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SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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FORM
8-K/A
(Amendment
No. 1)
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Current
Report
Pursuant
to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
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Date
of Report (Date of Earliest Event Reported)
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July
10, 2008
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MRU
Holdings, Inc.
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(Exact
Name of Registrant as Specified in
its Charter)
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Delaware
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(State
or Other Jurisdiction of Incorporation)
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001-33073
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33-0954381
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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590
Madison Avenue, 13
th
Floor
New
York, New York
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10022
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(212)
398-1780
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(Registrant’s
Telephone Number, Including Area Code)
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last Report)
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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.):
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o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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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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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Explanatory
Note
MRU
Holdings, Inc. (the “Company”) is filing an amendment (the “8-K/A”) to its
Current Report on Form 8-K filed with the Securities and Exchange Commission on
July 16, 2008 (the “Original 8-K”) to correct two typographical errors contained
in Item 1.01 of the Original 8-K. Item 1.01 of the Original 8-K incorrectly
stated the interest rate of the Non-ML Notes and the July 15th Note (as such
terms are defined in the Original 8-K). Such information has been corrected in
this 8-K/A. Except as noted above, no information in the Original 8-K
has been changed.
Item
1.01 Entry
into a Material Definitive Agreement.
On July
10, 2008, the Company, in exchange for a payment of $7,750,000 in cash, issued,
in a private placement transaction (the “ML Private Placement”), a convertible
promissory note (the “ML Note”) in the original aggregate principal
amount of $7,750,000 to Merrill Lynch Mortgage Capital Inc. (“ML”).
The ML
Note will accrue interest on the unpaid principal amount at a simple annual
interest rate of nine percent (9%) per annum up to, but not including, September
27, 2008 (the “Alternate Interest Rate Date”) and at a simple annual interest
rate of twelve percent (12%) per annum from and after the Alternative Interest
Rate Date until paid in full;
provided, however
that no
interest shall be due prior to the Maturity Date (as defined below) unless the
Senior Indebtedness (as defined in the ML Subordination Agreement defined below)
has been paid in full at which point interest on the ML Note will be payable on
the 15
th
day of
January, April, July and October. Unless earlier converted as described below,
the ML Note is due on October 31, 2010 (the “Maturity
Date”). Repayment of the ML Note is subject to the limitations
contained in the ML Subordination Agreement (defined below), the terms of which
are summarized below.
If the
Company sells equity securities (the “Equity Securities”) in the future pursuant
to an equity financing (including the issuance of Equity Securities upon the
conversion or exchange of debt securities (the “Automatically Converting Debt
Securities”) issued in connection with an equity financing) in which the Company
receives in excess of a minimum threshold amount of gross proceeds agreed to by
the Company and ML and the Investors (as defined below) (the “Equity
Financing”), then the outstanding principal amount of the ML Note together with
the accrued but unpaid interest will be mandatorily prepaid subject to certain
conditions contained in the ML Subordination Agreement and the ML
Note. Subject to the Subordination Agreement, the ML Note may be
prepaid without premium or penalty at the Company’s option on ten days prior
notice to ML.
If the ML
Note is not repaid in connection with an Equity Financing as described above or
otherwise repaid by the Alternate Interest Rate Date, then ML will have the
option to convert the outstanding principal of and accrued and unpaid interest
on the ML Note into shares of the Company’s common stock (the “Common Stock”) at
a conversion price of $2.25 per share;
provided
,
however
, that ML will not
have the right to convert the principal of or accrued and unpaid interest on the
ML Note in excess of that portion of the principal and accrued interest that,
upon giving effect to such conversion, would cause the aggregate number of
shares of
Common
Stock beneficially owned by ML and its affiliates to exceed 19.99% of the voting
power of the Company following such conversion or issuance of shares (the
“Issuance Limitation”),
unless
the Company’s
stockholders approve any “change of control” (as defined under NASDAQ
Marketplace Rule 4350(i)(1)(B)) that would result from such conversion, in which
case the Issuance Limitation would not apply. The ML Note also
contains customary events of default, which include, among other things, the
occurrence of a default on payment of principal when due, a default on the
payment of interest for 30 days, bankruptcy or the default on $500,000 or more
in other indebtedness.
On July
10, 2008, in connection with the issuance of the ML Note, the Company became a
party to a subordination agreement with ML, a senior secured lender to the
Company (the “Senior Lender”) and the collateral agent (the “Collateral Agent”)
to the Senior Lender (the “ML Subordination Agreement”). Pursuant to
the ML Subordination Agreement, among other things, (i) ML agreed that the
payment of any indebtedness under the Note would be subordinated to the payment
in full of the Senior Indebtedness (as defined in the ML Subordination
Agreement) and (ii) the Company agreed not to take any action that would
frustrate the purposes of the subordination of the Note to the Senior
Indebtedness. Notwithstanding the foregoing, the issuance of Common
Stock of the Company to ML upon the optional conversion of the ML Note as
described above will not be deemed a violation of the ML Subordination Agreement
or the documents evidencing the Senior Indebtedness.
On July
10, 2008, the Company also entered into a note and warrant purchase agreement
(the “July 10
th
Purchase Agreement”), by and among the Company, Battery Ventures VII, L.P.,
Battery Investment Partners VII, LLC and a non-affiliated investor listed on the
Investor Schedule attached thereto (each, a “July 10
th
Investor” and collectively, the “July 10
th
Investors”) pursuant to which, in exchange for a payment of $4,000,000 in cash,
the Company issued, in a private placement transaction (the “July 10th Private
Placement”): (i) promissory notes in the original aggregate principal
amount of $5,000,000 (the “Original Principal Amount”) (collectively, the
“Non-ML Notes” and, together with the ML Note, the “Notes”) and (ii) warrants to
purchase in the aggregate 2,222,222 shares of Common Stock at an exercise price
of $2.25 per share (the “July 10
th
Warrants”). The Non-ML Notes and the July 10th Warrants are described
in greater detail below. The July 10
th
Purchase Agreement contains standard representations, and warranties and
affirmative and negative covenants.
The
Non-ML Notes will accrue interest on the unpaid principal amount at a simple
annual interest rate of eighteen percent (18%) per annum
provided, however
, the
Original Principal Amount of the Non-ML Notes shall increase by twenty percent
(20%) sixty days after the date of issuance of the Non-ML Notes (the “First
Principal Reset Date”) unless the Company issues the Automatically Converting
Debt Securities or the Equity Securities prior to the First Principal Reset
Date;
provided,
further
, that the Original Principal Amount of the Non-ML Notes shall
increase by an additional twenty percent (20%) one hundred and twenty days after
the date of the issuance of the Non-ML Notes (the “Second Principal Reset Date”)
unless the Company issues the Automatically Converting Debt Securities or the
Equity Securities prior to the Second Principal Reset Date. No
interest under the Non-ML Notes shall be due prior to the Maturity
Date. The Non-ML Notes are due on the Maturity
Date. Repayment of the Non-ML Notes is
subject
to the limitations contained in the July 10
th
Subordination Agreement (defined below), the terms of which are summarized
below.
In
addition, if the Company undertakes an Equity Financing, then the outstanding
principal amount of the Non-ML Notes together with the accrued but unpaid
interest will be mandatorily prepaid subject to certain conditions contained in
the July 10th Subordination Agreement and the Non-ML Notes. Subject
to the July 10th Subordination Agreement, the Non-ML Notes may be prepaid
without premium or penalty at the Company’s option on ten days prior notice to
the July 10
th
Investors.
The
Non-ML Notes also contain customary events of default, which include, among
other things, the occurrence of a default on payment of principal when due, a
default on the payment of interest for 30 days, bankruptcy or the default on
$500,000 or more in other indebtedness. In addition, the Non-ML Notes also
contain certain debt restrictions pursuant to which the Company is prohibited
from incurring additional pari passu or senior indebtedness while the Non-ML
Notes are outstanding other than the Automatically Converting Debt Securities
and an aggregate of $20,000,000 of pari passu indebtedness on similar terms to
the Non-ML Notes. Pursuant to the Non-ML Notes, the July 10
th
Investors are collectively entitled to approve one member of the board of
directors of the Company for so long as the July 10
th
Investors hold all the Non-ML Notes.
The July
10
th
Warrants are exercisable for an aggregate of 2,222,222 shares of Common Stock at
an exercise price of $2.25 per share prior to July 9, 2013;
provided
,
however
, that in no event
will the July 10
th
Investors be entitled to exercise the July 10
th
Warrants for a number of shares of Common Stock in excess of the Issuance
Limitation,
unless
the
Company’s stockholders approve any “change of control” (as defined under NASDAQ
Marketplace Rule 4350(i)(1)(B)) that would result from such exercise, in which
case the Issuance Limitation would not apply. The July 10
th
Warrants may be exercised by the July 10
th
Investors by making payment in full of the exercise price either in cash or by
written instruction directing the Company to cancel or surrender a portion of
the July 10
th
Warrants to satisfy payment of the exercise price. Payment by such
cancellation or surrender is deemed a “cashless exercise.”
On July
10, 2008, in connection with the issuance of the Non-ML Notes, the Company
became a party to a subordination agreement with the July 10
th
Investors, the Senior Lender and the Collateral Agent to the Senior Lender (the
“July 10th Subordination Agreement”). Pursuant to the July 10th
Subordination Agreement, among other things, (i) the July 10
th
Investors agreed that the payment of any indebtedness under the Non-ML Notes
would be subordinated to the payment in full of the Senior Indebtedness (as
defined in the July 10th Subordination Agreement) and (ii) the Company agreed
not to take any action that would frustrate the purposes of the subordination of
the Non-ML Notes to the Senior Indebtedness. Notwithstanding the
foregoing, the issuance of Common Stock of the Company to the July 10
th
Investors upon exercise of the July 10
th
Warrants will not be deemed a violation of the July 10th Subordination Agreement
or the documents evidencing the Senior Indebtedness.
In
addition, on July 15, 2008, the Company entered into a note and warrant purchase
agreement (the “July 15
th
Purchase Agreement” and, together with the July 10
th
Purchase
Agreement,
the “Purchase Agreements”), by and between the Company and a non-affiliated
investor listed on the Investor Schedule attached thereto (the “July 15
th
Investor” and together with the July 10
th
Investors, the “Investors”) pursuant to which, in exchange for a payment of
$500,000 in cash, the Company issued, in a private placement transaction (the
“July 15
th
Private
Placement” and, together with the ML Private Placement and the July 10
th
Private
Placement, the “Private Placements”): (i) a promissory note in the
original aggregate principal amount of $600,000 (the “July 15
th
Original Principal Amount”) (the “July 15
th
Note”
and, together with the Non-ML Notes and the ML Note, the “Notes”) and (ii)
warrants to purchase in the aggregate 327,868 shares of Common Stock at an
exercise price of $1.83 per share (the “July 15
th
Warrants” and, together with the July 10
th
Warrants, the “Warrants”). The July 15
th
Note
and the July 15
th
Warrants are described in greater detail below. The July 15
th
Purchase Agreement contains standard representations, and warranties and
affirmative and negative covenants.
The July
15
th
Note will accrue interest on the unpaid principal amount at a simple annual
interest rate of eighteen percent (18%) per annum
provided, however
, the July
15
th
Original Principal Amount of the July 15
th
Note
shall increase by twenty percent (20%) sixty days after the date of issuance of
the July 15
th
Note
(the “July 15
th
Note
First Principal Reset Date”) unless the Company issues the Automatically
Converting Debt Securities or the Equity Securities prior to the July 15
th
Note
First Principal Reset Date;
provided, further
, that the
July 15
th
Original Principal Amount of the July 15
th
Note
shall increase by an additional twenty percent (20%) one hundred and twenty days
after the date of the issuance of the July 15
th
Note
(the “July 15
th
Note
Second Principal Reset Date”) unless the Company issues the Automatically
Converting Debt Securities or the Equity Securities prior to the July 15
th
Note
Second Principal Reset Date. No interest under the July 15
th
Note
shall be due prior to the Maturity Date. The July 15
th
Note is
due on the Maturity Date. Repayment of the July 15
th
Note is
subject to the limitations contained in the July 15th Subordination Agreement
(defined below), the terms of which are summarized below.
In
addition, if the Company undertakes an Equity Financing, then the outstanding
principal amount of the July 15
th
Note
together with the accrued but unpaid interest will be mandatorily prepaid
subject to certain conditions contained in the July 15th Subordination Agreement
and the July 15
th
Note. Subject to the July 15th Subordination Agreement, the July
15
th
Note may be prepaid without premium or penalty at the Company’s option on ten
days prior notice to the July 15
th
Investor.
The July
15
th
Note also contains customary events of default, which include, among other
things, the occurrence of a default on payment of principal when due, a default
on the payment of interest for 30 days, bankruptcy or the default on $500,000 or
more in other indebtedness. In addition, the July 15
th
Note
also contain certain debt restrictions pursuant to which the Company is
prohibited from incurring additional pari passu or senior indebtedness while the
July 15
th
Note is outstanding other than the Automatically Converting Debt
Securities and an aggregate of $20,000,000 of pari passu indebtedness on similar
terms to the July 15
th
Note.
The July
15
th
Warrants are exercisable for an aggregate of 327,868 shares of Common Stock at
an exercise price of $1.83 per share prior to July 14, 2013;
provided
,
however
, that in no
event
will the July 15
th
Investor be entitled to exercise the July 15th Warrants for a number of
shares of
Common Stock in excess of the Issuance Limitation,
unless
the Company’s
stockholders approve any “change of control” (as defined under NASDAQ
Marketplace Rule 4350(i)(1)(B)) that would result from such exercise, in which
case the Issuance Limitation would not apply. The July 15
th
Warrants may be exercised by the Investor by making payment in full of the
exercise price either in cash or by written instruction directing the Company to
cancel or surrender a portion of the July 15
th
Warrant
to satisfy payment of the exercise price. Payment by such
cancellation or surrender is deemed a “cashless exercise.”
On July
15, 2008, in connection with the issuance of the July 15
th
Note,
the Company became a party to a subordination agreement with the July 15
th
Investor, the Senior Lender and the Collateral Agent to the Senior Lender (the
“July 15
th
Subordination Agreement” and, together with the July 10
th
Subordination Agreement and the ML Subordination Agreement, the “Subordination
Agreements”). Pursuant to the July 15th Subordination Agreement,
among other things, (i) the July 15
th
Investor agreed that the payment of any indebtedness under the July 15
th
Note
would be subordinated to the payment in full of the Senior Indebtedness (as
defined in the July 15
th
Subordination Agreement) and (ii) the Company agreed not to take any action that
would frustrate the purposes of the subordination of the July 15
th
Note to
the Senior Indebtedness. Notwithstanding the foregoing, the issuance
of Common Stock of the Company to the July 15
th
Investor upon exercise of the July 15
th
Warrants will not be deemed a violation of the July 15
th
Subordination Agreement or the documents evidencing the Senior
Indebtedness.
The
respective descriptions of (i) the Notes, (ii) the Warrants and (iii) the
Subordination Agreements are brief summaries only and are qualified in their
entirety by their respective terms set forth in each document, copies of which
are filed as exhibits to this Current Report on Form 8-K (the “Current
Report”).
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 of this Current Report is incorporated by
reference into this Item 2.03.
Item
3.02 Unregistered
Sales of Equity Securities.
The Notes
and the Warrants offered in the Private Placements, have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), and may not
be offered or sold in the United States absent the registration of the resale of
the Notes and the Warrants or an applicable exemption from the registration
requirements of the Securities Act. The transactions contemplated by
the Purchase Agreements and the Notes are exempt from the registration
requirements of the Securities Act, pursuant to Section 4(2) and/or Regulation D
thereunder. Pursuant to the Purchase Agreements, the Investors each
made representations to the Company regarding their respective suitability to
invest in the Private Placements, including, without limitation, that each
Investor qualifies as an “accredited investor” as that term is defined under
Rule 501(a) of the Securities Act. The Company did not engage in general
solicitation in connection with the sale of Notes and Warrants.
This
Current Report shall not constitute an offer to sell, 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 registration
or qualification under the securities laws of any such state.
The
information set forth in Item 1.01 of this Current Report is incorporated by
reference into this Item 3.02.
Item
9.01.
Financial Statements and Exhibits.
The
exhibit index filed herewith is incorporated herein by reference.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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MRU HOLDINGS,
INC.
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By:
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/s/ Vishal
Garg
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Name:
Vishal
Garg
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Title:
Co-President
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Exhibit
Index
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Exhibit
Number
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Description
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4.1*
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Convertible
Promissory Note dated July 10, 2008, issued to Merrill Lynch Mortgage
Capital Inc.
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4.2*
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Subordination
Agreement, dated July 10, 2008, among the Company, Merrill Lynch Mortgage
Capital Inc., Viking Asset Management L.L.C. and the buyers of certain
secured senior notes issued by the Company dated as of October 19,
2007
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4.3*
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Promissory
Note
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dated July 10,
2008, issued to Battery Ventures VII, L.P.
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4.4*
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Promissory
Note
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dated July 10,
2008, issued to Battery Investment Partners VII, LLC
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4.5*
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Promissory
Note
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dated July 10,
2008, issued to Printworks Series E LLC
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4.6*
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Warrant
to Purchase shares of Common Stock issued to Battery Ventures VII,
L.P.
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4.7*
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Warrant
to purchase shares of Common Stock issued to Battery Investment Partners
VII, LLC
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4.8*
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Warrant
to purchase shares of Common Stock issued to Printworks Series E
LLC
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4.9*
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Subordination
Agreement, dated July 10, 2008, among the Company, Battery Ventures VII,
L.P., Battery Investment Partners VII, LLC, Printworks Series E LLC,
Viking Asset Management L.L.C. and the buyers of certain secured senior
notes issued by the Company dated as of October 19,
2007
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4.10*
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Promissory
Note
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dated July 15,
2008, issued to Professional Investments of America,
LLC
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4.11*
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Warrant
to Purchase shares of Common Stock issued to Professional Investments of
America, LLC
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4.12*
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Subordination
Agreement, dated July 15, 2008, among the Company, Professional
Investments of America, LLC, Viking Asset Management L.L.C. and the buyers
of certain secured senior notes issued by the Company dated as of October
19, 2007
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__________________
*
Previously filed with the Original 8-K.