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 21, 2012
ITRONICS INC.
-----------------------------------------------------------------------------------------------------------
Texas
33-18582
75-2198369
(State
or other jurisdiction
(Commission File
(IRS
Employer
of
incorporation)
Number)
Identification
No.)
6490 So. McCarran Boulevard, Building C, Suite 23 Reno, Nevada
89509
(Address
of Principal Executive Offices)
Zip
Code
Registrants telephone number, including area code:
(775) 689-7696
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 3.02 Unregistered Sales of Securities
On December 21, 2012 Dr. John W. Whitney, our President, converted
$500,000 in cash loans into restricted common stock of the Company. Dr. Whitney loaned the
funds over several years going back to 2004. The conversion was at $0.17 per share, for a
total of 2,941,176 restricted common shares. The conversion price is computed as the
volume weighted average trading price of the stock for the 10 trading days prior to the
conversion date. In addition, Dr. Whitney received a three year warrant to acquire
1,470,588 restricted common shares at $0.2125 per share. The conversion terms and the
warrant are under the same terms as is presently being offered to accredited investors in
a Private Placement of Common Stock to raise $500,000. The Private Placement is more fully
described below.
A program to convert the Series 2000 Convertible Notes into Common
Stock was completed in October 2012. Since the inception of the program in September 2008,
the Company issued 1,839,185 common shares in payment of $860,000 in principal and
$1,786,662 in accrued interest, for a total of $2,646,662.
During the period May 2010 to February 2012 a total of 163,577
restricted common shares were issued to four investors for the private placement of cash
totaling $95,625. A three year warrant for 62,500 restricted common shares exercisable at
$0.50 per share was issued in connection with one such private placement in February 2012.
During the period March 2010 to January 2012 a total of 116,914
restricted common shares, valued at $169,470, were issued to four consultants for
management consulting services.
During the period June 2010 to May 2011 a total of 8,391 restricted
common shares, valued at $16,284, were issued to two investors in payment of interest on
short-term loans.
In February 2010 4,647 restricted common shares each, valued at $7,500
each, were issued to Dr. John W. Whitney and Howland Green for their services as Directors
of the Company.
In February 2010 a total of 50 restricted common shares, valued at $86,
were issued to two employees as compensation for services. In May 2010 1,052 restricted
common shares, valued at $2,208, were issued to one employee as compensation for services.
During the period of January 2010 to June 2010 a total of $115,000 was
received from five investors from the private placement of 2009 Series A 10% Callable
Convertible Promissory Notes. These notes are for five years and are convertible into
common shares one year after the date of the note at $2.00 per share, for a total of
57,500 restricted common shares. The
2
Company may also call the notes after one year if the Companys
common share price closes above $4.00 for 60 consecutive trading days.
In April 2010 a five year warrant for 2,000 restricted common shares
exercisable at $2.00 per share was granted to a consultant for management consulting
services. In July 2012, a three year warrant for 15,000 restricted common shares
exercisable at $0.40 per share was granted to a consultant for management consulting
services.
Beginning with the fourth quarter of 2009, the Company has three option
programs for employees and certain consultants. The first is for employees and consultants
who have deferred a portion or all of their cash compensation, loaned cash to the Company
and its subsidiaries, or have deferred the interest earned on deferred compensation. The
number of restricted common shares underlying the option grants is 10% of the incremental
increase in deferred compensation, loans, or deferred interest from quarter to quarter.
These options have a ten year term and are exercisable at $2.00 per share and have a
cashless exercise provision.
The second option category is an incentive option for certain members
of the management team to pursue equity or convertible debt funding for the Company. The
option grants apply to private placements for cash and conversion into common stock of
convertible notes issued for cash. The number of common shares underlying the grants is a
specified percentage of the shares issued in private placements for cash or upon
conversion of convertible notes by non-employee, non-consultant investors. The respective
percentages are Dr. John W. Whitney, President, 20%; Michael C. Horsley, Controller, 5%;
Howland S. Green, Director, 1%; Gregory S. Skinner, Secretary, 1%. These options have a
ten year term and are exercisable at prices ranging from $0.32 to $1.27 per share. The
exercise price of the options is equal to the private placement or note conversion price
for each transaction. The total compensation value under this program is capped at $1
million per year per person. Compensation value is defined as the estimated fair value of
the options as calculated and expensed for financial reporting purposes.
The third option category is for compensation purposes. Option or
warrant terms are negotiated with individual employees or consultants. These options and
warrants have terms ranging from five to ten years and are exercisable at prices ranging
from $1.50 to $200.00.
3
The below table summarizes by category the options and warrants granted
from the fourth quarter of 2009 through the third quarter of 2012.
|
|
Number of
Options and Warrants Granted Based On
:
|
|
|
Category 1
|
Category 2
|
Category 3
|
|
|
|
Deferred Salary,
|
Management
|
Negotiated
|
Combined
|
|
Position
|
Loans and Interest
|
Options
|
Options/Warrants
|
Total
|
John W. Whitney
|
President
|
130,442
|
50,829
|
-
|
181,271
|
Michael Horsley
|
Controller
|
30,651
|
12,707
|
-
|
43,358
|
Howland S. Green
|
Director
|
-
|
2,541
|
-
|
2,541
|
Gregory S. Skinner
|
Secretary
|
-
|
2,541
|
-
|
2,541
|
7 other employees
|
|
|
|
|
|
and consultants
|
Various
|
105,062
|
-
|
162,626
|
267,688
|
|
|
|
|
|
|
Totals
|
|
266,155
|
68,618
|
162,626
|
497,399
|
These employees and consultants can convert their deferred salary,
loans, or accrued interest into restricted common stock either at the volume weighted
average stock price for the ten trading days prior to the date of conversion or under the
terms of an existing Private Placement of equity or convertible debt. As of September 30,
2012 deferred salary and accrued interest that may be converted under these terms amounted
to $2,066,242 and $1,402,362, respectively. As of December 21, 2012 the amount of loans
that may be converted under such terms totaled $41,239.
The number of shares issued or options and warrants granted prior to
the reverse split in June 2010 has been adjusted to the equivalent post-split amounts in
all the above listed transactions, where applicable.
On December 19, 2012 the Board of Directors resolved to reset the
exercise price for existing employee and consultant options to $0.20 per share. This
applies to options to acquire a total of 576,115 restricted common shares. These options
had exercise prices ranging from $0.32 to $500.00 per share.
All of the above offerings and sales were deemed to be exempt under
rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No
advertising or general solicitation was employed in offering the securities. The offerings
and sales were made to a limited number of persons, all of whom were accredited investors,
business associates of Itronics Inc. or executive officers of Itronics Inc., and transfer
was restricted by Itronics Inc. in accordance with the requirements of the Securities Act.
In addition to representations by the above-referenced persons, we have made independent
determinations that all of the above-referenced persons were accredited or sophisticated
investors, and that they were capable of analyzing the merits and risks of their
investment, and that they understood the speculative nature of their investment.
4
Furthermore, all of the above-referenced persons were provided with
access to our Securities and Exchange Commission filings.
After issuance of the restricted common shares to Dr. Whitney described
above, there are 7,782,055 common shares issued and outstanding, of which Dr. Whitney owns
3,256,029 shares, or 41.8%.
Item 8.01 Other Events
On December 19, 2012 the Board of Directors authorized Management to
conduct a private placement of Restricted Common Share Units, for accredited investors, to
raise up to $500,000, plus a 20% overallotment. Each Unit consists of one restricted
common share and a three year warrant for one-half share. The purchase price of each Unit
is calculated on the volume weighted average trading price of the last 10 trading days
prior to the investment date. The exercise price of the warrants is 125% of the price of
the Unit. The minimum investment is $5,000 and the maximum investment is the uncommitted
portion of the $500,000 or up to 4.99% of the outstanding common shares at the time of the
purchase commitment, whichever is less. No funds have been received from the Placement to
date.
During the period July 2012 to December 2012, Whitney & Whitney,
Inc., a wholly owned subsidiary of the Company, converted $450,000 of intercompany loans
and expenses into restricted common stock of Auric Gold & Minerals, Inc. (Auric)
Whitney & Whitney, Inc. now owns 69.5% of Auric. An update on the Auric Fulstone
Project was presented in a press release issued by the Company on October 11, 2012.
SIGNATURE
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.
ITRONICS INC.
(Registrant)
Date:
December 28, 2012
By:
/S/ John W. Whitney
John
W. Whitney
President,
Treasurer and Director
(Principal
Executive and Financial
Officer)
5
Itronics (CE) (USOTC:ITRO)
Historical Stock Chart
From May 2024 to Jun 2024
Itronics (CE) (USOTC:ITRO)
Historical Stock Chart
From Jun 2023 to Jun 2024