U.S. SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported): December 23, 2005
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HIENERGY TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0 - 32093 91-2022980
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(State or other (Commission (I.R.S.
jurisdiction File Number) Identification No.)
of incorporation)
1601-B ALTON PARKWAY
IRVINE, CALIFORNIA 92606
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 757-0855
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Not Applicable
(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))
HiEnergy Technologies, Inc. ("we", "us" or the "Company") files this report on
Form 8-K to report the following:
Item 1.01 Entry into a Material Definitive Agreement
On December 13, 2005, we offered to permit the holders (the "Holders") of
certain outstanding warrants issued by our Company (the "Warrants") to cash
exercise the Warrants for a limited period of time at reduced exercise prices
(the "Offer"). The Warrants were issued previously in private placements to
accredited investors pursuant to certain Stock Purchase Agreements, Note
Purchase Agreements, or other financing agreements executed prior to December
13, 2005, and which we believe were exempt from registration pursuant to
Sections 4(2) and 3(a)(9) of the Securities Act of 1933, as amended, and/or
Regulation D.
In connection with the Offer, Holders may exercise the Warrants for cash to
purchase the underlying shares of common stock of our Company (the "Warrant
Shares") at reduced exercise prices pursuant to Schedule A to the Special
Warrant Offer, a copy of which is attached hereto as Exhibit 4.11, subject to
the following provisions:
o Holders must exercise 100% of those Warrants within the Class that
includes the Holder's Warrants with the lowest exercise prices,
before exercise of any higher priced Warrants will be accepted;
o Holder may at his option exercise the Warrants within the next
Class, provided that the exercise of Warrants will in all cases
ascend in order from the lowest-priced Class owned by the Holder, to
the highest-price Class;
o Holder will surrender or forfeit a number of the remaining Warrant
Shares not to exceed the amount of Warrant Shares purchased upon
exercise at the Adjusted Exercise Prices set forth in the Offer
beginning with the surrender or forfeit of unexercised Warrants
owned by the Holder with the lowest exercise prices and ascending to
Warrants with the highest exercise prices;
o Any securities purchased by Holder under the Agreements prior to the
date hereof would cease to accrue penalties as required under the
Agreements or otherwise; and
o All Warrants may be exercised only for cash, and any cashless
feature previously included therein shall be no longer effective.
The original expiration date for the Offer was on December 20, 2005 and was
extended by us to January 4, 2006. Following the expiration of the Offer,
Holders will no longer be able to exercise the warrants at the reduced prices.
Burnham Hill Partners ("BHP"), a division of Pali Captial, Inc. assisted the
Company in facilitating the Offer. In consideration of BHP's services, we agreed
to pay them a fee equal to 4% of the gross cash proceeds received by the Company
in the Offer.
As of December 30, 2005, the Company has received gross proceeds of $825,915.50
in connection with the Offer and is committed to issue 5,794,896 restricted
shares of the Company's common stock. Following the payment of $33,036.62 in
fees to BHP, the Company will receive $792,878.88 in net proceeds for warrants
exercised in the Offer through December 30, 2005. One Holder also elected to
cancel $80,000 of a secured promissory note as partial payment for the exercise
of the Warrants under the Offer. It is expected that over the remaining period
of the Offer, we will receive an additional $139,423 in proceeds resulting in
the issuance of an additional 1,394,230 restricted shares of the Company's
common stock. Based on the foregoing, the Company expects the elimination of
Warrants to purchase approximately 13,536,527 shares of the Company with
exercise prices between $0.45 and $1.25.
Our management believes that the Offer is in the best interests of the Company
and its shareholders because it may achieve the following objectives:
o provide the Company with short term capital which we can use to pay
immediate financial requirements, maintain operations and advance
business plan;
o eliminate up to 30 million warrants, thereby preventing these
warrants from potentially being exercised in the future at a time
when the fair market value of our shares might be higher;
o eliminate the penalty rights and cashless exercise rights held by
these Holders, reducing future dilution caused by these rights;
o provide our Company with a more streamlined capital structure to
allow for better pricing on future financings and lower audit costs;
and
o reduce the number of shares that would need to be included on future
registration statements pursuant to registration rights in warrants.
Item 3.02 Unregistered Sales of Equity Securities
The response in Item 1.01 is hereby incorporated into this Item 3.02.
Item 3.03 Material Modification to Rights of Securities Holders
The response in Item 1.01 is hereby incorporated into this Item 3.03.
Item 9.01 Financial Statements and Exhibits
Exhibit No. Description
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4.11 HiEnergy Technologies, Inc. Special Warrant Offer dated
December 13, 2005
SIGNATURES:
Pursuant to the requirement 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.
HIENERGY TECHNOLOGIES, INC.
December 30, 2005 By: /s/ Bogdan C. Maglich
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(Date) Name: Bogdan C. Maglich,
CEO, Chairman, President and Treasurer