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): May 22, 2006
(Exact
name of registrant as specified in its charter)
|
Delaware
|
000-15260
|
88-0218411
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
| |
|
|
|
200
Queens Quay East, Unit #1
Toronto,
Ontario, Canada,
|
M5A
4K9
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
|
|
Registrant's
telephone number, including area code
|
800-710-2021
|
|
|
|
| |
|
|
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):
o Written
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting
material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o 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 or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On
February 24, 2006, the Company filed a Current Report on Form 8-K with the
Securities and Exchange Commission in order to report the issuance and sale
of
10% Convertible Promissory Notes (the “Original Notes”) in the aggregate
principal face amount of $450,000 and accompanying warrants to purchase shares
of the Company’s Common Stock (the “Original Warrants”). On or after February
24, 2006, and prior to the date hereof, the Company issued additional Original
Notes in the aggregate principal face amount of $90,000 and additional Original
Warrants to certain investors. The terms and conditions governing the Original
Notes and Original Warrants were described in detail in the Company’s Current
Report on Form 8-K filed with the Securities and Exchange Commission on February
24, 2006 and forms of the Original Notes and Original Warrants were filed as
exhibits to such filing.
On
or
after May 14, 2006, the Company issued and sold 10% Convertible Promissory
Notes
in the aggregate principal face amount of $638,000 (the “New Notes”) to certain
investors (each such investor, a “Purchaser” and collectively, the
“Purchasers”). Each Purchaser of a New Note, received an accompanying warrant to
purchase shares of the Company’s Common Stock (the “New Warrants”). Each New
Warrant is exercisable for a one year period and entitles a Purchaser to invest
an amount equal to 150% of such Purchaser’s investment in the New Notes in
additional shares of the Company’s Common Stock at an exercise price equal to
the greater of (i) $0.175, or (ii) the ten day trading average of shares of
the
Company’s Common Stock on the OTC Bulletin Board for the ten trading days ending
on the day prior to the date of exercise.
The
Notes
mature one year after issuance and accrue interest at an interest rate equal
to
10% per annum, payable at maturity. Each Note may be converted, at the option
of
the Purchaser holding such Note, into shares of the Company’s Common Stock at a
conversion price equal to the greater of (i) $0.175, or (ii) the ten day trading
average of shares of the Company’s Common Stock on the OTC Bulletin Board for
the ten trading days ending on the day prior to the date of conversion.
Upon
the
occurrence of an “Event of Default” (as defined in each Note), the principal
amount of the Notes and accrued and unpaid interest thereon may become
immediately due and payable by the Company. Such Events of Default include:
(i)
the Company fails to pay any monetary obligation due under the Note after having
received seven (7) business days prior written notice that such obligation
has
become due; (ii) the Company fails, for seven (7) days after written notice,
to
comply with any other material term, condition, covenant, or agreement in the
Note; (iii) the Company becomes insolvent, makes an assignment for the benefit
of creditors, calls a meeting of its creditors to obtain any general financial
accommodation or suspends business; or (iv) a case under the Bankruptcy Code
is
commenced by or against the Company or a liquidator, trustee, custodian or
similar officer is appointed for all or a material portion of the Company's
assets, and such case is not dismissed or such appointment is not rescinded
within thirty (30) days thereafter.
A
form of
a New Note is attached hereto as Exhibit 4.1 and a form of a New Warrant is
attached hereto as Exhibit 4.2
The
foregoing descriptions of the New Notes and New Warrants do not purport to
be
complete and each such description is qualified in its entirety by reference
to
Exhibit 4.1 and Exhibit 4.2.
Item
3.02 Unregistered Sales of Equity Securities
The
Old
Notes and Old Warrants and New Notes and New Warrants were not registered under
the Securities Act. The date, title and amount of securities sold, as well
as
the total offering price and the terms of conversion of the New Notes and the
terms relating to the exercise of the New Warrants, are described under Items
1.01 and 2.03 above. The offer and sale of the Old Notes and Old Warrants and
New Notes and New Warrants were exempt from the registration requirements of
Section 5 of the Securities Act, as amended, pursuant to Section 4(2) of the
Securities Act and Rule 506 of Regulation D thereunder. The Company relied
on
the following facts in determining that the offer and sale of the Old Notes
and
Old Warrants and New Notes and New Warrants qualified for the exemption provided
by Rule 506:
| |
·
|
The
offer and sale satisfied the terms and conditions of Rule 501 and
502
under the Securities Act; and
|
| |
·
|
Pursuant
to Rule 506 under the Securities Act, no more than 35 purchasers
purchased
the Old Notes and Old Warrants and New Notes and New Warrants, as
determined in accordance with Rule 501(e) under the Securities
Act.
|
Item
9.01 Financial Statements and Exhibits.
Exhibits
|
Exhibit
Number
|
|
Description
|
|
4.1
|
|
Form
of 10% Convertible Promissory Note
|
|
4.2
|
|
Form
of Warrant
|
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.
| |
|
|
| |
ELEMENT
21
GOLF COMPANY |
|
|
|
| Date:
May 19, 2006 |
By: |
/s/ Nataliya
Hearn |
| |
Name:
Nataliya Hearn |
| |
Title:
President |
Exhibit
Index
|
Exhibit
Number
|
|
Description
|
|
4.1
|
|
Form
of 10% Convertible Promissory Note
|
|
4.2
|
|
Form
of Warrant
|