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EX-10.1 - MATERIAL CONTRACTS - Silver Falcon Mining, Inc.ex101.htm
EX-10.2 - MATERIAL CONTRACTS - Silver Falcon Mining, Inc.ex102.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):  April 5, 2011

SILVER FALCON MINING, INC.

(Exact name of registrant as specified in its charter)


Delaware

000-53765

26-1266967

(State or other jurisdiction of incorporation)

(Commission file number)

(I.R.S. Employer Identification Number)


7322 Manatee Avenue West, #299  

Bradenton, Florida 34209

 (Address of principal executive offices) (Zip Code)

 (941) 761-7819

 (Registrant's telephone number, including area code)

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:

|_| 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-4c))

 

 

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BUSINESS


Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “could”, "may", "will", "should", "expects", "plans”, "anticipates", "believes", "estimates", "predicts", "potential" or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.


Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results. The “Risk Factors” section of this Current Report on Form 8-K sets forth detailed risks, uncertainties and cautionary statements regarding our business and these forward-looking statements.

EXPLANATORY NOTE

  

This Current Report on Form 8-K is being filed in connection with the Company’s entry into of an equity financing agreement (the “Equity Line”).

This Current Report on Form 8-K responds to the following items of Form 8-K:

Item 1.01

Entry into a Material Definitive Agreement

Item 3.02

Unregistered Sales of Equity Interests

Item 9.01

Financial Statements and Exhibits

As used in this Current Report on Form 8-K and unless otherwise indicated, the terms the “Company,” “we,” “us,” and “our” refer to Silver Falcon Mining, Inc.


All dollar amounts in this report refer to U.S. dollars unless otherwise indicated.

  

Section 1 – Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement

The Company entered into an Investment Agreement with Centurion Private Equity, LLC (“Centurion”) on April 5, 2011.  Pursuant to the Investment Agreement, Centurion committed to purchase up to $7,200,000 of our common stock, over a period of time terminating on the earlier of: (i) 24 months from the effective date of a registration statement to be filed in connection therewith or (ii) 30 months from the date of the Investment Agreement (the “Line”), subject to an effective registration statement covering the resale of the common stock and subject to certain conditions and limitations set forth in the Investment Agreement, including limitations based upon the trading volume of the Company’s common stock. The maximum aggregate number of shares issuable by us and purchasable by Centurion under the Investment Agreement is $7,200,000 worth of stock.   

We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Investment Agreement.  The maximum amount that we are entitled to put in any one notice is such number of shares of Common Stock as equals $300,000 provided that the number of shares sold in each put shall not exceed a share volume limitation equal to the lesser of: (i) 2 million shares or (ii) 15.0% of the aggregate trading volume of the Common Stock, excluding any block trades that exceed 20,000 shares, traded on our primary exchange during any pricing period for such put excluding any days where the lowest intra-day trade price is less than the trigger price (which is the greater of: (i) the floor price if any set by us plus $.01; (ii) the floor price if any set by us divided by 0.97; or (iii) $.01, the greater of all three clauses being referred to as the “Trigger Price”).  The offering price of the securities to Centurion will equal the lesser of: (i) 97% of the market price of our Common Stock or (ii) the market price minus $0.01, but in no event shall be less than any floor price that we may set from time to time.  The “market price” of our Common Stock is the average of the three lowest daily volume weighted average prices (VWAP) of our Common Stock during a pricing period that begins the day after a put date and ends fifteen trading days later.  


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Logistically, the Investment Agreement provides that at least five business days but no more than ten business days prior to any intended put date, we must deliver an advance put notice to Centurion, stating the number of shares included in the put and the put date.  We are required to deliver to Centurion the shares covered by the put notice and certain opinions and certifications prior to the proposed put date.  The put pricing period begins the day after the put date and ends fifteen trading days later.   A put closing is held five days after the end of the put pricing period, at which time Centurion is required to deliver to us the purchase price for the put shares.  We may not deliver another put notice until at least five days after end of the pricing period for the prior put.

There are circumstances under which we will not be entitled to put shares to Centurion, including the following:

we will not be entitled to put shares to Centurion unless there is an effective registration statement under the Securities Act to cover the resale of the shares by Centurion;


we will not be entitled to put shares to Centurion unless our common stock continues to be quoted on the OTC Bulletin Board and has not been suspended from trading;


we will not be entitled to put shares to Centurion if an injunction shall have been issued and remain in force against us, or action commenced by a governmental authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the shares to Centurion;


we will not be entitled to put shares to Centurion if we have not complied with our obligations and are otherwise in breach of or in default under, the Investment Agreement, the Registration Rights Agreement or any other agreement executed in connection therewith with Centurion; and


we will not be entitled to put shares to Centurion to the extent that such shares would cause Centurion’s beneficial ownership to exceed 9.99% of our outstanding shares;

    

The Investment Agreement further provides that Centurion is entitled to customary indemnification from us for any losses or liabilities it suffers as a result of any breach by us of any provisions of the Investment Agreement or our registration rights agreement with Centurion, or as a result of any lawsuit brought by a third-party arising out of or resulting from Centurion's execution, delivery, performance or enforcement of the Investment Agreement or the registration rights agreement or from material misstatements or omissions in the prospectus accompanying the registration statement for the resale of the shares issued to Centurion.

The Investment Agreement also contains representations and warranties of each of the parties.  The assertions embodied in those representations and warranties were made for purposes of the Investment Agreement and are subject to qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Investment Agreement.  In addition, certain representations and warranties were made as of a specific date, may be subject to a contractual standard of materiality different from what a stockholder or investor might view as material, or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts.

 


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In connection with the preparation of the Investment Agreement and the registration rights agreement, we issued Centurion 136,147 shares of common stock as a document preparation fee having a value of $20,000 and 1,190,083 shares of common stock, having a value of $144,000 (2% of the Maximum Offering Amount”) as a commitment fee.

This description of the Investment Agreement with Centurion does not purport to be complete and is qualified in its entirety by reference to the Investment Agreement, which is attached as an exhibit hereto and incorporated by reference herein.

Section 3 – Securities and Trading Markets

Item 3.02 Unregistered Sales of Equity Securities

In connection with the Investment Agreement we issued an aggregate of no shares of our common stock to Centurion. These securities were issued in reliance on Section 4(2) of the Act.  The issuance did not involve any general solicitation or advertising by us. Centurion acknowledged the existence of transfer restrictions applicable to the securities sold by us. Certificates representing the securities sold contain a legend stating the restrictions on transfer to which such securities are subject.

Section 9 – Financial Statements and Exhibits

Item 9.01  Financial Statements and Exhibits

(a)

Financial Statements of businesses acquired:  Not applicable.

(b)

Pro forma financial information: Not applicable.

(c)

Shell company transactions:  Not applicable.

(d)

Exhibits:  

10.1

Investment Agreement with Centurion

10.2

Registration Rights Agreement with Centurion

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

SILVER FALCON MINING, INC.

Date: April 8, 2011

/s/ Pierre Quilliam

 

By: Pierre Quilliam, Chief Executive Officer




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