Attached files
| file | filename |
|---|---|
| EX-4.4 - INERGETICS INC | v166856_ex4-4.htm |
| EX-4.2 - INERGETICS INC | v166856_ex4-2.htm |
| EX-4.3 - INERGETICS INC | v166856_ex4-3.htm |
| EX-10.8 - INERGETICS INC | v166856_ex10-8.htm |
| EX-10.9 - INERGETICS INC | v166856_ex10-9.htm |
| EX-10.10 - INERGETICS INC | v166856_ex10-10.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):
November
10, 2009
MILLENNIUM
BIOTECHNOLOGIES GROUP, INC.
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
|
0-3338
|
22-1558317
|
|
(State
or Other Jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of
Incorporation)
|
File
Number)
|
Identification
No.)
|
665
Martinsville Road, Suite 219, Basking Ridge, NJ 07920
(Address
of Principal Executive Offices, including Zip Code)
Registrant's
telephone number, including area code: (908) 604-2500
Not
Applicable
(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 (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.
Private Placement of
Units
On
November 10, 2009, Millennium Biotechnologies
Group, Inc. (the “Company”), along with its wholly-owned subsidiary, Millennium
Biotechnologies, Inc. (the “Subsidiary”), raised $1,382,050 from the sale
of 13.8205 units (the “Units”), each Unit consisting of a Senior Secured 12%
thirty month $100,000 Note (a “Unit Note”) and 100 shares of the Company’s
Series F convertible preferred stock (the “Series F Preferred”) in a private
placement ( the “Private Placement”). It also converted a total of
approximately $3,220,000 of outstanding debt into an aggregate of 32.2
Units. The issuance of these securities was part of the Company’s
restructuring plan, and the securities were exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933, as amended.
The Unit
Notes have a term of 30 months and bear interest at the rate of 12% per
annum. Installments of principal and interest will commence on the
first business day of the calendar quarter following 18 months from November 10,
2009 and quarterly thereafter on the first business day of each calendar quarter
in fixed payments in the amount of $25,372 each until the maturity date, on
which date any remaining principal and interest shall be due and payable in
full. The Unit Notes are guaranteed by the Subsidiary and secured by
a first lien and security interest in all of the assets of the Company and the
Subsidiary.
Each
share of Series F Preferred is convertible, at the option of the holder, into
120,000 shares of the Company’s common stock (the “Conversion Rate”) if and when
the Company’s Certificate of Incorporation is amended to increase the number of
authorized shares of common stock so that there is a sufficient number of
authorized, but unissued and unreserved shares of common stock to permit the
conversion of all Series F Preferred and all Series E Preferred (discussed
below) into common stock (the “Amendment”). The Amendment will
require the approval of Company stockholders owning a majority of the issued and
outstanding shares of the Company’s stock. Each share of Series F
Preferred will automatically be converted into common stock at the Conversion
Rate after the Amendment is effected: (i) upon the written consent of the
holders of a majority of the outstanding Series F Preferred; or (ii) at such
time as the Company has achieved annual EBITDA of at least $10,000,000 for any
fiscal year of the Company. “EBITDA” means, for any period, net
income or loss of the Company and its subsidiaries before income or loss from
discontinued operations for such period, determined on a consolidated basis,
plus: (i) to the extent deducted in computing such consolidated net income or
loss, without duplication, an amount equal to the sum of: (1) income tax
expense, plus (2) interest expense, plus (3) depreciation and amortization
expense, plus (4) non-cash extraordinary or nonrecurring losses or non-recurring
expenses; minus (ii) to the extent added in computing such consolidated net
income or loss, without duplication, an amount equal to the sum of: (1)
extraordinary or non-recurring income or gains, plus (2) non-cash interest
income. Series F Preferred has no liquidation preference and no right
to receive dividends. Series F Preferred votes along with the holders
of the Company’s common stock on an “as if” converted basis on any matters on
which the holders of the Company’s common stock are entitled to vote. However,
until such time as the Company has achieved annual EBITDA of at least
$10,000,000, the consent of a the holders of a majority of the outstanding
shares of Series F Preferred, voting as a separate class, is required to
approve: (i) any offer, sale, designation or issuance of any security senior to
or pari passu with
Series F Preferred; (ii) the repurchase or redemption of capital stock of the
Company (except from employees at cost upon termination); (iii) any increase or
decrease in the number of authorized shares of common stock of the Company or
Series F Preferred (other than in connection with the Amendment); (iv) any
amendment to the Certificate of Incorporation or other governing documents of
the Company with the exception of the Amendment, a reverse split of outstanding
shares of common stock or a name change; (v) any alteration or change to the
rights, preferences or privileges of Series F Preferred, by merger,
consolidation or otherwise; (vi) the entry into: (1) the sale or exclusive
license of all or substantially all the assets of the Company, (2) mergers, (3)
consolidations, (4) other business combinations, (5) recapitalizations and (6)
liquidations; (vii) any acquisition of the stock or assets of any other entity;
(viii) any dividends or distributions on the Company’s capital stock; or (ix)
the expansion into any new businesses. The foregoing will apply to
any subsidiary or controlled affiliate of the Company. In addition,
Series F Preferred will be subject to anti-dilution protection, providing for
adjustments to the Conversion Rate upon certain events, including: (i)
subdivision or combination of common stock; (ii) dividends or distributions of
common stock; (iii) reclassification of the common stock into a security other
than the common stock; or (iv) consolidation or merger of the Company with or
into another corporation.
-2-
Tripoint
Global Equities, LLC acted as the placement agent and received fees equal to 10%
of the gross proceeds received from the sale of Units. It also
received shares of Series E Preferred Stock (“discussed below”) that convert
into an amount of the Company’s common stock equal to 10% of the number of
shares of the Company’s common stock issuable upon conversion of the Series F
Preferred Stock.
On
November 10, 2009, the Company also converted $7,361,747 of its debt into an
aggregate of approximately
22,014.96 shares of the Company’s Series E Preferred stock (the “Series E
Preferred”), which will convert into 210,335,615 common shares, as discussed
below.
Each
share of Series E Preferred automatically will convert into 10,000 shares of the
Company’s common stock if and when the Amendment is effected. Series
E Preferred has no liquidation preference, no right to receive dividends and
votes along with the holders of the Company’s common stock on an “as if”
converted basis on any matters on which the holders of the Company’s common
stock are entitled to vote. In addition, Series E Preferred will be
subject to anti-dilution protection providing for adjustments to the conversion
rate upon certain events relating to the Company, including: (i) subdivision or
combination of common stock; (ii) dividends or distributions of common stock;
(iii) reclassification of the common stock into a security other than the common
stock; or (iv) consolidation or merger of the Company with or into another
corporation.
On
November 11, 2009, the Company also issued an aggregate of 64,521,500 shares of
its common stock to certain individuals and entities, primarily for consulting
services rendered to the Company. These persons and entities included
the three first position secured creditors.
3
The
Private Placement was made pursuant to the exemption from the registration
provisions of the Securities Sct of 1933, as amended, provided by Section 4(2)
of the Securities Act and Rule 506 of Regulation D promulgated
thereunder. The securities issued have not been registered under the
Securities Act and may not be offered or sold absent registration or an
applicable exemption from the registration requirements.
The
foregoing information has been disclosed herein as it is material to the Private
Placement and should not be construed as an offer to sell or solication of an
offer to buy Company securities.
Ventiv
Agreements
The
Company and the Subsidiary entered into a Second Amendment to Security
Agreements and Convertible Promissory Note (the “Note Amendment”), a
Subordination Agreement (the “Subordination Agreement”) and a new Service
Agreement (“Service Agreement”) with Ventiv Commercial Services, LLC (“Ventiv”),
all of which were conditioned upon the making of certain payments to Ventiv from
the proceeds of the Company’s Private Placement. Pursuant to
the Note Amendment, in consideration of a payment in the amount of $110,000
Ventiv agreed to (i) a reduction in the principal and interest balance of the
Company‘s Note to Ventiv from $3,419,596 to $400,000, of which $150,000 is to be
paid in cash on or before February 1, 2010 and the remaining $250,000 of which
is to be paid in cash on or before June 1, 2010; and (ii) the subordination of
Ventiv’s security interest in all of the Company’s property and assets to the
security interest of the holders of the Unit Notes.
Under the
terms of the Service Agreement, Ventiv has agreed to market the Company’s
products to certain long term care providers. The Company prepaid a
total of $250,000 to Ventiv for the initial six months of service and is
required to make future prepayment installments of $250,000 periodically
thereafter upon the projected balance falling below $50,000. However,
the Company may opt out of the agreement in the event Ventiv does not produce
certain minimal sales requirements. The term of this Agreement ends
following the third anniversary of Ventiv commencing services
thereunder.
Item
3.02 Unregistered
Sales of Equity Securities.
The
information disclosed under Item 1.01 under the heading “Private Placement of
Units” is incorporated by reference in this Item.
Item
9.01. Financial Statements
and Exhibits.
(c)
Exhibits:
|
4.2
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Form
of Unit Note
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4.3
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Form
of Series E Preferred Stock Certificate
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4.4
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Form
of Series F Preferred Stock Certificate
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10.8
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Ventiv
Subordination Agreement
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10.9
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Second
Amendment to Ventiv Security Agreements and Convertible
Note
|
|
10.10
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Ventiv
Service Agreement
|
4
Signatures
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Date: November
17, 2009
|
MILLENNIUM
BIOTECHNOLOGIES GROUP, INC.
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|
|
By:
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/s/ Mark C. Mirken
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Mark
C. Mirken, CEO
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|
5