SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO.: 0-28887
Date of Report: February 2, 2006
GREENSHIFT CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 22-3328734
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(State of other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
111 Howard Boulevard, Suite 108, Mt. Arlington New Jersey 07856
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(Address of principal executive offices) (Zip Code)
(973) 398-8183
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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:
__ 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
On February 2, 2006, GreenShift entered into a Securities Purchase Agreement
with Cornell Capital Partners, LP, which provided for the purchase by Cornell of
a Convertible Debenture in the amount of $3,849,631.
GreenShift's and Cornell's obligations under the relevant agreements will not
become effective until GreenShift receives the approval of the voting majority
of its shareholders and the remaining shareholders of the Company have been
provided with written notice of that approval.
The conversion price of the Debenture shall be equal to the lesser of the
average closing market price for GreenShift common stock for the five trading
days preceding the date of said written notice or the average of the three
lowest closing market prices of the Company's Common Stock for the thirty days
preceding conversion. Cornell will be entitled to convert the Debenture on the
basis of the conversion price into GreenShift common stock, provided that
Cornell cannot convert into shares that would cause Cornell to own more than
4.9% of GreenShift's outstanding common stock.
Once effective, the Debenture will bear interest at 5% per annum and the
principal amount will be payable on the second anniversary of the effective date
of the Debenture. GreenShift's obligations under the Debenture are secured by a
pledge of all of its assets, subject to Cornell's agreement to subordinate its
security interest to any line of credit that GreenShift obtains from a bank or
other financial institution. GreenShift may prepay the Debenture at any time
without penalty.
GreenShift will pay a commitment fee of $384,963 and a $15,000 structuring fee
to Yorkville Advisors Management, LLC. Accordingly, GreenShift will receive net
proceeds of $3,449,668 upon issuance of the Debenture. GreenShift will also
issue to Cornell a five year Warrant to purchase 11,550,000 common shares at a
price equal to the conversion price of the Debenture.
Simultaneous with the sale of the Debenture to Cornell, GreenShift will assume
certain debentures issued in 2005 by INSEQ Corporation, a GreenShift portfolio
company, to Highgate House Funds, Ltd., totaling $1,150,369. GreenShift will
also issue to Highgate House Funds, Ltd. a warrant to purchase 3,450,000 shares
on terms identical to the terms of the Warrant issued to Cornell.
Additionally, on February 1, 2006, GreenShift entered into a Subscription
Agreement with Highgate House Funds, Ltd., pursuant to which Highgate purchased
3,203,447 shares of GreenShift common stock for $0.084 per share, which amount
was equal to the average of the three lowest closing market prices of the
Company's Common Stock for the thirty days preceding conversion.
Item 9.01 Financial Statements and Exhibits
Exhibits:
10-a Securities Purchase Agreement dated February 2, 2006 among GreenShift
Corporation, Cornell Capital Partners LP and Highgate House Funds, Ltd.
10-b Form of Convertible Debenture due February 2008
10-c Second Amended and Restated Security Agreement dated February 2, 2006
between GreenShift Corporation and Cornell Capital Partners, LP.
10-d Second Amended and Restated Stock Pledge Agreement dated February 2, 2006
among GreenShift Corporation, Cornell Capital Partners, LP, Highgate House
Funds, Ltd. and David Gonzalez, Esq.
10-e Form of Warrant to Purchase Common Stock to be issued to Cornell Capital
Partners and Highgate House Funds, Ltd.
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.
GREENSHIFT CORPORATION
/S/ Kevin Kreisler
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By: KEVIN KREISLER
Chief Executive Officer
Date: February 2, 2006