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EX-99.1 - PRESS RELEASE - root9B Holdings, Inc. | rtnb_ex991.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): August 21,
2017
root9B Holdings, Inc.
(Exact name of Company as specified in Charter)
Delaware
(State or other jurisdiction of incorporation or
organization)
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000-50502
(Commission File No.)
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20-0443575
(IRS Employee Identification No.)
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102 N. Cascade Avenue, Suite 220
Colorado Springs, CO 80919
(Address of Principal Executive Offices)
(602) 889-1137
(Issuer Telephone number)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Company under
any of the following provisions (see General Instruction A.2
below).
☐
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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))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13(e)-4(c))
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging
growth
company
☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange
Act. ☐
Item 1.01
Entry into a Material Definitive Agreement.
On August 21, 2017, the Company issued secured
convertible promissory notes (the “Notes”) to certain
of its existing secured debt holders including a director-elect of
the Company, and its President, with an aggregate principal amount
of $500,000, along with warrants to purchase shares (the
“Warrant Shares”) of the Company’s common stock,
par value $0.001 per share (the “Common Stock”),
representing fifty percent (50%) warrant coverage (the
“Warrants”). Subject to receipt of approval from the
Company’s senior secured convertible promissory note holders,
the Notes will be pari passu with the previously issued senior
secured convertible notes. The Notes were also included as part of
the Security Agreement, dated September 9, 2016, by and among the
Company and the investors listed therein, a copy of which was filed
as Exhibit 10.4 to the
Current Report on
Form 8-K filed with the Commission on September 12,
2016.
The Company intends to use the proceeds to meet
its payroll obligations and for other working capital purposes. For
further information regarding the Company’s liquidity,
reference is made to “Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations – Liquidity and Capital
Resources” and
“Note 1:Basis of Presentation and
General Information – Going Concern and
Liquidity” to the
Company’s financial statements contained in the quarterly
report on Form 10-Q for the period ended March 31,
2017.
The Company acknowledged that it was in default of
the Notes immediately upon issuance. As of August 21, 2017, the
aggregate value of the unpaid principal amount of the
Company’s senior secured convertible debt (which includes the
Notes), together with the accrued but unpaid interest, was
$11,210,696. As noted on August 16, 2017, the Company received a
foreclosure notice from the Secured Creditors that in order to
satisfy the outstanding secured indebtedness, they intended to sell
substantially all of the assets of the Company at an auction to
conclude August 31, 2017. There can be no assurances the Company
will be successful in obtaining a waiver of default from any of its
creditors or find a solution to its liquidity concerns. In the
event the Company cannot obtain a waiver from its creditors, the
value of the Company’s securities would decline
dramatically or become worthless.
Except
as described in this Current Report, the terms of the Notes and the
Warrants are materially similar to the terms of the convertible
promissory note and warrant described in the
Company’s Current Report on Form 8-K filed with the
Securities and Exchange Commission (the “Commission”)
on August 10, 2017.
The
Note and Warrant were issued and sold pursuant to exemptions from
the registration requirements of the Securities Act of 1933, as
amended, including Section 4(a)(2) thereof and Rule 506(b) of
Regulation D thereunder, as well as comparable exemptions under
applicable state securities laws, as transactions by an issuer not
involving a public offering.
Cautionary Note Regarding Forward-Looking Statements.
This
Current Report on Form 8-K contains forward-looking statements that
reflect management’s current views with respect to certain
future events and the Company’s prospects, operations,
performance and financial condition. Such forward-looking
statements speak only as of the date of this Report and the Company
will not be required to amend or update such statements at any time
in the future. Forward-looking statements include, but are not
limited to: the continued foreclosure proceedings on the
Company’s assets, the results of any sale of the
Company’s assets by the Company’s secured creditors at
an auction, the Company’s ability to obtain waivers of events
of default from its lenders; the availability of strategic
investors or buyers for the remaining assets of the Company’s
discontinued operations; and the results of any potential
restructuring activities. For all forward-looking statements, the
Company claims the protection of the Safe Harbor for
Forward-Looking Statements contained in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
inherently subject to risks and uncertainties, many of which cannot
be predicted with accuracy or are otherwise beyond the
Company’s control and some of which might not even be
anticipated. Future events and actual results could differ
materially from those described in or contemplated by the
forward-looking statements. Important factors that contribute to
such risks include, but are not limited to, successful execution of
the Company’s business plan, adequacy of capital resources,
and the Company’s ability to comply with, or obtain waivers
with respect to non-compliance with, the terms of its indebtedness.
The risks included are not exhaustive; for a more detailed
description of these uncertainties and other factors, see
“Item 1A. Risk Factors” in the Company’s Annual
Report on Form 10-K filed with the Commission on April 17,
2017.
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Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The
information disclosed in Item 1.01 of this Current Report on Form
8-K is incorporated by reference into this Item 2.03.
Item 2.04
Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
The
information disclosed in Item 1.01 of this Current Report on Form
8-K is incorporated by reference into this Item 2.04.
Item 3.02
Unregistered Sales of Equity Securities.
The
information disclosed in Item 1.01 of this Current Report on Form
8-K is incorporated by reference into this Item 3.02.
Item 8.01 Other Events.
On
August 22, 2017, the Company issued a press release announcing,
among other things, the events described above. A copy of the press
release is filed with this Current Report on Form 8-K as Exhibit
99.1.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits.
The
information set forth in the Exhibit Index immediately following
the signature page to this Current Report on Form 8-K is
incorporated by reference into this Item 9.01.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Company
has duly caused this Current Report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated:
August 22, 2017
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ROOT9B
HOLDINGS, INC.
By:
/s/ William
Hoke
Name:
William Hoke
Title:
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No.
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Description
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99.1*
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Press
Release dated August 22, 2017.
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* Filed herewith.
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