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) JULY 12, 2011
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC
(EXACT NAME OF COMPANY AS SPECIFIED IN ITS CHARTER)
FLORIDA 000-30392 13-4172059
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(STATE OR OTHER JURISDICTION) (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION)
335 CONNIE CRESCENT, CONCORD, ONTARIO, CANADA L4K 5R2
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (905) 695-4142
N/A
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(Former name or former address, if changed since last report)
|_| Written communication 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 40.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The information called for by this Item 1.01 is incorporated herein by reference
to Item 3.02 of this report.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
The information called for by this Item 1.02 is incorporated herein by reference
to Item 3.02 of this report.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
As previously disclosed, Environmental Solutions Worldwide, Inc. (the "Company")
conducted a rights offering to its existing stockholders, whereby each
stockholder of record, as of the close of business on June 9, 2011, received one
subscription right for each share of common stock, par value $0.001, of the
Company ("Common Stock") which entitled such stockholder to purchase 0.51494
shares of Common Stock at a subscription price of $0.12 per share (the "Rights
Offering"). The subscription rights under the Rights Offering expired on June
30, 2011. In connection with the Rights Offering, the Company entered an
Investment Agreement, dated May 10, 2011 (the "Investment Agreement"), with
Orchard Investments, LLC; Black Family 1997 Trust; Leon D. Black, UAD 11/30/92
FBO Alexander Black; Leon D. Black, UAD 11/30/92 FBO Benjamin Black; Leon D.
Black, UAD 11/30/92 FBO Joshua Black; Leon D. Black, UAD 11/30/92 FBO Victoria
Black; Leon D. Black; John J. Hannan and Richard Ressler (each individually a
"Bridge Lender" and collectively the "Bridge Lenders"). Pursuant to the
Investment Agreement, the Bridge Lenders agreed to provide a backstop commitment
on the Rights Offering.
The Bridge Lenders are stockholders of the Company and were subordinated lenders
under unsecured promissory notes in the aggregate amount of $4.0 million with
the Company entered into on February 17, 2011 and April 27, 2011 (the "Notes").
The maturity date of the Notes was the earlier of: (1) the consummation of a
rights offering which permitted all Bridge Lenders to exchange their Notes (and
the other notes paid in-kind for the payment of interest under the Notes) for
shares of Common Stock at $0.12 per share and (2) July 15, 2011.
Under the Rights Offering, the Bridge Lenders subscribed for 23,228,970 shares
of Common Stock at a price of $0.12 per share, which was paid for through the
exchange of principal and accrued interest on the Notes of approximately $2.8
million. Pursuant to backstop commitment, the Bridge Lenders purchased
27,714,385 shares of Common Stock at price of $0.12 per share for approximately
$3.3 million, of which $2.0 million was paid in cash and $1.3 million was paid
for through the exchange of the balance of principal and accrued interest due on
the Notes. As a result of these transactions, the Company satisfied its
obligations with respect to the Notes and the Notes were cancelled.
Proceeds of these transactions will be used by the Company to fund working
capital and repayment of indebtedness.
Further, as previously disclosed, pursuant to certain securities subscription
agreements the Company entered into on (i) March 23, 2010 for 9% convertible
debentures and (ii) November 9, 2010 and December 8, 2010 for units comprised of
common stock and warrants to purchase shares of common stock (collectively the
"Prior Subscription Agreements") the investors under the Prior Subscription
Agreements were granted certain anti-dilution rights which by agreements entered
into on or about February 17, 2011 (the "Anti-dilution Agreements") were
extended through to the closing of Rights Offering and the consummation of the
transactions under the Investment Agreement. The closing of the Rights Offering
and the consummation of the transactions under the Investment Agreement resulted
in the Company issuing 22,500,000 additional shares of common stock collectively
to the investors under the Anti-dilution Agreements.
The transactions with the Bridge Lenders under the Rights Offering and the
Investment Agreement as well as the investors under the Anti-dilution Agreements
were made in reliance on an exemption from the registration requirements of the
Securities Act of 1933 contained in Section 4 (2) thereof, and the shares of
Common Stock issued to the Bridge Lenders pursuant to the Rights Offering and
Investment Agreement as well as the investors under the Anti-dilution Agreements
were not covered by a registration statement filed pursuant to the Securities
Act of 1933.
As a condition to closing the Investment Agreement, the Company entered into a
registration rights agreement with the Bridge Lenders effective July 12, 2011
(the "Registration Rights Agreement"). The Registration Rights Agreement
provides the Bridge Lenders with certain customary registration rights, which
include demand and "piggyback" registration rights under the Securities Act of
1933 with respect to the shares of Common Stock purchased under the Investment
Agreement and any other securities owned by the Bridge Lenders.
The foregoing summary of the Investment Agreement and Registration Rights
Agreement do not purport to be complete and are subject to and qualified in its
entirety by reference to the actual text of such documents, a copy of the
Investment Agreement is attached to the Company's Form 8-K filed with the
Securities and Exchange Commission May 10, 2011 as Exhibit 10.1 and a copy of
the Registration Rights Agreement which is attached hereto as Exhibit 10.1 are
incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No Description
10.1 Registration Rights Agreement entered into on July 12, 2011 by and among
the Company and the Bridge Lenders.
SIGNATURES
Pursuant to the requirement 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.
ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
Date: July 15, 2011
By: /S/ Mark Yung
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Mark Yung
Executive Chairman