China Industrial Waste Management Inc. - Current report filing (8-K)
03 Settembre 2008 - 10:53PM
Edgar (US Regulatory)
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):
September 3, 2008 (August 27, 2008)
China
Industrial Waste Management, Inc.
(Exact
name of registrant as specified in its charter)
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Nevada
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002-95836-NY
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13-3250816
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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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China
Industrial Waste Management, Inc.
c/o
Dalian Dongtai Industrial Waste Treatment Co., Ltd
No.
1
Huaihe West Road
E-T-D-Zone,
Dalian, China 116600
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code: 011-86-411-85811229
N/A
(Former
Name and Address if changed since the 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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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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
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Entry
into Material Definitive
Agreement.
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On
August
27, 2008, we entered into identical subscription agreements with seven investors
in connection with the transactions described under Item 3.02 of this Current
Report.
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Item
3.02
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Unregistered
Sales of Equity
Securities.
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On
August
27, 2008, we sold an aggregate of 51 units of our securities to a group of
institutional and accredited investors lead by Ancora Greater China Fund, in
transactions exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”) in reliance on exemptions provided by Section
4(2) and Rule 506 of Regulation D of the Securities Act. Each unit was sold
for
a purchase price of $60,000 and consisted of (a) 20,000 shares of our common
stock, (b) one Class A common stock purchase warrant to purchase 10,000 shares
of our common stock until September 30, 2011, at an exercise price of $3.50
per
share, and (c) one Class B common stock purchase warrant to purchase 10,000
shares of our common stock until September 30, 2011, at an exercise price of
$4.50 per share. We issued the units pursuant to the terms of the subscription
agreements referred to in Item 1.01 of this Current Report.
In
connection with our sale of the units:
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·
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we
received gross proceeds of $3,060,000 which we intend to use primarily
to
construct new facilities, for professional fees and for working
capital,
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·
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Dong
Jinqing, our president agreed to place 333,333 shares of our common
stock
owned by him into escrow pending our results of operations for the
fiscal
years ending December 31, 2008 and 2009; at which time the shares
will be
disbursed (i) to Mr. Dong to the extent that we meet the financial
performance criteria set forth in the escrow agreement or (ii) to
the
investors, pro-rata, in the event we do not meet such
criteria,
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·
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we
agreed to file a registration statement with the SEC to permit the
investors to resell the common stock included in their units and
to pay
the investors liquidated damages at the rate of 1% of the amount
of their
investment per month, up to a maximum of 10%, to the extent the
registration statement is not timely filed or diligently
pursued,
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·
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we
agreed to establish a board of directors, a majority of whose members
will
be “independent” within the meaning of Nasdaq Marketplace Rule 4200(15);
and
$650,000
from the proceeds we received will be held in escrow until this
requirement is satisfied
,
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·
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we
agreed to engage an accounting consultant to
assist
us with the presentation and delivery of financial reports and related
information
;
and
$100,000
from the proceeds we received will be held in escrow until this
requirement is satisfied, and
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·
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our
executive officers agreed not to sell any of our securities which
they own
or may acquire, for a period of one year from the effective date
of the
resale registration statement to be filed by
us.
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As
compensation for their services we paid the placement agent a commission equal
to 7% of the gross proceeds received from the investors ($214,200), a
non-accountable expense allowance equal to 2% of the gross proceeds ($61,200),
and $10,000 in legal fees of the placement agent’s counsel and we agreed to
issue to the placement agent, warrants to purchase units identical to the units
sold to the investors, on the basis of warrants to purchase one unit for each
ten units sold to investors, exercisable until September 30, 2011 at an exercise
price equal to 120% of the unit price paid by investors. Subject to the sale
of
45 units, we also agreed to issue the placement agent 150,000 shares of our
common stock and five-year warrants to purchase an aggregate of 300,000 shares
of common stock, exercisable at prices ranging from $3.50 per share to $5.00
per
share. The placement agent has also entered into an agreement whereby they
have
agreed not to seek registration of our equity securities issuable to them,
and
to limit their resale of those securities. Contemporaneous with the offering,
the Company and the placement agent entered into an amendment to their Business
Advisory Agreement dated February 4, 2008, which extended the term of the
Business Advisory Agreement until May 4, 2009 and in which the placement agent
waived its receipt of the equity compensation component under the Business
Advisory Agreement (other than 50,000 shares of common stock which had
previously been issued to the placement agent).
We
had
reasonable grounds to believe that each investor was an "accredited investor"
within the meaning of Rule 501 of Regulation D. In addition, each investor
was
provided access to business and financial about us and represented that it
had
such knowledge and experience in business and financial matters that it was
able
to evaluate the risks and merits of an investment in the units. Each certificate
evidencing securities issued to the investors included a legend to the effect
that the securities were not registered under the Securities Act of 1933 and
could not be resold absent registration or the availability of an applicable
exemption from registration. No general solicitation or advertising was used
in
connection with the transactions.
In
addition, effective September 1, 2008, we entered into an agreement with Hayden
Communications International, Inc. to provide us with investor relations and
related services for a period of one year in consideration for which we have
agreed to pay Hayden a fee equal to $9,000 per month and issue Hayden 6,000
shares of our unregistered common stock per quarter (and 6,000 shares contingent
upon the occurrence of certain events described in the agreement).
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Item
9.01
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Financial
Statements and Exhibits
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(d)
Exhibits
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Exhibit
No.
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Description
of Exhibit
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10.1
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Form
of Subscription Agreement
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10.2
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Form
of Common Stock Purchase Warrant
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10.3
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Placement
Agency Agreement dated August 27,
2008
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SIGNATURES
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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By:
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/s/
Dong
Jinqing
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Name:
Dong
Jinqing
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Title:
Chief Executive
Officer
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Date:
September 3, 2008
EXHIBIT
INDEX
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Exhibit
No.
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Description
of Exhibit
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10.1
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Form
of Subscription Agreement
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10.2
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Form
of Common Stock Purchase Warrant
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10.3
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Placement
Agency Agreement dated August 27,
2008
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