U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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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 28, 2004
ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
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(Exact Name of Registrant as Specified in Charter)
COLORADO
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(State or Other Jurisdiction of
Incorporation or Organization)
000-17325 88-0218499
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(Commission File Number) (I.R.S. Employer Identification No.)
5444 Westheimer Road, Suite 1570, Houston, Texas 77056
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(Address of principal executive offices including zip code)
(713) 626-4700
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(Registrant's telephone number, including area code)
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 21, 2004, Environmental Remediation Holding Corporation
("ERHC") finalized a restructure of ERHC's current debt (the "Restructure").
Pursuant to the Restructure, ERHC entered into a Letter Agreement, dated
November 29, 2004, with Chrome Energy, LLC, an affiliated entity ("Chrome") to
restructure all of ERHC's current debt with Chrome (the "Letter Agreement").
Prior to the Restructure, ERHC had six (6) outstanding notes in favor of Chrome:
(i) Senior Secured 10.00% Exchangeable Promissory Note Due February 15, 2005,
with a principal amount as of November 18, 2004 of $4,299,460.92; (ii) Senior
Secured 10.00% Exchangeable Promissory Note, dated as of February 15, 2001, with
a principal amount of $1,800,000; (iii) Senior Secured 8.00% Exchangeable
Promissory Note, dated February 15, 2001, with a principal amount of $2,000,000;
(iv) Amended and Restated Convertible Note, dated as of January 31, 2001, with a
principal amount of $804,312.50; (v) Amended and Restated Convertible Note,
dated as of January 31, 2001, with a principal amount of $6331.666.67; and (vi)
Note, dated as of February 15, 2001, with a principal amount of $403,643.85
(collectively, the "Old Notes").
Pursuant to the Restructure, the Old Notes were cancelled in full in
exchange for a new 12% note, dated as of December 15, 2004, with an original
principal amount of $10,134,084, convertible at the sole discretion of ERHC at
$0.175 per share, and expiring on January 31, 2007 (the "Exchange Note"). The
entire original principal of the note is due on January 31, 2007, with annual
interest payments due on January 31, 2006 and January 31, 2007. Interest
payments are convertible at ERHC's discretion at $0.175 per share.
In addition to the Exchange Note, ERHC entered into a new 10% working
capital loan, dated as of December 15, 2004, in favor of Chrome for up to
$2,500,000 (the "Working Capital Loan"). The Working Capital Loan is convertible
into shares of ERHC common stock, at the sole discretion of ERHC, at $0.175 per
share and expires on January 31, 2007. The entire original principal of the
Working Capital Loan is due on January 31, 2007, with annual interest payments
due on January 31, 2006 and January 31, 2007. Interest payments are convertible
at ERHC's discretion at $0.175 per share. Pursuant to the Working Capital Loan
Chrome is required to make funds available to Chrome pursuant to a schedule
attached thereto. On December 21, 2004, ERHC received the first $1,000,000
advance from the Working Capital Loan.
Prior to the Restructure, ERHC had outstanding notes totaling
$1,626,033.86 with nonaffiliated note holders. As part of the Restructure, ERHC
has received agreements from the nonaffiliated note holders of $1,592,520.84 to
convert their respective principal and interest into shares of common stock at
$.20 per share, thereby reducing ERHC outstanding note obligation to
nonaffiliated note holders to $33,513.02.
A copy of the Letter Agreement is attached hereto as Exhibit 10.1 and is
incorporated herein in its entirety by reference into this Item 1.01. A copy of
the Exchange Note is attached hereto as Exhibit 10.2 and is incorporated herein
in its entirety by reference into this Item 1.01. A copy of the Working Capital
Note is attached hereto as Exhibit 10.3 and is incorporated herein in its
entirety by reference into this Item 1.01.
ITEM 3.02.
The Restructure is discussed in greater detail in Item 1.01 of this Form
8-k. Pursuant to the Restructure, on December 21, 2004, ERHC authorized the
issuance of a total of 25,397,022 shares of ERHC common stock to Chrome. ERHC
issued 12,308,560 shares to Chrome in consideration for the accrued but unpaid
interest on the Old Notes of $2,461,711.84. The accrued but unpaid interest was
converted to common stock at $0.20 per share which was equivalent to the
conversion price for all the Old Notes, except one unconvertible note with an
original principal balance of $403,643.85. ERHC issued 12,465,202 shares to
Chrome as consideration for canceling the Old Notes and entering into the
Exchange Note. Lastly, ERHC has authorized the issuance of 623,260 shares to
Chrome for its pro rata potion of the 1,558,150 shares allocated as
consideration for entering into the New Working Capital Loan, the remaining
shares will be issued pro rata as Chrome makes future advances.
The information furnished in this Form 8-k shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section, nor shall such information
be deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific reference
in such a filing.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired. Inapplicable.
(b) Pro Forma Financial Information. Inapplicable.
(c) Exhibits
Exhibit Number Exhibit Description
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Exhibit 10.1 Letter Agreement with Chrome (without exhibits
thereto).
Exhibit 10.2 Promissory Note in favor of Chrome
Exhibit 10.3 Working Capital Note in Favor of Chrome (without
exhibit thereto)
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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 hereunto duly authorized.
ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
By: /s/ Ali Memon
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Ali Memon, President
DATE: December 28, 2004
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