9, 2009 between the Company, Abundant Renewable Energy, LLC
(“ARE”), Renewable Energy Engineering, Robert W. Preus and Helen M. Hull, as
subsequently amended, and (ii) in connection with the testimony given by Mr. Ian
Gardner, the Company’s CEO, in the United States Bankruptcy Court for the
District of Oregon on December 3, 2009, the Company agreed to irrevocably pledge
shares of the Company to ARE as a demonstration of the Company’s commitment to
and confidence in the funding of ARE’s plan of reorganization. As a
result, on February 1, 2010, the Company issued to Schwabe, Williamson &
Wyatt, as escrow agent, 1,101,322 shares of restricted common stock of the
Company; such issuance represented a current fair market value of $2,500,000
calculated on the 30 day average final bid price. These shares are
subject to be released by the escrow agent (i) upon consummation of the
Company’s purchase of ARE as approved by the Court, in which case the shares
will be transferred to ARE or returned to the Company as directed by the Court;
(ii) upon the denial of ARE’s bankruptcy, in which case the shares will be
transferred to ARE; or (iii) upon a written order from the Court, in which case
the transfer agent will transfer the shares in accordance with such order. The
shares are further subject to a lock-up agreement which prohibits the transfer
of the shares for a 12-month period.
4
Section
9-Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits.
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10.1
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Note
and Warrant Purchase Agreement, dated as of January 27, 2010, is entered
into by and between Helix Wind, Corp., a Nevada corporation and St. George
Investments, LLC, an Illinois limited liability
company
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10.2
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Convertible
Secured Promissory Note dated as of January 27, 2010, in the aggregate
principal amount of $780,000 issued to St. George Investments,
LLC
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10.3
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Warrant
to purchase shares of common stock of Helix Wind,
Corp.
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10.4
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Stock
Pledge Agreement is entered into as of the 27th day of January, 2010 by
and between St. George Investments, LLC and Ian
Gardner
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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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HELIX
WIND, CORP.
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By:
/s/
Ian
Gardner
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Name: Ian
Gardner
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Title:
CEO
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Date: February
8, 2010
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