Attached files
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): October 29, 2009
LONGWEI
PETROLEUM INVESTMENT
HOLDING
LIMITED
(Exact
name of registrant as specified in its charter)
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Colorado
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000-31751
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84-1536518
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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No.30
Guanghua Street, Xiaojingyu Xiang, Wanbailin District
Taiyuan
City, Shanxi Province, China P.C. 030024
(Address
of principal executive offices and Zip Code)
Registrant's
telephone number, including area code (617) 209-4199
Copies
to:
Darrin M.
Ocasio, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway, 32nd Floor
New York,
NY 10006
Telephone:
(212) 930-9700
Fax:
(212) 930-9725
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 (see General
Instruction A.2. below):
[ ]
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 October 29, 2009, Longwei Petroleum
Investment Holding Limited (the “Company”) entered in a Securities Purchase
Agreement with certain accredited investors (the “Investors”) (the “Purchase
Agreement”) pursuant to which the Company issued and sold 13,499,274 of its
newly designated Series A Convertible Preferred Stock (the “Series A Preferred
Stock”) and warrants (the “Warrants”) to purchase an aggregate of 13,499,274
shares of the Company’s common stock for an aggregate purchase price of
$14,849,201.50 (the Warrants and, together with the Series A Preferred Stock,
the “Private Placement Securities”). National Securities Corporation
acted as the lead placement agent on the private placement.
In connection with the transaction, the
Company also entered into a registration rights agreement (the “Registration
Rights Agreement”) with the Investors. The Registration Rights
Agreement provides that the Company will file a “resale” registration statement
(the “Initial Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) covering all of the Private Placement Securities within
60 days from the date of the closing of the transaction. If any of
the Private Placement Securities are unable to be included on the Initial
Registration Statement, the Company has agreed to file subsequent registration
statements until all of the Private Placement Securities have been
registered.
The
Series A Preferred Stock is convertible into shares of the Company’s common
stock based on a one to one conversion ratio, at an initial conversion
price of $1.10 per share, subject to adjustment. The holders of the
Company’s Series A Preferred Stock do not have voting rights except as required
by Colorado law. In addition, so long as any shares of Series A
Preferred Stock are outstanding, the Company cannot, without the written consent
of the holders of 75% of the then outstanding Series A Preferred Stock: (i)
alter or change adversely the powers, preferences or rights given to the Series
A Preferred Stock or alter or amend this Certificate, (ii) authorize or create
any class of stock ranking as to dividends or distribution of assets upon a
Liquidation (as defined in the certificate of designation) senior to or
otherwise pari passu with the Series A Preferred Stock, or any series of
preferred stock possessing greater voting rights or the right to convert at a
more favorable price than the Series A Preferred Stock, (iii) amend its
certificate of incorporation or other charter documents in breach of any of the
provisions hereof, (iv) increase the authorized number of shares of Series A
Preferred Stock or the number of authorized shares of Preferred Stock, or (v)
enter into any agreement with respect to the foregoing. In the event
of the liquidation, dissolution or winding up of the Company, The holders of the
Company’s Series A Preferred Stock shall be entitled to be paid out of the
assets of the Company available therefore, an amount in cash equal to $1.10 per
share of Series A Preferred Stock plus accrued and unpaid
dividends. No distribution shall be made on any junior securities by
reason of any liquidation of the Company unless each holder of Series A
Preferred Stock shall have received all amounts in full to which such holder
shall be entitled. The Series A Preferred Stock holders shall be entitled to
receive dividends payable at the rate of 6% of the Liquidation Price (which is
defined as $1.10) payable quarterly. The Series A Preferred Stock
also contains limitations on exercise, including the limitation that the holders
may not convert their shares to the extent that upon exercise the holder,
together with its affiliates, would own in excess of 4.9% of the Company’s
outstanding shares of common stock.
The
Warrants are exercisable for a term of three years at an exercise price of
$2.255 per share. The Warrants also contain anti-dilution provisions,
including but not limited to, if the Company issues shares of its common stock
at less than the then existing conversion price, the conversion price of the
Warrants will automatically be reduced to such lower price and the number of
shares to be issued upon exercise will be proportionately
increased. The Warrants contain limitations on exercise, including
the limitation that the holders may not convert their Series A Warrants to the
extent that upon exercise the holder, together with its affiliates, would own in
excess of 4.9% of the Company’s outstanding shares of common stock.
Additionally, as further consideration
for the transaction, the Company, along with the Investors, entered into a make
good escrow agreement (the “Make Good Escrow Agreement”) with certain insiders
of the Company who placed an aggregate of 13,499,274 shares of the Company’s
common stock into escrow (the “Escrow Shares”), to be distributed if certain
financial milestones of the Company are not met. Pursuant to the
terms of the Make Good Escrow Agreement, if the After Tax Net Income reported in
the Company’s 2010 Annual Report is less than $23,900,000 (subject to certain
exclusions) (the “2010 Guaranteed ATNI), then the Investors shall be
entitled to receive on a “pro rata” basis (determined by dividing each Investor’s investment
amount by the aggregate of all investment amounts delivered to the Company by
the Investors under the Agreement) for no consideration other than their part of
their respective Investment Amount at Closing, some or all of the Escrow
Shares determined according to the following formula:
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E
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Minus
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C
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((A
/ B) X D)
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For the
purposes of the foregoing formula:
A =
Actual ATNI 2010
B = 2010
Guaranteed ATNI ($23,900,000)
C =
Escrow Shares (13,499,274)
D =
Initial Conversion Price of Series A Preferred Stock ($1.10)
E = Total
Investment Amount ($14,849,201.50)
The
foregoing is not a complete summary of the terms of the private placement
described in this Item 1.01 and reference is made to the complete text of the
form of Purchase Agreement, form of Registration Rights Agreement, form of
Certificate of Designation of the Series A Preferred Stock, form of Warrant and
the form of Make Good Escrow Agreement attached hereto as Exhibits 10.1, 10.2,
10.3, 10.4 and 10.5, respectively.
Item
3.02 Unregistered Sale of Equity Securities
As described in Item 1.01 above, which
information that is required to be disclosed under this Item 3.02 is hereby
incorporated by reference into this Item, on October 29, 2009, the Company
issued and sold 13,499,274 shares of its Series A Preferred Stock and Warrants
to purchase an aggregate of 13,499,274 shares of the Company’s common stock to
certain accredited investors. In connection with the issuance of the Private
Placement Securities, National Securities Corporation and Moody Capital received
warrants (the “Placement Agent Warrants”) to purchase up to an aggregate
of 1,349,927 shares of the Company’s common stock at an exercise
price of $2.255. The Series A Preferred Stock, the Warrants and the
Placement Agent Warrants were all sold and/or issued only to “accredited
investors,” as such term is defined in the Securities Act of 1933, as amended
(the “Securities Act”), were not registered under the Securities or the
securities laws of any state, and were offered and sold in reliance on the
exemption from registration afforded by Section 4(2) and Regulation D (Rule 506)
under the Securities Act and corresponding provisions of state securities laws,
which exempt transactions by an issuer not involving any public
offering.
Item 9.01. Financial Statements and
Exhibits.
(d) Exhibits.
10.1 Form
of Securities Purchase Agreement
10.2 Form
of Registration Rights Agreement
10.3 Form
of Series A Convertible Preferred Stock Certificate of Designation
10.4 Form
of Common Stock Purchase Warrant
10.5 Form
of Make Good Escrow Agreement
99.1 Press
Release
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.
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LONGWEI
PETROLEUM INVESTMENT HOLDING LIMITED
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Dated:
November 2, 2009
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/s/ Cai Yongjun
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Name:
Cai Yongjun
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Title:
Chief Executive Officer
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