Stratos Renewables Corp - Current report filing (8-K)
03 Setembro 2008 - 5:33PM
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
August
27, 2008
Date
of
Report (Date of earliest event reported)
Stratos
Renewables Corporation
(Exact
name of Registrant as specified in its charter)
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Nevada
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333-124060
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20-1699126
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(State
or other jurisdiction
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(Commission
File Number)
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(I.R.S.
Employer
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of
incorporation)
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Identification
No.)
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9440
Santa Monica Blvd., Suite 401, Beverly Hills, CA 90210
(Address
of principal executive offices)
(Zip
Code)
(310)
402-5901
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 (see General Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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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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¨
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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 – Entry into a Material Definitive Agreement
Item
3.02 – Unregistered Sales of Equity Securities
Issuance
of $5,000,000 Unsecured Convertible Promissory Note and
Warrants
On
August
27, 2008, Stratos Renewables Corporation, a Nevada corporation (the “Company”),
completed a financing pursuant to which the Company issued an unsecured
convertible promissory note in the principal amount of $5,000,000, and warrants
to purchase up to 2,500,000 shares of common stock of the Company, to an
unaffiliated accredited investor. The Company received gross proceeds of
$5,000,000, less placement fees of 10% of the principal amount of the note
and
other expenses. The Company intends to use the proceeds as working capital.
The
note matures on December 31, 2009, or if the note holder elects to accelerate
the maturity date, July 23, 2009. The note bears interest at the rate of 10%
per
annum, payable in full at the maturity date. The Company believes the securities
were issued in reliance from exemptions from registration pursuant to Section
4(2) or Regulation D under the Securities Act of 1933, as amended (the
“Securities Act”). The Unsecured Convertible Promissory Note and Warrant
Purchase Agreement, the Unsecured Convertible Promissory Note and the Warrant
are included herewith as Exhibits 10.1, 4.1 and 4.2, respectively.
The
note
may be prepaid by the Company in whole, but not in part, from time to time.
If
the note is prepaid by the Company more than 30 days prior to the maturity
date,
the Company has agreed to pay the note holder a prepayment fee equal to 15%
of
the sum of the principal amount of the note and all accrued and unpaid interest.
Upon the occurrence of any event of default, all amounts owing to the note
holder under the note become due and payable in full.
At
any
time prior to payment in full of the note, the note holder has the option
to
convert any or all of the unpaid principal and accrued and unpaid interest
on
the note plus any prepayment fee, if applicable, into shares of common stock
of
the Company at a conversion price of $0.70 per share (the “Conversion Price”).
Under certain circumstances, such as in the event of the sale of securities
of
the Company at a price less than $0.70 per share, the Conversion Price will
be
subject to adjustment.
Until
the
earlier to occur of: (i) the exercise or expiration of the warrants or (ii)
August 27, 2011, the note holder will have the right to participate in equity
financings (including securities which are convertible into equity) undertaken
by the Company for a per share price that is less than the Conversion Price
of
the note then in effect, up to its pro rata share of the shares of the Company’s
common stock outstanding at the time of such financing, as determined on a
fully
diluted basis. The note holder’s pro rata share will be measured by dividing the
aggregate number of shares of the Company’s common stock issuable to the note
holder under the note and warrants after giving effect to the conversion in
full
of the note and the exercise in full of such warrants (the “Conversion Shares”)
by the number of shares of the Company’s common stock outstanding plus the
Conversion Shares.
Upon
the
closing of a financing or multiple financings of any combination of debt or
equity securities, having aggregate gross proceeds to the Company and its
subsidiaries of at least $50,000,000 (a “Trigger Event”), all of the unpaid
principal balance of the note, plus all accrued but unpaid interest (the
“Principal Sum and Interest”), will automatically be converted into a number of
shares of common stock as determined by dividing the Principal Sum and Interest
by the Conversion Price
then in
effect (the “Mandatory Conversion Date”). However, in the event of the
occurrence of a Trigger Event, the number of shares of common stock into which
the Principal Sum and Interest will be converted will not exceed 4.99% of the
number of shares of the common stock outstanding immediately after giving effect
to the issuance of shares of common stock issuable upon conversion of the note
(the “Beneficial Ownership Limitation”). The remaining unconverted Principal Sum
and Interest on the note over and above the Beneficial Ownership Limitation
will
be automatically converted into shares of common stock on a date as determined
by the Company (the “Subsequent Mandatory Conversion Date”), provided that the
Company must give the note holder not less than 61 days prior written notice
of
the Subsequent Mandatory Conversion Date. The number of shares of common stock
into which the note will be converted on the Subsequent Mandatory Conversion
Date will be determined by dividing the remaining unconverted Principal Sum
and
Interest by the Conversion Price in effect on the Mandatory Conversion
Date. The Beneficial Ownership Limitation provisions of the note may be waived
by the note holder, at the election of the note holder, upon not less than
61
days’ prior notice to the Company, to change or eliminate the Beneficial
Ownership Limitation.
So
long
as the note is outstanding, the Company and its subsidiaries are restricted
from
incurring certain items of debt without the prior written consent of the holders
a majority of the then outstanding aggregate unpaid principal amount of the
note
(plus any other additional notes of the same series which may be issued in
the
future, if at all, in the aggregate amount of up to $10,000,000).
The
warrants may be exercised at any time from and after the date commencing
February 27, 2009 and through and including August 27, 2013. The warrants have
an exercise price of $0.75 per share. The warrants also contain certain
provisions for the adjustment of the exercise price in the event that during
the
term of the warrants, the Company sells securities below the stated Conversion
Price of the note. This could result in an exercise price of less than $0.75
per
share. The warrants also contain a cashless exercise provision.
The
Company has also agreed to provide piggyback registration rights with respect
to
the Conversion Shares, pursuant to which the Company will use its best efforts
to register such shares in the event that it proposes to register any of its
securities under the Securities Act.
Item
9.01 – Financial Statements and Exhibits
(d)
Exhibits
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Exhibit
4.1
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$5,000,000
Unsecured Convertible Promissory Note, dated August 27,
2008
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Exhibit
4.2
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Warrant
to Purchase 2,500,000 Shares of Common Stock, dated August 27,
2008
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Exhibit
10.1
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$5,000,000
Unsecured Convertible Promissory Note and Warrant Purchase 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 thereunto
duly authorized.
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STRATOS
RENEWABLES CORPORATION
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Dated:
September 3, 2008
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By:
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/s/
Carlos
Antonio Salas
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Carlos
Antonio Salas
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Chief
Executive Officer
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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4.1
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$5,000,000
Unsecured Convertible Promissory Note, dated August 27,
2008
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4.2
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Warrant
to Purchase 2,500,000 Shares of Common Stock, dated August 27,
2008
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10.1
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$5,000,000
Unsecured Convertible Promissory Note and Warrant Purchase Agreement,
dated August 27, 2008
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