Unassociated Document
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)
July 30, 2008
____________________________
Blue
Holdings, Inc.
(Exact
name of registrant as specified in charter)
Nevada
(State
or
other Jurisdiction of Incorporation or Organization)
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000-33297
(Commission
File Number)
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88-0450923
(IRS
Employer Identification No.)
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5804
E. Slauson Ave., Commerce, CA 90040
(Address
of Principal Executive Offices and zip code)
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(323)
725-5555
(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:
o
Written
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting
material pursuant to Rule
14a-12(b) under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
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
July
30, 2008, the Registrant entered into an Amendment Agreement (“Amendment
Agreement”) to the Securities Purchase Agreement dated March 5, 2008 (the
“Securities Purchase Agreement”) with Gemini Master Fund, Ltd. (the “Investor”),
pursuant to which the Registrant issued a thirty-month senior secured
convertible note in the principal amount of $2,000,000 (the “Existing Note”),
and a five-year warrant to purchase an aggregate of 875,000 shares of the
Registrant’s common stock (the “Existing Warrant”).
Under
the
terms of the Amendment Agreement, the Registrant and the Investor have agreed,
in exchange for the Investor’s waiver of certain breaches under the Existing
Note, to exchange the Existing Note for an amended and restated 8% senior
secured convertible note (“Amended and Restated Note”), and to exchange the
Existing Warrant for an amended and restated warrant (“Amended and Restated
Warrant”). The Amended and Restated Note will have an aggregate principal amount
of $2,500,000 and a term of approximately thirty months commencing from March
5,
2008. The Amended and Restated Warrant will have a term of five years commencing
from March 5, 2008 and will entitle the Investor to initially purchase an
aggregate of 2,187,500 shares of the Registrant’s common stock (subject to
adjustment as provided in the Amended and Restated Warrant, including pursuant
to economic anti-dilution adjustments) at an exercise price of $0.40 per
share.
The
Amended and Restated Note will carry interest at 8% per annum on the
unpaid/unconverted principal balance, and is secured on a second priority basis
against all of the assets of the Registrant. One-twenty-fourth of the principal
amount of the Amended and Restated Note, and accrued but unpaid interest, are
due and payable monthly in 24 installments beginning on October 1, 2008. These
installment payments can be made in cash or through the issuance of stock
provided that certain equity conditions (as further set forth in the Amended
and
Restated Note) are met. The Amended and Restated Note is convertible, at the
option of the Investor prior to its maturity, into approximately 6,250,000
shares of the Registrant’s common stock (subject to adjustment as provided in
the Amended and Restated Note, including pursuant to economic anti-dilution
adjustments), based on a conversion price equal to $0.40 per share.
Additionally, beginning March 5, 2009, the Registrant can require the Investor
to convert the Amended and Restated Note into shares of the Registrant’s common
stock if the volume-weighted average price (as determined pursuant to the
Amended and Restated Note) of the common stock for any 20 out of 30 consecutive
trading days exceeds $0.80 and certain equity conditions (as further set forth
in the Amended and Restated Note) are met.
The
Amended
and Restated Note and the Amended and Restated Warrant provide
that if the Registrant has not obtained shareholder approval, the Registrant
may
not issue, upon conversion or exercise of the Amended and Restated Note and
the
Amended and Restated Warrant, as applicable, a number of shares of the
Registrant’s common stock which, when aggregated with any shares of the
Registrant’s common stock issued on or after March 5, 2008 and prior to
expiration of the Amended and Restated Warrant and the maturity of the Amended
and Restated Note (A) in connection with the conversion of the Amended and
Restated Note or as payment of principal, interest or liquidated damages, (B)
in
connection with the exercise of the Amended and Restated Warrant, and (C) in
connection with any warrants issued to any registered broker-dealer as a fee
in
connection with the issuance of the securities pursuant to the Securities
Purchase Agreement, would exceed 19.99% of the number of shares of the
Registrant’s common stock outstanding on March 4, 2008.
On
July
30, 2008, the Registrant obtained the written consent of holders of a majority
of the outstanding shares of the Registrant’s capital stock to the transactions
contemplated under the Amendment Agreement and intends to file an information
statement to effectuate the actions approved therein in the immediate
future.
The
Amended and Restated Note and the Amended and Restated Warrant also reduced
to
$0.30 the minimum trading price for the Registrant’s common stock in connection
with revisions to one of the equity conditions included therein. Except for
the
provisions described above, the terms of the Amended and Restated Note and
Amended and Restated Warrant are the same as those of the Existing Note and
Existing Warrant, respectively.
Also
in
connection with the Amendment Agreement, the Registrant and its previously
engaged placement agent have agreed, in exchange for the placement agent’s
waiver of certain breaches under the original note in the principal amount
of
$86,400 issued to the placement agent (the “Agent Note”), to exchange the Agent
Note for an amended and restated 8% senior convertible note in the principal
amount of $108,000 (convertible into 270,000 shares of the Registrant’s common
stock at a per share price of $0.40) with terms substantially similar to the
Amended and Restated Note (other than the grant of a security interest) (the
“Amended and Restated Agent Note”), and to exchange of the warrant to purchase
150,000 shares of the Registrant’s common stock originally issued to the
placement agent, for a new warrant to purchase 244,500 shares of the
Registrant’s common stock, with terms substantially similar to the Amended and
Restated Warrant (the “Amended and Restated Agent Warrant”).
The
Amended and Restated Note, the Amended and Restated Warrant, the Amended and
Restated Agent Note and the Amended and Restated Agent Warrant will be issued
promptly
following the fifteenth day after the filing of a Notification Form: Listing
of
Additional Shares with the Nasdaq Stock Market. The
issuance of the Amended and Restated Note, the Amended and Restated Warrant,
the
Amended and Restated Agent Note and the Amended and Restated Agent Warrant
is
intended to be exempt from registration under the Securities Act pursuant to
Section 3(a)(9) thereof, as such securities will be exchanged by the Registrant
with existing security holders exclusively and no commission or other
remuneration will be paid or given directly or indirectly for soliciting such
exchange. No registration statement covering these securities has been filed
with the SEC or with any state securities commission in respect of the
transactions contemplated by the Amendment Agreement.
The
foregoing descriptions are qualified in their entirety by the terms of the
Amendment Agreement, and the forms of the Amended and Restated Note and the
Amended and Restated Warrant, which are attached hereto as Exhibits 10.1, 10.2
and 10.3, respectively, and incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits.
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(d)
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Exhibits. |
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10.1
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Amendment
Agreement dated July 30, 2008, by and between the Registrant and
the
parties signatory thereto.
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10.2
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Form
of Amended and Restated 8% Senior Secured Promissory
Note
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10.3
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Form
of Amended and Restated
Warrant
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, Blue Holdings,
Inc.
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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Blue Holdings,
Inc. |
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| Date: August 4, 2008 |
By: |
/s/
Eric Hohl |
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Eric
Hohl, Chief Financial
Officer |
EXHIBIT
INDEX
| Exhibit Number |
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Description of Exhibit |
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10.1
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Amendment
Agreement dated July 30, 2008, by and between the Registrant and
the
parties signatory thereto.
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10.2
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Form
of Amended and Restated 8% Senior Secured Promissory
Note
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10.3
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Form
of Amended and Restated Warrant
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