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 2, 2005
Apollo Resources International, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Utah
(State or Other Jurisdiction of Incorporation)
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000-25873
(Commission File Number)
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84-1431425
(I.R.S. Employer Identification No.) |
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3001 Knox Street, Suite 403
Dallas, Texas
(Address of Principal Executive Offices)
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75205
(Zip Code) |
(214) 389-9800
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since 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:
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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)) |
Section 2 — Financial Information
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement
On July 6, 2005 and as filed by Company with the SEC in Current Report on Form 8-K on July
14, 2005, Company entered into that certain note and warrant purchase agreement, pursuant
to which Company sold up to $3.5 million senior convertible notes, as amended, as well as
warrants and additional investment rights and entered into those certain registration
rights agreements, as amended. Such notes are due in 2007 and were made to several
institutional and accredited investors in a private placement exempt from registration
under the Securities Act of 1933 (collectively “Convertible Notes”). Such investors are
as follows: Cranshire Capital LP, Crescent International, Ltd., Iroquois Master Fund Ltd.,
Omicron Master Trust, Rockmore Investment Master Fund, Portside Growth and Opportunity
Fund, RHP Master Fund, Ltd., Smithfield Fiduciary LLC, SRG Capital LLC, and Sunrise Equity
Partners, LP.
Pursuant to the terms of each respective senior secured promissory note, the Company was
obligated to register its shares of common stock and upon such registration, the failure
of the Registration Statement to be declared effective by the Securities and Exchange
Commission on or prior to the date which is one hundred twenty (120) days after the
closing date would constitute an event of default. The Company has not registered its
shares and therefore an event of default has occurred on or about December 3, 2005 under
each respective secured promissory note. However, the failure of the Registration
Statement to be declared effective was due in part to the SEC’s position as taken in its
comment to the Company’s Registration Statement filing. Such position deemed that those
shares granted under an additional investment right provision of the noteholders’ Note and
Warrant Purchase Agreement did not meet the criteria for registration under Rule 415 of
Regulation C (17 C.F.R. §230.415).
Further, pursuant to the terms of each respective senior secured promissory note, the
Company was obligated to repay 1/24th of the respective principal balances until paid in
full.
Of the eight original holders of the Convertible Notes, five have been paid in full. The
Company and the remaining three noteholders have entered into active settlement
negotiations. Of the total remaining aggregate principal balance of $259,733 due to the
three remaining noteholders, principal and interest payments were last made on April 17th,
2007. As such, the non-payment of principal and interest previously due and payable
constitutes a default under each of the respective remaining Convertible Notes; however,
as a result of such April 17th, 2007 payment, all principal and interest has been brought
current pursuant to the terms of the Convertible Notes.
Section 3 — Securities and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities
On December 2, 2005, the Company, in two separate securities purchase agreements pursuant to
Regulation S, sold to Mercatus & Partners, LP (“Mercatus”) a total of 14,854,930 unregistered
shares of its common stock (“Stock”) at a discount of 15% or $0.272 per share, totaling $4,040,541,
payable in U.S. dollars within thirty days thereof.
Mercatus failed to pay for the Stock and therefore an event of default occurred.
The parties have entered into active settlement negotiations and the Company has recovered
$585,360 to date.