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UNITED STATES
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): February 22, 2011
BARON ENERGY, INC.
(Exact name of registrant as specified in its charter)
NEVADA 333-146627 26-0582528
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
392 W. Mill Street,
New Braunfels, TX 78130
(Address of principal executive offices) (Zip Code)
(830) 608-0300
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 obligations of the registrant under any of the
following provisions.
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] 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))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 22, 2011, Baron Energy, Inc. (the "Company," "we," "us," "our") and
Sunrise Securities Corp. ("Sunrise") executed an engagement letter agreement
(the "Agreement") pursuant to which Sunrise will provide us with financial
advisory services in connection with: (1) debt and equity financings; (2)
corporate restructuring and acquisitions; and (3) merger/tender offers with
targeted acquisition(s). As compensation for the performance of its services, we
will pay Sunrise a cash fee equal to 7% of the gross proceeds for any equity
instruments placed, 3% of the gross proceeds for any debt instruments placed,
and 5% of the gross proceeds for any preferred or other instruments convertible
into shares of our common stock ("Shares").
Upon execution of the Agreement, we granted Sunrise common stock purchase
warrants ("Warrants"), exercisable for three years from the date of grant, to
purchase 1,250,000 Shares at an exercise price of $0.01 per share. Upon any
re-capitalization of all our current debt during the term of the Agreement, we
will grant Sunrise additional Warrants, exercisable for three years from the
date of grant, to purchase 1,250,000 Shares at an exercise price of $0.01 per
share. Furthermore, in the event we successfully consummate a transaction
involving a merger with or tender for the assets or securities of other entities
during the term of the Agreement, we will grant Sunrise Warrants, exercisable
for three years from the date of grant, to purchase 2,500,000 Shares at an
exercise price of $0.01 per share.
The Agreement continues until terminated by either party upon five business days
written notice to the other. In the event we terminate the Agreement other than
because of Sunrise's material breach of an express obligation under the
Agreement, we will be obligated to pay Sunrise the applicable fees described
above, including the Warrants, if we consummate a transaction from a Sunrise
source prior to the date that is 12 months from the date of termination of this
Agreement.
The foregoing is not a complete description of all the terms of the Warrants or
the Agreement. For a complete description of all the terms of the Warrants or
the Agreement, we refer you to the full text of the Warrants and the Agreement,
a copy of which is filed herewith as Exhibit 4.1 and Exhibit 10.1, respectively,
to this Current Report on Form 8- K.
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 by reference into this Item 3.02.
The offering of the Warrants was not registered under the Securities Act of
1933, as amended (the "Securities Act"), but was made in reliance upon the
exemptions from the registration requirements of the Securities Act set forth in
Section 4(2) thereof and/or Rule 506 of Regulation D promulgated thereunder,
insofar as such securities were issued only to an "accredited investor" within
the meaning of Rule 501 of Regulation D. The recipient of our securities took
them for investment purposes without a view to distribution. Furthermore, they
had access to information concerning our Company and our business prospects;
there was no general solicitation or advertising for the purchase of our
securities; and the securities are restricted pursuant to Rule 144.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit No. Description
----------- -----------
4.1 Common Stock Purchase Warrant of Baron Energy, Inc. in the name of
Sunrise Securities Corp. dated February 22, 2011.
10.1 Engagement Letter agreement between Baron Energy, Inc. and Sunrise
Securities Corp. dated February 21, 2011, and entered into on
February 22, 2011.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
BARON ENERGY, INC.
Date: February 28, 2011 By: /s/ Ronnie L. Steinocher
-----------------------------------------
Name: Ronnie L. Steinocher
Title: President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 Common Stock Purchase Warrant of Baron Energy, Inc. in the name of
Sunrise Securities Corp. dated February 22, 2011.
10.1 Engagement Letter agreement between Baron Energy, Inc. and Sunrise
Securities Corp. dated February 21, 2011, and entered into on
February 22, 2011