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): August 29, 2012
Heavy Earth Resources, Inc.
(Exact name of registrant as specified in Charter)
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Florida
(State or other jurisdiction
of incorporation)
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000-52979
(Commission
File Number)
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75-3160134
(IRS Employer
Identification No.)
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625 Second Street, #280, San Francisco, California
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94107
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (415) 813-5079
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-4(c))
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Item 1.01 Energy into a Material Definitive Agreement.
On August 29, 2012, Heavy Earth Resources, Inc. (the “Registrant”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with two investors (each a “Purchaser” and, collectively, the “Purchasers”) providing for the issuance and sale by the Registrant to the Purchasers of an aggregate principal value of $1,000,000 of a 6% senior convertible debenture (the “Debentures”) and common stock purchase warrants to purchase an aggregate of 1,666,667 shares of the Registrant’s Common Stock (the “Warrants” and the shares issuable upon exercise of the Warrants, collectively, the “Warrant Shares”), in exchange for the aggregate purchase price of approximately $1,000,000.
The Debentures will become due and payable three years from August 29, 2012, the date of issuance. The Debentures may be converted at any time at the option of the Purchasers into shares of the Registrant’s common stock at a conversion price of $0.60 per share (the “Conversion Price”). The Debentures bear interest at the rate of 6% per annum increasing to 12% per annum on December 31, 2012 in the event that the Registrant has not consummated a primary public offering of its securities with gross proceeds of at least $6,000,000 on or before December 31, 2012, further increasing to 15% per annum on January 15, 2013 in the event the Registrant’s common stock is not listed for trading on the Nasdaq Capital Market or the Nasdaq Global Market by January 15, 2013, and finally increasing to 18% in an event of default. Interest is payable quarterly payable in cash and may be payable in shares of the Registrant’s common stock if certain conditions are met, including but not limited to, the condition that the Registrant is not in default and the daily trading volume for the Registrant’s common stock exceeds 25,000 shares per trading day. The Debentures also provide the Registrant with the option to redeem the Debentures at 115% of the outstanding principal together with any accrued but unpaid interest at any time if certain conditions are met.
The Warrants grant the each Purchaser the right to purchase up to a number of shares of Common Stock equal to 100% of the shares underlying the principal amount of the Debentures issued to each respective Purchaser, have an exercise price of $0.85 per share, are exercisable immediately upon issuance and have a term of exercise of five years from August 29, 2012, the date of issuance.
The securities sold pursuant to the Securities Purchase Agreement have not been registered under the Securities Act of 1933 (the “Securities Act”) and have been issued under an exemption from the registration requirements of the Securities Act afforded by Section 4(2) thereof and Rule 506 of Regulation D. The securities may not be offered or sold in the United States in the absence of an effective registration statement or exemption from applicable registration requirements.
In connection with the Securities Purchase Agreement, each of the Registrant’s subsidiaries, Deep Core Inc., DCX, S.A.S., and Deep Core (Barbados) Inc. (collectively, the “Subsidiaries”), entered into a Subsidiary Guarantee dated August 29, 2012 (the “Subsidiary Guarantee”), pursuant to which the Subsidiaries jointly and severally guaranteed to the Purchasers and their respective successors and assigns, the prompt and complete repayment of the Debenture.
On August 29, 2012, in connection with the Securities Purchase Agreement, the Registrant and the Purchasers entered into a Registration Rights Agreement (the “Registration Rights Agreement”). Under the Registration Rights Agreement, the Registrant is required to file a registration statement (the “Registration Statement”) within 45 days following such closing to register the resale of the shares underlying the Debentures and the Warrant Shares. The failure on the part of the Registrant to meet the filing deadlines and other requirements set forth in the Registration Rights Agreement may subject the Registrant to payment of monetary penalties.
On August 29, 2012, in connection with the Securities Purchase Agreement and Registration Rights Agreement, the Registrant and ten holders of an aggregate of 6,978,518 shares of the Registrant’s common stock entitled to registration rights (the “Prior Rights Holders”) entered into a Registration Rights Priority Waiver (the “Waiver”) pursuant to which each Prior Rights Holder waived their priority of registration rights granted by their respective registration rights agreements, such that in the event of a cut-back of registrable shares of the Registrant’s common stock in the Registration Statement by the Securities and Exchange Commission, the Purchasers’ registration rights will have priority over the Prior Rights Holders.
The foregoing description of the Securities Purchase Agreement, the Debentures, the Warrants, the Registration Rights Agreement and the Subsidiary Guarantee is only a summary of the material terms of each document and is qualified in its entirety by reference to the full text of each document. Copies of the Form of Securities Purchase Agreement, the Form of Debenture, the Form of Warrant, the Form of Registration Rights Agreement, and Form of Subsidiary Guarantee are attached as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.
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Item 3.02 Unregistered Sales of Equity Securities.
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The information set forth in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.02 in its entirety. On August 29, 2012, the Registrant issued the Debentures and Warrants to the Purchasers. The Debentures and Warrants are being offered and sold pursuant to an exemption from the registration requirements under Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. The shares to be issued upon conversion of the Debentures and exercise of the Warrants have not been registered under the Securities Act and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed with this report on Form 8-K.
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Exhibit Number
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Description of Exhibit
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
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Heavy Earth Resources, Inc.
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Date: September 4, 2012
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By:
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/s/ Grant Draper
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Grant Draper
President and Chief Executive Officer
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