Attached files
file | filename |
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EX-4.4 - EX-4.4 - PROSPECT GLOBAL RESOURCES INC. | c15999exv4w4.htm |
EX-4.1 - EX-4.1 - PROSPECT GLOBAL RESOURCES INC. | c15999exv4w1.htm |
EX-4.5 - EX-4.5 - PROSPECT GLOBAL RESOURCES INC. | c15999exv4w5.htm |
EX-4.2 - EX-4.2 - PROSPECT GLOBAL RESOURCES INC. | c15999exv4w2.htm |
EX-4.3 - EX-4.3 - PROSPECT GLOBAL RESOURCES INC. | c15999exv4w3.htm |
EX-10.3 - EX-10.3 - PROSPECT GLOBAL RESOURCES INC. | c15999exv10w3.htm |
EX-10.4 - EX-10.4 - PROSPECT GLOBAL RESOURCES INC. | c15999exv10w4.htm |
EX-10.2 - EX-10.2 - PROSPECT GLOBAL RESOURCES INC. | c15999exv10w2.htm |
EX-10.1 - EX-10.1 - PROSPECT GLOBAL RESOURCES INC. | c15999exv10w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 20, 2011
PROSPECT GLOBAL RESOURCES INC.
(Exact name of registrant as specified in its charter)
Nevada | 333-163499 | 26-3024783 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
600 17th Street Suite 2800 South Denver, CO |
80202 |
|
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (303) 634-2239
(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:
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.
On April 25, 2011 the Company issued a $2,500,000 convertible secured note due April 24, 2012 to
Hexagon Investments, LLC which accrues interest at 10% per annum. The note is secured pari passu
by all of our assets with our other $2,500,000 of outstanding convertible notes. The principal
amount plus accrued interest on the Hexagon note may convert at Hexagons option at any time
during the term into shares of our common stock at $3.00 per share, subject to adjustment solely
for capital reorganization events. The principal amount plus accrued interest will automatically
convert into shares of our common stock at $3.00 per share upon completion by us of the issuance of
at least $10,000,000 of securities; provided, that if such issuance of securities occurs at a per
share purchase price of less than $3.60, additional shares will be issued upon conversion such that
the total shares received by the holder upon conversion equals the aggregate principal amount (X)
plus all accrued interest (Y) divided by 0.8 times the per share purchase price of the securities
issuance (Z). For clarity, the total shares received by the holder shall be equal to (X + Y)÷(0.8
* Z).
We also issued Hexagon two warrants to purchase our common stock. The first warrant is exercisable
until April 25, 2013 for up to $2,000,000 of shares at a purchase price equal to the lower of (i)
$3.00 and (ii) $2,500,000 divided by the total number of shares of common stock issued upon
conversion of the convertible note. The second warrant is exercisable until April 25, 2014 for up
to $7,500,000 of shares at the same purchase price.
In connection with issuance of the convertible notes we granted piggy-back registration rights to
Hexagon for the shares issuable upon conversion of the note and exercise of the warrants.
In connection with the Hexagon financing, we agreed with Dr. Richard Merkin, who holds a $2,000,000
convertible note, to modifications to the terms of his note. The Merkin note and all accrued
interest will now convert automatically into 10,538,583 shares of our common stock upon completion
by us of the issuance of at least $10,000,000 of securities (previously this note was only
optionally convertible into that number of shares). Dr. Merkin also agreed to the deletion of the
majority of the negative covenants in the note. In exchange for these modifications, we agreed to
pay Dr. Merkin a fee of $2,000,000 upon the closing of an issuance of securities by us of at least
$10,000,000.
As consideration for consenting to the amendment to the Merkin Note we issued COR Capital LLC, as
investment advisor on behalf of COR US Equity Income Fund, a warrant to purchase up to $200,000 of
our common stock at a purchase price equal to the lower of (i) $3.00 and (ii) $500,000 divided by
the total number of shares of common stock issued upon conversion of CORs $500,000 convertible
note. The COR warrant expires on April 20, 2012.
Item 3.02 Unregistered Sale of Equity Securities.
Issuance of the Debentures, including the Placement Agent Debentures, described above was not
registered under the Securities Act of 1933. The issuance of the Debentures, including the
Placement Agent Debentures, was exempt from registration, pursuant to Section 4(2) of the
Securities Act of 1933 and Regulation D and Rule 506 promulgated thereunder. These securities
qualified for exemption since the issuance securities by us did not involve a public offering and
the purchasers are all accredited investors as defined in Regulation D. The offering was not a
public offering as defined in Section 4(2) due to the insubstantial number of persons involved in
the sale, size of the offering, manner of the offering and number of securities offered. In
addition, these shareholders have the necessary investment intent as required by Section 4(2) since
each agreed to and received share certificates bearing a legend stating that such securities are
restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these
securities would not be immediately redistributed into the market and therefore not be part of a
public offering. Based on an analysis of the above factors, we have met the requirements to
qualify for exemption under Section 4(2) of the Securities Act and Regulation D for this
transaction.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensation Arrangements of Certain Officers.
The Companys board of directors appointed Marc Holtzman to the board of directors effective April
21, 2011. As compensation for his services, Mr. Holtzman will receive 150,000 shares of the
Companys common stock, all of which are fully vested.
Since August 2008, Mr. Holtzman has served as vice chairman of Barclays Capital, the investment
banking division of Barclays Bank PLC. In 2007, Mr. Holtzman was executive vice chairman of ABN
Amro Bank until August 2008. In 2006, Mr. Holtzman was a candidate for the Republican nomination
for Colorado Governor. From 2003 through 2005 Mr. Holtzman was president of the University of
Denver. Previously from 1999 through 2003, Mr. Holtzman served in the cabinet of Governor Bill
Owens as Colorados first secretary of technology. In addition, Mr. Holtzman was chairman of
Colorados Information Management Commission and co-chairman of the Governors Commission on
Science and Technology. Mr. Holtzman helped guide Colorados economic transformation into a fully
diversified technology hub. Prior to his tenure in Colorado politics, Mr. Holtzman served as
executive vice chairman of ABN Amro Bank, was the co-founder and president of MeesPierson
EurAmerica (a firm which was subsequently acquired by ABN Amro) and served as senior adviser to
Salomon Brothers, when he lived and
worked in Eastern Europe and Russia from September 1989 until October 1998. Drawing on his early
experience in helping develop Central Asias finance sector, Mr. Holtzman was appointed by
Kazakhstans Prime Minister to serve on the board of trustees of The Almaty Regional Financial
Centre. In addition, since 2008 Mr. Holtzman has served as non-executive chairman of Indus, a
leading Indian oil and gas company listed on Londons AIM market with a market capitalization of
approximately US $2 billion and since 2009 has served as a director of the Bank of Kigali, Rwandas
largest financial institution and a public company registered under the Company law of Rwanda and
regulated by the National Bank of Rwanda. He holds a bachelor of arts degree in economics from
Lehigh University.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. | Identification of Exhibits | |||
4.1 | Senior Secured Convertible $2,500,000 Promissory Note with Hexagon Investments, LLC |
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4.2 | Two year Common Stock Purchase Warrant with Hexagon Investments |
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4.3 | Three year Common Stock Purchase Warrant with Hexagon Investments |
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4.4 | Common Stock Purchase Warrant with COR Capital |
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4.5 | Registration Rights Agreement with Hexagon Investments |
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10.1 | Securities Purchase Agreement with Hexagon Investments, |
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10.2 | Amended and Restated Security Agreement with Richard Merkin, COR
Capital and Hexagon Investments |
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10.3 | Amendment to Merkin Transaction Documents |
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10.4 | Waiver and Consent with COR Capital |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
PROSPECT GLOBAL RESOURCES INC. |
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By: | /s/ Jonathan Bloomfield | |||
Date: April 26, 2011 | Chief Financial Officer | |||
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