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
SEPTEMBER 15, 2006
(Date of Report)
MIDNIGHT HOLDINGS GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-22142 55-0681106
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
22600 HALL ROAD
SUITE 205
CLINTON TOWNSHIP, MI 48036
(Address of principal executive offices)
(586) 468-8741
(Registrant's telephone number, including area code)
(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 (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
ITEM. 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
ITEM. 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
On September 15, 2006, the Registrant entered into a Securities
Purchase Agreement (the "Agreement") with a number of certain purchasers (whose
identities are set forth in the Exhibits to this 8-K) (the "Purchasers") whereby
the Purchasers agreed to purchase and the Registrant agreed to issue and sell,
upon the terms and conditions set forth therein, (i) Callable Convertible
Promissory Notes of the Registrant in the aggregate principal amount of Three
Hundred Thousand Dollars ($300,000) (the "Notes"), convertible into shares of
common stock, par value $.00005 per share, of the Registrant (the "Common
Stock"), and (ii) Stock Purchase Warrants exercisable for an aggregate of Six
Hundred Thousand (600,000) shares of Common Stock (the "Warrants"). Each
Purchaser is an "accredited investor" as defined in Rule 501(a) of Regulation D
under the Securities Act of 1933, as amended (the "Securities Act").
Each of the Notes accrues interest at a rate of ten percent (10%) per
annum and matures on September 15, 2009. Each of the Notes is convertible, at
the option of the holder, into shares of Common Stock at a conversion ratio
which reflects a discount to the average of the three lowest trading prices of
the Common Stock for the 20 trading days immediately preceding conversion.
Each of the Warrants is exercisable, at the option of the holder, for a
period of five (5) years from the date of issuance, at an exercise price per
share of Common Stock purchased equal to $0.04; provided, that if the Registrant
defaults under an obligation to register the shares of Common Stock for which
the Warrants are exercisable pursuant to the Securities Act at the time of
exercise (as discussed below), the Warrants may be exercised on cashless basis.
Contemporaneous with the execution and delivery of the Agreement, the
parties thereto executed and delivered a Registration Rights Agreement (the
"Registration Rights Agreement"), pursuant to which the Registrant granted
certain registration rights under the Securities Act with respect to the Common
Stock issuable upon conversion of the Notes and exercise of the Warrants
("Conversion Shares"). The Registrant is under an obligation to register such
Conversion Shares pursuant to the Securities Act within 45 days of the closing
of the above-referenced transaction.
The Registrant sold and issued the Notes and the Warrants in reliance
upon an exemption from registration pursuant to Section 4(2) of the Securities
Act and the rules and regulations promulgated pursuant thereto. In relying on
such exemption, the Registrant considered that the transaction was the result of
non-public offering (for which no advertisements or solicitations were made) to
an affiliated group of four "accredited investors", with sophistication in
investments of the same type as the Securities, in an aggregate amount of only
$300,000.
In order to induce the Purchasers to purchase the Notes and the
Warrants, the Registrant agreed to execute and deliver to the Purchasers (i) a
Security Agreement, dated September 15, 2006, granting the Purchasers a security
interest in the property of Registrant, and (ii) an Intellectual Property
Security Agreement, dated September 15, 2006, granting the Purchasers a security
interest in the intellectual property of the Registrant.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
4.1 Form of Common Stock Purchase Warrant
10.1 Securities Purchase Agreement, dated as of September 15, 2006,
by and among the Registrant and the Purchasers.
10.2 Security Agreement, dated as of September 15, 2006, by and among
the Registrant and the secured parties listed as signatories
thereto.
10.3 Intellectual Property Security Agreement, dated as of September
15, 2006, by and among the Registrant and the secured parties
listed as signatories thereto.
10.4 Registration Rights Agreement, dated as of September 15, 2006 by
and among the Registrant and the Purchasers.
10.5 Form of Callable Secured Convertible Note
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.
Dated: September 15, 2006
MIDNIGHT HOLDINGS GROUP, INC.
By: /s/ Nicholas A. Cocco
--------------------------------------------
Name: Nicholas A. Cocco
Title: President and Chief Executive Officer