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):
December 27, 2007
ITRONICS INC.
-----------------------------------------------------------------------------------------------------------
Texas
33-18582
75-2198369
(State
or other jurisdiction (Commission
File
(IRS
Employer
of
incorporation)
Number)
Identification
No.)
6490 So. McCarran Boulevard, Building C, Suite 23 Reno, Nevada
89509
(Address
of Principal Executive Offices)
Zip
Code
Registrants telephone number, including area code:
(775) 689-7696
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):
[ ] 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))
Item 1.01: Entry into a Material Definitive Agreement
On December 27, 2007 the Company entered into the material agreements
described under Item 3.02 below.
Item 2.03: Creation of a Direct Financial Obligation
On December 27, 2007 the Company entered into agreements that create
material direct financial obligations. The agreements are more fully described under Item
3.02 below.
Item 3.02 Unregistered Sales of Securities
Section 1:
On December 27, 2007, the Company entered into a Securities Purchase
Agreement with three accredited investors (the "Investors") for an aggregate
amount of (i) $200,000 in secured convertible notes, and (ii) warrants to purchase
15,000,000 shares of the Companys common stock (the "Financing"). The
Company anticipates that the proceeds of the Financing will be used to advance its eight
part business plan which was summarized in its press release issued by the Company on June
3, 2005. The Financing will provide working capital to expand GOLDn GRO fertilizer
sales, EPA registration of the GOLDn GRO Guardian deer repellant fertilizer, certain
capital improvements to expand production capacity, and payment of existing debt
obligations.
The Financing was made in reliance upon an exemption from securities
registration afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D
as promulgated by the United States Securities and Exchange Commission under the
Securities Act of 1933, as amended.
The Financing was completed in one closing. The closing consisted of
gross proceeds of $200,000, less financing costs of $15,000, for net proceeds of $185,000.
The Investors received three year convertible notes (the
"Notes") bearing simple interest at 8% per annum. The Notes are convertible into
the Companys common stock at a price equal to the lesser of (i) $0.10 or (ii) 35% of
the average of the lowest 3 trading prices during the 20 trading day period ending one
trading day before the conversion date. In addition, we granted the Investors a further
security interest in substantially all of our assets, including the assets of our wholly
owned subsidiaries, and intellectual property.
The parties entered into a Registration Rights Agreement whereby we are
required to file a registration statement with the
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Securities and Exchange Commission within 180 days of closing,
registering the common stock underlying the secured convertible notes and the warrants. If
the registration statement is not declared effective within 180 days from the date of
closing, we are required to pay liquidated damages to the investors. In the event that we
breach any representation or warranty in the Securities Purchase Agreement, we may be
required to pay liquidated damages in shares or cash, at our election, equal to two
percent of the outstanding principal amount of the secured convertible notes per month
plus accrued and unpaid interest.
The Investors received seven year warrants to purchase a total of
15,000,000 common shares of the Company at a purchase price of $0.001 per share.
Other than under these Agreements and under certain specified
circumstances, should we issue shares of common stock below the market price, the exercise
price of the warrants will be reduced accordingly.
The conversion price of the secured convertible notes and the exercise
price of the warrants may be adjusted in certain circumstances such as if we pay a stock
dividend, subdivide or combine outstanding shares of common stock into a greater or lesser
number of shares, or take such other actions as would otherwise result in dilution of the
selling stockholder's position.
The Investors have agreed to restrict their ability to convert their
secured convertible notes or exercise their warrants and receive shares of our common
stock such that the number of shares of common stock held by them in the aggregate and
their affiliates after such conversion or exercise does not exceed 4.9% of the then issued
and outstanding shares of common stock.
In addition to the above terms, the Company has agreed to restructure
all previous unpaid Callable Secured Convertible Notes ("the Notes") by
increasing the discount on the conversion price from 60% to 65%, such that the conversion
price is 35% of the average of the lowest 3 trading prices during the 20 trading day
period ending one trading day before the conversion date, instead of the 55% as stated in
the Notes and related Securities Purchase Agreements.
The Company paid a finders fee of 8% of the gross proceeds.
Section 2:
Following is a summary of other sales of unregistered securities
occurring since the last current report on Form 8-K filed on December 14, 2007:
3
In December 2007, we issued an aggregate of 31,771,894 common shares to
four accredited investors upon the conversion of $25,418 in callable secured convertible
notes.
With the issuance of the these shares, the Company has issued all but a
nominal number of its one billion authorized shares. Planning is underway to hold a
special meeting of shareholders in order to increase the authorized shares so that the
Company can meet its obligations under the current and previous callable secured
convertible notes and related securities purchase agreements.
On December 31, 2007 the Company rolled $342,170 of interest accrued on
the previously issued callable secured convertible notes into Callable Secured Convertible
Notes (the Notes), which bear simple interest at 2% per annum. This in effect adds the
accrued interest to the principal balance outstanding. The Notes have the same terms and
conditions, including the right to convert into common stock, as the previously issued
Notes.
In accordance with General Instruction B.2 of Form 8-K, the information
in this Current Report on Form 8-K shall not be deemed to be "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to the liability of that section, and
shall not be incorporated by reference into any registration statement or other document
filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall
be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
Exhibits:
10.1 Securities Purchase Agreement dated
December 19, 2007, by and among Itronics
Inc.
and the investors named on the signature pages thereto.
10.2 Callable Secured Convertible Note dated
December 19, 2007.
10.3 Callable Secured Convertible Note dated
December 19, 2007.
10.4 Callable Secured Convertible Note dated
December 19, 2007.
10.5 Stock Purchase Warrant dated December 19,
2007.
10.6 Stock Purchase Warrant dated December 19,
2007.
10.7 Stock Purchase Warrant dated December 19,
2007.
10.8 Registration Rights Agreement dated December
19, 2007, by and among Itronics
Inc.
and the investors named on the signature pages thereto.
10.9 Callable Secured Convertible Note dated
December 31, 2007
10.10 Callable Secured Convertible Note dated December 31, 2007
10.11 Callable Secured Convertible Note dated December 31, 2007
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SIGNATURE
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.
ITRONICS INC.
(Registrant)
Date:
January 3, 2008
By:
/S/ John W. Whitney
John
W. Whitney
President,
Treasurer and Director
(Principal
Executive and Financial
Officer)
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