UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) March 9, 2006
BPK Resources, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Nevada 000-27339 88-0426887
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
264 Union Boulevard, First Floor
Totowa, New Jersey 07512
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (973) 956-8400
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(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.
The information provided in Item 2.03 and Item 3.02 is incorporated herein
by this reference.
On March 9, 2006, BPK Resources, Inc. (the "Company") entered into an
Agreement and Plan of Merger (the "Merger Agreement") among the Company, BPK
Resources Acquisition Corp., a Delaware corporation and wholly owned subsidiary
of the Company ("Merger Sub"), Graphite Technology Group, Inc., a Delaware
corporation ("Graphite"), Derek Hirsch and James E. Olive, the principal
shareholders of Graphite (collectively, the "Principal Shareholders"). Pursuant
to the Merger Agreement, at the effective time, Merger Sub will merge with and
into Graphite (the "Merger"). As a result of the Merger, Graphite will survive
as a wholly owned subsidiary of the Company.
Completion of the Merger is subject to several conditions, including
approval by the shareholders of Graphite, the delivery by Graphite of audited
financial statements and other customary closing conditions. The Merger
Agreement may be terminated by any of the Company, Merger Sub, Graphite or the
Principal Shareholders upon the occurrence or failure to occur of certain
events, including a failure of the Merger to be consummated by March 31, 2006.
In consideration for the Merger: (i) the holders of issued and outstanding
shares of Graphite common stock will be entitled to receive an aggregate of (A)
40,000,000 shares of the Company's common stock, $0.001 par value per share
("BPK Common Stock"), and (B) 585,000 shares of the Company's Series D
Convertible Preferred Stock, $0.001 par value per share ("BPK Series D Preferred
Stock"), which shares will be convertible into an aggregate of 58,500,000 shares
of BPK Common Stock, and (ii) the holders of issued and outstanding shares of
Graphite preferred stock will be entitled to receive an aggregate of 14,546
shares of the Company's Series E Convertible Preferred Stock, $0.001 par value
per share ("BPK Series E Preferred Stock"), which shares will be convertible
into an aggregate of 3,500,000 shares of BPK Common Stock. In connection with
the Merger, the Company has agreed to grant certain "piggyback" registration
rights to Graphite's shareholders.
Each share of BPK Series D Preferred Stock will automatically convert into
shares of BPK Common Stock upon the earlier of: (i) the filing of an amendment
to the Company's Articles of Incorporation increasing the number of authorized
shares of BPK Common Stock such that a sufficient number of shares of BPK Common
Stock is authorized and unissued so that each share of BPK Series D Preferred
Stock may be converted into BPK Common Stock; or (ii) the first business day
after the effective date of a reverse stock split of the outstanding shares of
BPK Common Stock such that a sufficient number of shares of BPK Common Stock is
authorized and unissued so that each share of BPK Series D Preferred Stock may
be converted into BPK Common Stock. The holders of BPK Series D Preferred Stock
will have no liquidation preference, voting rights or rights to receive
dividends.
Each share of BPK Series E Preferred Stock will be convertible into shares
of BPK Common Stock at the option of the holder commencing upon the earlier of:
(i) the filing of an amendment to the Company's Articles of Incorporation
increasing the number of authorized shares of BPK Common Stock such that a
sufficient number of shares of BPK Common Stock is authorized and unissued so
that each share of BPK Series E Preferred Stock may be converted into BPK Common
Stock; or (ii) the first business day after the effective date of a reverse
stock split of the outstanding shares of BPK Common Stock such that a sufficient
number of shares of BPK Common Stock is authorized and unissued so that each
share of BPK Series E Preferred Stock may be converted into BPK Common Stock.
Subject to the rights of holders of any series of preferred stock which by its
terms is senior to the BPK Series E Preferred Stock, in the event of any
liquidation, dissolution or winding up of BPK, holders of the BPK Series E
Preferred Stock will be entitled to receive in preference to the holders of BPK
Common Stock an aggregate amount of approximately $1,500,000.
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On March 10, 2006, the Company entered into an agreement with Graphite to
loan up to an additional $1,000,000 to Graphite pursuant to a promissory note
(the "Graphite Note") in contemplation of the Merger. The Graphite Note bears
interest at an annual rate of 12% and is secured by all of Graphite's assets, as
evidenced by that certain Second Amended and Restated Security Agreement made by
Graphite in favor of the Company dated as of March 10, 2006 (the "Security
Agreement"). The unpaid principal balance of the Graphite Note, together with
all accrued and unpaid interest thereon, is due no later than March 31, 2006. As
of March 10, 2006, the Company has advanced $208,000 to Graphite under the
Graphite Note. The Company has funded its obligation under the Graphite Note by
issuing shares of a new series of its preferred stock to various purchasers, as
more fully described in Item 3.02 below, as well as through other private
offerings previously disclosed. The Company has advanced an aggregate of
$1,958,000 to Graphite since December 2005.
In consideration for the foregoing loan, pursuant to that certain Option
Agreement between Graphite and the Company dated as of March 10, 2006 (the
"Option Agreement"), Graphite granted an option (the "Option") to the Company to
purchase up to 13.33% of Graphite's then outstanding shares of common stock
calculated on a fully diluted basis for up to $1,000,000 at any time prior to
December 31, 2008. The Option may only be exercised in the event Graphite
determines not to proceed with the Merger.
The descriptions of the Merger Agreement, the Graphite Note, the Security
Agreement and the Option set forth above are qualified in their entirety by
reference to copies of such agreements filed as exhibits to this report and
incorporated herein by this reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information provided in Item 5.03 is incorporated herein by this
reference.
Pursuant to a series of Securities Purchase Agreements (collectively, the
"Purchase Agreements") with certain purchasers thereunder (collectively, the
"Purchasers"), the Company commenced private placement offerings of certain of
its securities (collectively, the "Offerings"), consisting of (i) up to 500,000
shares of the Company's Series C Convertible Preferred Stock, $0.001 par value
per share ("BPK Series C Preferred Stock"), which shares will initially be
convertible into an aggregate of 50,000,000 shares of BPK Common Stock, and (ii)
warrants (the "Warrants") to acquire up to 25,000,000 shares of BPK Common Stock
to be issued and sold in units (the "Units") comprised of one (1) share of BPK
Series C Preferred Stock and one (1) Warrant to purchase 50 shares of BPK Common
Stock at a purchase price of $17.00 per Unit (the "Purchase Price").
As of March 9, 2006, the Company had sold 100,000 Units for an aggregate
purchase price of $1,700,000 in a private offering to an overseas Purchaser (the
"Non US Private Offering"). The balance of the Units may be sold to Purchasers
in the United States in a private offering (the "US Private Offering") or
overseas in the Non US Private Offering at the discretion of the Company.
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In connection with the Offerings, the Company has agreed to file a
registration statement with the Securities and Exchange Commission (the "SEC")
within 90 days after the Offerings are completed registering the shares of BPK
Common Stock issuable to the Purchasers upon conversion of the BPK Series C
Preferred Stock and upon exercise of the Warrants and to have such registration
statement declared effective by the SEC within 150 days after the Offerings are
completed. In the event the Company fails to file the required registration
statement within the 90-day period or have such registration statement declared
effective by the SEC within the 150-day period, the Company will be obligated to
pay in cash or in shares of BPK Common Stock (at the Company's option) an amount
equal to 2% of the Purchase Price and an additional amount equal to 1% of the
Purchase Price at the end of each subsequent 30-day period in which the
registration statement is not filed or declared effective, as the case may be.
Each share of BPK Series C Preferred Stock has an original issue price of
$17.00 and will automatically convert into shares of BPK Common Stock at a
conversion price of $0.17 per share upon the earlier of: (i) the filing of an
amendment to the Company's Articles of Incorporation increasing the number of
authorized shares of BPK Common Stock such that a sufficient number of shares of
BPK Common Stock is authorized and unissued so that each share of BPK Series C
Preferred Stock may be converted into BPK Common Stock; or (ii) the first
business day after the effective date of a reverse stock split of the
outstanding shares of BPK Common Stock such that a sufficient number of shares
of BPK Common Stock is authorized and unissued so that each share of BPK Series
C Preferred Stock may be converted into BPK Common Stock.
Each Warrant is initially exercisable into 50 shares of BPK Common Stock
at an exercise price of $0.34 per share. The exercise period for the Warrants
commences on the date which is the earlier of: (i) the filing of an amendment to
the Company's Articles of Incorporation increasing the number of shares of BPK
Common Stock the Company is authorized to issue such that a sufficient number of
shares is authorized so that the Warrants issued pursuant to the Purchase
Agreements may be exercised into shares of BPK Common Stock; or (ii) the first
business day after the effective date of a reverse split of the outstanding
shares of BPK Common Stock such that a sufficient number of shares is authorized
so that the Warrants issued pursuant to the Purchase Agreements may be exercised
into shares of BPK Common Stock. The exercise period terminates on the third
anniversary of the date of the applicable Warrant.
The securities to be issued in the US Private Offering will be sold in a
private placement transaction to a limited number of accredited investors
pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"), and Rule 506 of
Regulation D thereunder. We may pay placement agent fees of to various broker
dealers registered under the Securities Exchange Act of 1934, as amended, and
members of the National Association of Securities Dealers, Inc. We also may
issue warrants to certain of the placement agents to purchase shares of common
stock equal to 8% of the shares included in the units sold by such placement
agents at an exercise price of $0.34 per share in payment of additional
placement agent fees. The other material terms of these warrants are identical
to the terms of the warrants issued to investors in the US Private Offering and
described above.
The securities sold in the Non US Private Offering were issued in a
private placement transaction to one accredited investor who is not a "U.S.
person" pursuant to the exemption from registration provided by Rules 901 and
903 of Regulation S under the Securities Act. We paid consulting fees in the
amount of $136,000 in connection with this transaction
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The descriptions of the Purchase Agreements and the Warrants set forth
above are qualified in their entirety by reference to copies of such agreements
filed as exhibits to this report and incorporated herein by this reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On March 10, 2006, the Company filed a Certificate of Designation with the
Secretary of State of the State of Nevada designating 500,000 shares of the
Company's preferred stock as BPK Series C Preferred Stock (the "Series C
Certificate of Designation").
The holders of BPK Series C Preferred Stock have no voting rights or
rights to receive dividends. However, subject to the rights of holders of any
series of preferred stock which by its terms is senior to the BPK Series C
Preferred Stock, in the event of any liquidation, dissolution or winding up of
BPK, holders of the BPK Series C Preferred Stock will be entitled to receive in
preference to the holders of BPK Common Stock an amount equal to the original
issue price. In addition, all or any portion of the shares of BPK Series C
Preferred Stock may be redeemed upon payment of the Purchase Price at any time
by the Company in it sole discretion upon thirty (30) days' written notice to
the holders of BPK Series C Preferred Stock.
The description of the Series C Certificate of Designation set forth above
is qualified in its entirety by reference to the Series C Certificate of
Designation filed as an exhibit to this report and incorporated herein by this
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this report:
Exhibit No. Description of Exhibit
3.1 Certificate of Designation of Series C Convertible Preferred Stock
of BPK Resources, Inc., filed on March 10, 2006.
10.1 Agreement and Plan of Merger, dated March 9, 2006, by and among BPK
Resources, Inc., BPK Resources Acquisition Corp., Graphite
Technology Group, Inc., Derek Hirsch and James E. Olive.
10.2 12% Promissory Note dated as of March 10, 2006 made by Graphite
Technology Group, Inc. in favor of BPK Resources, Inc. in the
principal amount of up to $1,000,000.
10.3 Second Amended and Restated Security Agreement dated as of March 10,
2006 made by Graphite Technology Group, Inc. in favor of BPK
Resources, Inc.
10.4 Option Agreement dated as of March 10, 2006 between Graphite
Technology Group, Inc. and BPK Resources, Inc.
10.5 Form of Securities Purchase Agreement between BPK Resources, Inc.
and the purchasers in the Regulation D offering.
10.6 Form of Securities Purchase Agreement between BPK Resources, Inc.
and the purchasers in the Regulation S offering.
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10.7 Form of Warrant issued by BPK Resources, Inc. to the purchasers in
the Regulation D offering.
10.8 Form of Warrant issued by BPK Resources, Inc. to the purchasers in
the Regulation S offering.
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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.
BPK Resources, Inc.
Date: March 15, 2006 By: /s/ Christopher H. Giordano
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Christopher H. Giordano
Chief Executive Officer
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