Ive been trying to find info about this today and I came across this. Itro is going to be BIG
Form 8-K for ITRONICS INC
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4-Apr-2008
Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligatio
Item 1.01: Entry into a Material Definitive Agreement
On March 31, 2008 the Company entered into the material agreements described under Item 3.02 below.
Item 2.03: Creation of a Direct Financial Obligation
On March 31, 2008 the Company entered into agreements that create material direct financial obligations. The agreements are more fully described under Item 3.02 below.
Item 3.02 Unregistered Sales of Securities
Section 1:
On March 31, 2008, the Company entered into a Securities Purchase Agreement with three accredited investors (the "Investors"
for an aggregate amount of (i) $310,000 in secured convertible notes, and (ii) warrants to purchase 10,000,000 shares of the Company's common stock (the "Financing"
. The Company anticipates that the proceeds of the Financing will be used to advance its eight part business plan which was summarized in its press release issued by the Company on June 3, 2005. The Financing will provide working capital to expand GOLD'n GRO fertilizer sales, EPA registration of the GOLD'n GRO Guardian deer repellant fertilizer, certain capital improvements to expand production capacity, and payment of existing debt obligations.
The Financing was made in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D as promulgated by the United States Securities and Exchange Commission under the Securities Act of 1933, as amended.
The Financing was completed in one closing. The closing consisted of gross proceeds of $310,000, less financing costs of $10,000, for net proceeds of $300,000.
The Investors received three year convertible notes (the "Notes"
bearing simple interest at 8% per annum. The Notes are convertible into the Company's common stock at a price equal to the lesser of (i) $0.10 or (ii) 35% of the average of the lowest 3 trading prices during the 20 trading day period ending one trading day before the conversion date. In addition, we granted the Investors a further security interest in substantially all of our assets, including the assets of our wholly owned subsidiaries, and intellectual property.
The parties entered into a Registration Rights Agreement whereby we may be
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required to file a registration statement with the Securities and Exchange Commission within 10 days of written demand, registering the common stock underlying the secured convertible notes and the warrants. If the registration statement is not declared effective within 90 days from the filing date, we are required to pay liquidated damages to the investors. In the event that we breach any representation or warranty in the Securities Purchase Agreement, we may be required to pay liquidated damages in shares or cash, at our election, equal to two percent of the outstanding principal amount of the secured convertible notes per month plus accrued and unpaid interest.
The Investors received seven year warrants to purchase a total of 10,000,000 common shares of the Company at a purchase price of $0.0001 per share.
Other than under these Agreements and under certain specified circumstances, should we issue shares of common stock below the market price, the exercise price of the warrants will be reduced accordingly.
The conversion price of the secured convertible notes and the exercise price of the warrants may be adjusted in certain circumstances such as if we pay a stock dividend, subdivide or combine outstanding shares of common stock into a greater or lesser number of shares, or take such other actions as would otherwise result in dilution of the selling stockholder's position.
The Investors have agreed to restrict their ability to convert their secured convertible notes or exercise their warrants and receive shares of our common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.9% of the then issued and outstanding shares of common stock.
The Company paid a finder's fee of 8% of the gross proceeds.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"
, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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Item 9.01 Financial Statements and Exhibits
Exhibits:
10.1 Securities Purchase Agreement dated March 28, 2008, by and among
Itronics
Inc. and the investors named on the signature pages thereto.
10.2 Callable Secured Convertible Note dated March 28, 2008.
10.3 Callable Secured Convertible Note dated March 28, 2008.
10.4 Callable Secured Convertible Note dated March 28, 2008.
10.5 Stock Purchase Warrant dated March 28, 2008.
10.6 Stock Purchase Warrant dated March 28, 2008.
10.7 Stock Purchase Warrant dated March 28, 2008.
10.8 Registration Rights Agreement dated March 28, 2008, by and among
Itronics
Inc. and the investors named on the signature pages thereto.
10.9 Security Agreement dated March 28, 2008
10.10 Subsidiary Guarantee dated March 28, 2008
10.11 Intellectual Property Security Agreement dated March 28, 2008
