Attached files
| file | filename |
|---|---|
| EX-3.1 - EPIC ENERGY RESOURCES, INC. | v181123_ex3-1.htm |
| EX-10.5 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-5.htm |
| EX-10.9 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-9.htm |
| EX-10.7 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-7.htm |
| EX-10.6 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-6.htm |
| EX-10.1 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-1.htm |
| EX-10.8 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-8.htm |
| EX-10.2 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-2.htm |
| EX-99.1 - EPIC ENERGY RESOURCES, INC. | v181123_ex99-1.htm |
| EX-10.4 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-4.htm |
| EX-10.3 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-3.htm |
| EX-10.10 - EPIC ENERGY RESOURCES, INC. | v181123_ex10-10.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) April 9, 2010
EPIC
ENERGY RESOURCES, INC.
(Exact
name of registrant as specified in its charter)
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Colorado
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0-31357
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94-3363969
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File
No)
|
(I.R.S.
Employer
Identification
Number)
|
1450
Lake Robbins Dr., Suite 160
The
Woodlands, TX 77830
(Address
of principal executive offices) (Zip Code)
(281)
419-3742
(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:
|
¨
|
Written communication 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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¨
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Pre-commencement communication
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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|
¨
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Pre-commencement communication
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Private
Placement.
On April 9, 2010, Epic Energy Resources, Inc. (the “Company”)
entered into a Subscription Agreement (the “Subscription Agreement”), a copy of
which is attached hereto as Exhibit 10.1 and is incorporated by reference
herein, with accredited investors in connection with the private issuance and sale (the “Private Placement”) to such investors of an aggregate of 3,66,000
shares of the Company’s Series A Convertible Preferred Stock (“Series A
Preferred Stock”). The Company sold the Series A Preferred Stock in
the Private Placement for $1.00 per share. Each share of Series A
Preferred Stock will be convertible into 14 shares of the Company’s common
stock, no par value (“Common Stock”), after such time that the Company increases
its authorized shares of Common Stock sufficiently to permit such
conversion. The Company has agreed to file a proxy statement seeking
shareholder approval of this increase in its authorized shares of Common Stock
within 20 business days of the closing of the Private Placement and to use its
reasonable efforts to amend the Company’s articles of incorporation to increase
the number of authorized but unissued shares of Common Stock as soon as possible
following the Private Placement.
The
foregoing description of the Subscription Agreement is qualified in its entirety
by reference to the full text of the Subscription Agreement, a copy of which is
filed as Exhibit 10.1 to this Current Report on Form 8-K (“Current Report”) and
is incorporated by reference herein.
The
Company sold the Series A Preferred Stock without registration under the
Securities Act of 1933, as amended (the “Act”), or state securities laws, in
reliance on the exemptions provided by Section 4(2) of the Act and Regulation D
promulgated thereunder. Because the Series A Preferred Stock has not
been registered, such shares may not be offered or sold by the investors absent
registration or an applicable exemption from registration requirements, such as
the exemption afforded by Rule 144 under the Act.
The
information contained in this Current Report regarding the Private
Placement does not constitute an offer to sell or solicitation of offers to buy
the Series A Preferred Stock or any other securities.
Waiver, Deferral and
Amendment to Debentures and Exchange of Series D Warrants.
In
December 2007, the Company entered into a purchase agreement (the “Purchase
Agreement”) for the sale of $20,250,000 of its 10% Secured Debentures
(“Debentures”). The Debentures are due on December 5, 2012, with
interest payable quarterly on January 1, April 1, July 1 and October
1. Beginning December 1, 2008, the Company is required to make
quarterly principal payments of $1,265,625. The purchasers of the
Debentures (“Debenture Holders”) also received an aggregate of 17,071,363 Series
D Warrants, which entitled the holders to purchase shares of the Company’s
Common Stock at $1.65 per share.
The
Company did not make the December 1, 2008 principal payment when due and this
resulted in an event of default. On February 26, 2009, the Company entered into
an amendment to the purchase agreement (“Purchase Agreement Amendment”) with all
of the Debenture Holders other than one holder of a $250,000 Debenture, to amend
the Purchase Agreement. Under the Purchase Agreement Amendment, the Company paid
the amounts due and the Debenture Holders agreed to waive any events of default
of which they had knowledge. Also, to the extent that a Debenture
Holder had requested acceleration of payment of its Debenture, the Debenture
Holder rescinded such request and any resulting acceleration of its
Debenture.
The
Company did not make its March 1, 2010 principal payment on its outstanding
Debentures when due and this resulted in an event of default under the
Debentures.
The
Purchase Agreement Amendment provides that for each three-month period
commencing on January 1, 2010 and ending on each March 31, June 30, September 30
and December 31 thereafter, the Company shall generate, on a consolidated basis,
EBITDA of at least $1,000,000. The Company did not achieve $1,000,000
of EBITDA for the three month period ended March 31, 2010.
The
Purchase Agreement Amendment provides that until June 30, 2010, the Company may
not issue in excess of 10,000,000 shares of the Company’s Common Stock or Common
Stock equivalents to its employees, consultants, officers, directors and
advisors. The Private Placement and the other transactions specified
in this Current Report were conditioned upon, among other things, the issuance
of 1,200,000 shares of Series A Preferred Stock to directors in exchange for
deferred board fees and to members of management in exchange for deferred and
reduced compensation, with such shares of Series A Preferred Stock convertible
into 16,800,000 shares of Common Stock.
The
Purchase Agreement Amendment provides, among other things, that for calendar
years 2009 and 2010, so long as the Debentures are outstanding, the Company may
not increase the individual cash salaries of any officers or executives
identified by name in the Incentive Compensation Plan beyond 2008
levels. In October 2009, the compensation committee of the Board of
Directors authorized the increase of the cash salaries of the chief executive
officer and the chief financial officer beyond the 2008 levels.
The
Purchase Agreement provides that the Company may not redeem Debentures from less
than all of the Debenture Holders. In connection with the Private
Placement and the other transactions specified in this Current Report, the
Company redeemed Debentures from certain of the Debenture Holders.
The
Purchase Agreement Amendment requires the Company to provide specified reports
to certain Debenture Holders. The Company has not complied with such
requirement.
The
Company also entered into an Amendment Agreement in December 2009 to amend the
Debentures (the “Debenture Amendment”) with the two Debenture Holders (“Limited
Holders”) that hold $14,100,000 principal amount of the outstanding $14,900,000
principal amount of outstanding Debentures. Under the Debenture
Amendment, the Limited Holders agreed to defer the principal amount owed to them
for the fourth quarter of 2009 until December 1, 2010, and the Company agreed to
pay interest to the Limited Holders on the aggregate unredeemed and then
outstanding principal amount of their Debentures at the rate of 12% per
annum.
Pursuant
to the Waiver and Amendment to Debenture entered into by and among the Company
and Debenture Holders holding 98% of the principal amount outstanding under the
Debentures dated as of April 9, 2010, a copy of which is attached as Exhibit
10.2 and is incorporated by reference herein, and the Amendment to Securities
Purchase Agreement entered into by and among the Company and the Debenture
Holders dated as of April 9, 2010, a copy of which is attached as Exhibit 10.3
and is incorporated by reference herein, the Company issued 147,094 shares of
Series A Preferred Stock to one Limited Holder and 3,940,678 shares of Common
Stock pro rata to the other Debenture Holders in exchange for the consent to
defer principal payments and amend or waive the foregoing specified covenants
pertaining to the Debentures. The Waiver and Amendment to Debenture
and the Amendment to Securities Purchase Agreement required the Debenture
Holders to represent and warrant that they were not aware of any other breaches
of the Purchase Agreement, as amended by the Purchase Agreement Amendment, or
any events of default under the Debentures.
The
Company agreed to redeem all of the Debentures held by the Debenture Holders
that did not agree to the Waiver and Amendment to Debenture and the Amendment to
Securities Purchase Agreement.
The
foregoing descriptions of the Waiver and Amendment to Debenture and the
Amendment to Securities Purchase Agreement are qualified in their entirety by
reference to the full text of the Waiver and Amendment to Debenture and the
Amendment to Securities Purchase Agreement, copies of which are filed as Exhibit
10.2 and Exhibit 10.3, respectively, to this Current Report and are incorporated
by reference herein.
The
Company issued the shares of Series A Preferred Stock and the shares of Common
Stock without registration under the Act, or state securities laws, in reliance
on the exemptions provided by Section 4(2) of the Act and Regulation D
promulgated thereunder. Because the Series A Preferred Stock and
Common Stock have not been registered, such shares may not be offered or sold by
the investors absent registration or an applicable exemption from registration
requirements, such as the exemption afforded by Rule 144 under the
Act.
Pursuant
to the Series D Warrant Exchange Agreement, a copy of which is attached as
Exhibit 10.4 and is incorporated by reference herein, the Company issued 379,870
shares of its Series A Preferred Stock to one Limited Holder and 11,753,181
shares of its Common Stock to all other Debenture Holders in exchange for
17,071,363 Series D Warrants.
The
foregoing description of the Series D Warrant Exchange Agreement is qualified in
its entirety by reference to the full text of the Series D Warrant Exchange
Agreement, a copy of which is filed as Exhibit 10.4 to this Current Report and
is incorporated by reference herein.
The
Company issued such shares of Series A Preferred Stock and Common Stock without
registration under the Act, or state securities laws, in reliance on the
exemptions provided by Section 4(2) of the Act and Regulation D promulgated
thereunder. Pursuant to Rule
144(d)(3)(ii) of the Act, the holding period of the Series A Preferred Stock and
the Common Stock issued in exchange for the Series D Warrants will tack back to
the original issue date of the Series D Warrants and as a result such Series A
Preferred Stock and Common Stock will be issued without a restrictive legend and
shall otherwise have no restrictions on resale by the
holders. Holders of such Series A Preferred Stock and Common Stock
will therefore be permitted to resell such shares of Series A Preferred Stock
and Common Stock without restriction, and resales by such investors of the
Series A Preferred Stock and Common Stock will not be covered by a registration
statement filed by the Company.
Debentures Exchange
Offer.
As of
March 31, 2010,, the Company had outstanding $14,900,000 principal
amount of Debentures. In connection with the Private Placement and
the other transactions specified in this Current Report, pursuant to the
Debenture Exchange Agreement, a copy of which is attached as Exhibit 10.5 and is
incorporated by reference herein, the Company issued an aggregate of 14,000,000
shares of its Common Stock to certain Debenture Holders in exchange for the
forgiveness of an aggregate of $1,000,000 of principal amount of
Debentures. Following this exchange, the Company had outstanding
$13,900,000 principal amount of Debentures.
The
foregoing description of the Debenture Exchange Agreement is qualified in its
entirety by reference to the full text of the Debenture Exchange Agreement, a
copy of which is filed as Exhibit 10.5 to this Current Report and is
incorporated by reference herein.
The
Company issued such shares of Common Stock without registration under the Act,
or state securities laws, in reliance on the exemptions provided by Section 4(2)
of the Act and Regulation D promulgated thereunder. Pursuant to Rule
144(d)(3)(ii) of the Act, the holding period of the Common Stock issued in
exchange for the outstanding principal amount of the Debentures will tack back
to the original issue date of the Debentures and as a result such Common Stock
will be issued without a restrictive legend and shall otherwise have no
restrictions on resale by the holders. Holders of such Common Stock
will therefore be permitted to resell such shares of Common Stock without
restriction, and resales by such investors of the Common Stock will not be
covered by a registration statement filed by the Company.
Waiver of Covenants by
Series C Warrant Holders and Exchange of Series C Warrants.
The
Company had outstanding 5,613,668 outstanding Series C Warrants that were each
exercisable into one share of the Company’s Common Stock at an exercise price of
$1.50 per share. The Company and the holders of the Series C Warrants
are parties to that certain Registration Rights Agreement, dated as of December
5, 2007 (“Former Registration Rights Agreement”). The Former
Registration Rights Agreement obligated the Company to (i) file a registration
statement on or prior to June 5, 2008, (ii) cause the registration statement
registering the resale of all of the Initial Shares (as defined in the Former
Registration Rights Agreement) to be declared effective by the Securities and
Exchange Commission (“Commission”) within 90 days following the filing of the
registration statement and (iii) cause all of the Registrable Securities (as
defined in the Former Registration Rights Agreement) to be registered for resale
pursuant to one or more effective registration statements on or before June 1,
2008 (collectively, the “Registration Obligations”).
The
Company was unable to comply with its Registration Obligations; thus, the
holders of the Series C Warrants were entitled to an amount in cash equal to 2%
of the aggregate purchase price paid by the holders of Series C Warrants for the
Common Stock acquired by the holder of Series C Warrants pursuant to the
Securities Purchase Agreement, dated as of December 5, 2007 (“Securities
Purchase Agreement”), for any unregistered Registrable Securities (as defined in
the Former Registration Rights Agreement) then held by the holders of Series C
Warrants (“Liquidated Damages”) and that failure by the Company to pay the
Liquidated Damages obligated the Company to pay interest thereon at a rate of
18% per annum to the holders of Series C Warrants
(“Interest”). Holders of the Series D Warrants have previously waived
the Registration Obligations and any claims for Liquidated Damages, but the
holders of the Series C Warrants have not previously waived the Registration
Obligations and any claims for Liquidated Damages.
Pursuant
to the Series C Warrant Exchange Agreement, a copy of which is attached as
Exhibit 10.6 and is incorporated by reference herein, the Company issued 71,429
shares of its Series A Preferred Stock to one Series C Warrant holder and
4,613,668 shares of its Common Stock to all other Series C Warrant holders in
exchange for 5,613,668 Series C Warrants. The holders of Series C
Warrants also waived the Registration Obligations and the right to collect
Liquidated Damages and Interest.
The
foregoing description of the Series C Warrant Exchange Agreement is qualified in
its entirety by reference to the full text of the Series C Warrant Exchange
Agreement, a copy of which is filed as Exhibit 10.6 to this Current Report and
is incorporated by reference herein.
The
Company issued such shares of Series A Preferred Stock and Common Stock without
registration under the Act, or state securities laws, in reliance on the
exemptions provided by Section 4(2) of the Act and Regulation D promulgated
thereunder. Pursuant to Rule
144(d)(3)(ii) of the Act, the holding period of the Series A Preferred Stock and
Common Stock issued in exchange for the Series C Warrants will tack back to the
original issue date of the Series C Warrants and as a result such Series A
Preferred Stock and Common Stock will be issued without a restrictive legend and
shall otherwise have no restrictions on resale by the
holders. Holders of such Series A Preferred Stock and
Common Stock will therefore be permitted to resell such shares of Series A
Preferred Stock and Common Stock without restriction, and resales by such
investors of the Series A Preferred Stock and Common Stock will not be covered
by a registration statement filed by the Company.
Agreement with Management
and Directors.
As of
April 1, 2010, the Company owed to certain members of management an aggregate
amount of approximately $400,000 for past compensation. In addition,
such members of management had agreed to a reduction in their base salaries in
an aggregate amount of approximately $550,000 for the remainder of
2010. In connection with the Private Placement and the other
transactions specified in this Current Report, pursuant to the Employee Salary
Exchange Agreement, a copy of which is attached as Exhibit 10.7 and is
incorporated by reference herein, and the Executive Salary Exchange Agreement, a
copy of which is attached as Exhibit 10.8 and is incorporated by reference
herein, the Company plans to issue an aggregate of approximately
950,000 shares of Series A Preferred Stock to such members of management in
exchange for the forgiveness of such amounts and a reduction in their 2010 base
salary subject to such managers remaining with the Company through the end of
2010 . As of April 1, 2010, the Company owed to its directors an
aggregate amount of approximately $108,600 for past board fees earned, in
addition the directors have agreed to forego their fee for the remainder of
2010. In connection with the Private Placement and the other
transactions specified in this Current Report, pursuant to the Director Fee
Exchange Agreement, a copy of which is attached as Exhibit 10.9 and is
incorporated by reference herein, the Company plans to
issue an aggregate of approximately 250,000 shares of Series A
Preferred Stock to such directors in exchange for the forgiveness of such board
fees.
The
foregoing descriptions of the Employee Salary Exchange Agreement, the Executive
Salary Exchange Agreement and the Director Fee Exchange Agreement are qualified
in their entirety by reference to the full text of the Employee Salary Exchange
Agreement, the Executive Salary Exchange Agreement and the Director Fee Exchange
Agreement, copies of which are filed as Exhibit 10.7, Exhibit 10.8 and Exhibit
10.9, respectively, to this Current Report and are incorporated by reference
herein.
The
Company issued the Series A Preferred Stock without registration under the Act,
or state securities laws, in reliance on the exemptions provided by Section 4(2)
of the Act and Regulation D promulgated thereunder. Because the
Series A Preferred Stock has not been registered, such shares may not be offered
or sold by the investors absent registration or an applicable exemption from
registration requirements, such as the exemption afforded by Rule 144 under the
Act.
Bridge
Loan.
On March
4, 2010, the Company, as borrower, and Castex New Ventures, L.P. (“Castex”), as
lender, entered into a bridge loan note (the “Note”) in an aggregate amount of
up to $500,000.00 at any time outstanding to be used for general corporate
purposes.
In
connection with the Private Placement and the other transactions specified in
this Current Report, pursuant to the Subscription Agreement the Company issued
500,000 shares of Series A Preferred Stock to Castex in exchange for the
forgiveness of the $500,000 amount owing under the Note.
The
Company issued the Series A Preferred Stock without registration under the Act,
or state securities laws, in reliance on the exemptions provided by Section 4(2)
of the Act and Regulation D promulgated thereunder. Because the
Series A Preferred Stock has not been registered, such shares may not be offered
or sold by the investors absent registration or an applicable exemption from
registration requirements, such as the exemption afforded by Rule 144 under the
Act.
Registration Rights
Agreement.
In
connection with the Private Placement and the other transactions specified in
this Current Report, the Company agreed, pursuant to the registration rights
agreement between the Company and the signatories thereto, a copy of which is
attached as Exhibit 10.10 and is incorporated by reference herein (“Registration
Rights Agreement”), to use its best efforts to prepare and file with the
Commission within 120 days after it increases its authorized shares of Common
Stock sufficiently to permit the conversion of the Series A Preferred Stock a
registration statement with respect to the resale of shares of the Company’s
Common Stock issued pursuant to the transactions specified in this Current
Report and the shares of Common Stock underlying the Series A Preferred Stock
issued pursuant to the Private Placement and the transactions specified in this
Current Report on the OTCBB or in privately-negotiated transactions and prepare
and file such amendments and supplements to the resale registration statement as
may be necessary to keep it effective until the earliest of (i) one year after
the effective date of the resale registration statement, (ii) the date on which
the Common Stock becomes eligible for resale by non-affiliates by reason of Rule
144(b)(1) under the Act or any other rule of similar effect or (iii) when all
the Common Stock has been sold pursuant to the resale registration
statement. Shares of Series A Preferred Stock will not be registered
under such registration statement. The Company also agreed to use
commercially reasonable efforts, subject to receipt of necessary information
from the signatories, to cause a resale registration statement to become
effective (i) within twenty business days after the Commission has advised the
Company that the resale registration statement has not been selected for review
by the Commission or (ii) within the sooner of twenty business days after the
Commission has advised the that it has no further comments to the resale
registration statement.
The
foregoing description of the Registration Rights Agreement is qualified in its
entirety by reference to the full text of the Registration Rights Agreement, a
copy of which is filed as Exhibit 10.10 to this Current Report and is
incorporated by reference herein.
Item 3.02
Unregistered Sales of Equity Securities
The
disclosure set forth in Item 1.01 is incorporated by reference into this
Item 3.02.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On April
12, 2010, the Company filed with the Colorado Secretary of State Articles
of Amendment amending its Articles of Incorporation to fix the
designations, preferences, limitations and relative rights of the Series A
Preferred Stock. Each share of Series A Preferred Stock is
convertible into 14 shares of Common Stock and has a liquidation preference of
$1.00 per share. The Articles of Amendment are attached hereto as Exhibit 3.1
and are incorporated by reference herein.
The
foregoing description of the Articles of Amendment to the Articles of
Incorporation is qualified in its entirety by reference to the full text of the
Articles of Amendment to the Articles of Incorporation, a copy of which is filed
as Exhibit 3.1 to this Current Report and is incorporated by reference
herein.
Item 9.01
Financial Statements and Exhibits
(d) Exhibits
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Exhibit
Number
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Description
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3.1
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Articles
of Amendment to Articles of Incorporation of the Company filed with the
Colorado Secretary of State on April 12, 2010
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10.1
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Form
of Subscription Agreement entered into between the Company and the
signatories thereto dated April 9, 2010
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10.2
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Form
of Waiver and Amendment to Debenture entered into between the Company and
the signatories thereto dated April 9, 2010
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10.3
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Form
of Amendment to Securities Purchase Agreement entered into between the
Company and the signatories thereto dated April 9, 2010
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10.4
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Form
of Series D Warrant Exchange Agreement entered into between the Company
and the signatories thereto dated April 9, 2010
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10.5
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Form
of Debenture Exchange Agreement entered into between the Company and the
signatories thereto dated April 9, 2010
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10.6
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Form
of Series C Warrant Exchange Agreement entered into between the Company
and the signatories thereto dated April 9, 2010
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10.7
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Form
of Employee Salary Exchange Agreement entered into between the Company and
the signatories thereto dated April 9, 2010
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10.8
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Form
of the Executive Salary Exchange Agreement entered into between the
Company and the signatories thereto dated April 9, 2010
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10.9
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Form
of the Director Fee Exchange Agreement entered into between the Company
and the signatories thereto dated April 9, 2010
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10.10
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Form
of the Registration Rights Agreement entered into between the Company and
the signatories thereto dated April 9, 2010
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99.1
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Press
Release dated April 14,
2010
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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.
Dated:
April 14, 2010
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Epic
Energy Resources, Inc.
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(Registrant)
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By:
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/s/ Mike Kinney | |
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Mike
Kinney, Chief Financial
Officer
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