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): DECEMBER 31, 2005
MRU HOLDINGS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 000-33487 33-0954381
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(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
1114 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(212) 754-0774
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(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 (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.
On December 31, 2005, the Registrant announced that it has entered into a
definitive securities purchase agreement with Battery Ventures VII, L.P., a
leading venture capital firm focused on investing in technology companies
("Battery Ventures"), and Merrill Lynch Private Equity Partners, a division of
Merrill Lynch Investment Managers focusing on investing in venture capital and
leveraged buyout transactions and funds ("Merrill Lynch"), (collectively the
"Investors"), pursuant to which several funds of the Investors will purchase, in
a private placement transaction, shares of a new series of preferred stock of
the Registrant to be designated the Series B Convertible Preferred Stock, par
value $.001 (the "Series B Preferred Stock") at the purchase price of $3.80 per
share or an aggregate price of $25 million. The Registrant shall issue warrants
to the Investors to purchase a total of 2,138,158 shares of the Series B
Preferred Stock at $3.80 per share for a three year period. The transaction is
anticipated to close on or about February 10, 2006.
The closing of the transaction is subject to certain closing conditions
including the filing of an Amended and Restated Certificate of Incorporation to
create the Series B Preferred Stock and amend the relative powers, preferences
and rights as between the authorized classes and series of the Registrant's
preferred stock. The holders of the Series B Preferred shall be entitled to
receive cumulative dividends on the Series B Preferred at a rate equal to 6% of
the purchase price payable annually in arrears in additional shares of Series B
Preferred. The Series B Preferred shall rank senior to all shares of the
Registrant's common stock and preferred stock. The Amended and Restated
Certificate of Incorporation will be filed with the Securities and Exchange
Commission on Form 8-K, as required.
The Registrant agreed to prepare and file with the Securities and Exchange
Commission a registration statement registering for resale the shares of common
stock issuable on conversion of the shares of Series B Preferred Stock and on
conversion of the shares of Series B Preferred Stock issuable on exercise of the
warrants issued to the Investors and to use its best efforts to cause the
Commission to declare such registration statement effective as promptly as
practicable but in no event later than the one year anniversary of the closing
date of the transaction.
The exercise price of the warrants issued to the Investors is subject to
reduction, in the event that such registration statement is not filed at least
60 days prior to the one year anniversary of the closing date; a request for
acceleration in accordance with Rule 461 promulgated under the Securities Act is
not filed within two trading days after the date on which the Registrant is
notified by the Commission that such registration statement will not be
"reviewed," or is not subject to further review; the registration statement is
not declared effective on or before the one year anniversary of the closing date
or the registration statement ceases for any reason to remain continuously
effective on each such event and on the same date of each month thereafter until
the applicable event is cured.
The securities purchase agreement is subject to termination on the written
agreement of the Investors and the Company, by the Company or the Investors if
the closing does not occur by February 28, 2006, or by the Investors if any of
the conditions precedent have not been satisfied or waived on or prior to
February 28, 2006.
The Registrant is required to pay to the Investors a termination payment in the
event of a termination caused by the transaction not closing prior to February
28, 2006 or conditions precedent not having been satisfied or waived by such
date in an amount equal to the greater of: (i) $2,500,000 or (ii) the aggregate
of (x) all reasonable fees and expenses of the Investors plus (y) an amount
equal to (A) 1.5 times the difference (if positive) in the closing price of a
share of common stock of the Registrant on the date of such termination compared
to the closing price of a share of common stock of the Registrant on the date of
the securities purchase agreement, multiplied by (B) the number of shares of
common stock into which the shares of Series B Preferred and the warrants would
have converted had such shares been issued on the termination date. However if a
termination relates solely to the failure to satisfy those conditions precedent
to closing relating to the Investors' satisfaction with the results of their due
diligence or the Registrant's amending its By-laws in a form satisfactory to
Investors, the sole liability of the Registrant shall be for the reasonable fees
and expenses of the Investors incurred as the result of the transaction.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
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EXHIBIT NO. EXHIBIT
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10.1 Securities Purchase Agreement dated December 31, 2005 among MRU Holdings, Inc.,
Battery Ventures VII, L.P. and Merrill Lynch Private Equity Partners.
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99.1 Press release of MRU Holdings, Inc. dated January 5, 2006.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this current report to be signed on its
behalf by the undersigned, thereunto duly authorized.
MRU HOLDINGS, INC.
Date: January 6, 2006 By: /s/ Vishal Garg
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Name: Vishal Garg
Title: Chief Financial Officer
EXHIBIT INDEX
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EXHIBIT NO. EXHIBIT
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10.1 Securities Purchase Agreement dated December 31, 2005 among MRU Holdings, Inc.,
Battery Ventures VII, L.P. and Merrill Lynch Private Equity Partners.
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99.1 Press release of MRU Holdings, Inc. dated January 5, 2006.
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