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000-31380
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82-0096527
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(Commission
File Number)
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(IRS
Employer Identification No.)
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630
E. Mullan Ave. Suite D, Osburn, Idaho
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83849
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Item 1.01
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Entry
into a Material Definitive Agreement
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The
information set forth in Item 2.03 is hereby incorporated by reference in
its entirety.
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
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Between April
7 and April 9, 2009, Atlas Mining Company (the “Company”) sold to
accredited investors $1,500,000 principal amount of Series 10%
PIK-Election Convertible Notes due 2018 (the “Notes”) and entered into a
Registration Rights Agreement in connection with the shares of common
stock to be issued upon conversion of such mandatorily convertible Notes.
In April, 2009, the Board of Directors of the Company authorized the Notes
to be included in the Series 10% PIK –Election Convertible Notes due 2018
authorized in December 2008 (the “Series”) as disclosed in the
8-K of the Company filed on January 6, 2009.The principal under the Notes
is due December 15, 2018 subject to earlier acceleration or conversion of
the Notes as described below. The Notes bear interest at the rate of 10%
per annum payable (including by issuance of additional in kind notes)
semi-annually in arrears on June 15 and December 15 of each year
commencing June 15, 2009. The Notes may be converted at the option of the
Noteholder at any time there is sufficient authorized unissued common
stock of the Company available for conversion of the Series (including
those notes issued in December 2008). The Notes will be mandatorily
converted when (i) sufficient common stock is available for conversion of
all the notes in the Series, (ii) the average closing bid price or market
price of Company common stock for the preceding 5 trading days is above
the Strike Price (as defined below), and (iii) a registration statement is
effective and available for resale of all of the converted shares or the
Noteholder may sell such shares under Rule 144 under the Securities
Act. The number of shares issued on conversion of a Note will
be derived by dividing the principal and accrued interest on the Note by
$0.35 (the “Strike Price”). The Strike Price will be subject to adjustment
in the event of a dividend or distribution on Company’ common stock in
shares of common stock, subdivision or combination of Company outstanding
common stock, or reclassification of Company’s outstanding common
stock. A Noteholder may accelerate the entire amount due under
its Note upon the occurrence of certain events of default or, after July
1, 2010, in the event there is insufficient common stock available for
conversion of all the notes in the Series. The Company may not use the
proceeds of the loans represented by the Notes to pay damages or voluntary
settlement proceeds to plaintiffs in the securities litigation lawsuit
against the Company. This description is qualified in its entirety by
reference to the form of 10% PIK-Election Convertible Note due
2018 which is filed as Exhibit 99.1 to this Form 8-K and is incorporated
herein by reference.
Issuance
of the Notes is made in reliance upon the exemption found in Section 4(2)
of the Securities Act of 1933.
The
Registration Rights Agreement provides that within 10 days after the date
on which the Articles of Incorporation of the Company are amended so that
there are sufficient shares of common stock so that all of the notes of
the Series may be converted, Company will notify the holders of such
notes. If a Noteholder desires to include in a registration
statement under the Securities Act all or part of such Noteholder’s common
stock issuable on such conversion, such Noteholder must within 10 days
after receipt of such notice notify Company of the number of shares of
common stock such holder wishes to include in the registration
statement. Thereafter, subject to certain exceptions, the
Company will file a registration statement with the Securities and
Exchange Commission under the Securities Act of all common stock which the
Noteholder requests be registered. This description
is qualified in its entirety by reference to the form of Registration
Rights Agreement which is filed as Exhibit 99.2 to this Form 8-K and is
incorporated herein by reference.
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Item
3.02
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Unregistered
Sales of Equity Securities
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The
information contained in Item 2.03 above is incorporated herein by
reference in its entirety. Issuance of the Note is made in reliance upon
the exemption found in Section 4(2) of the Securities Act of
1933.
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Item
9.01
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Financial
Statements and Exhibits
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Exhibit 99.1 Convertible
Note
Exhibit 99.2
Registration Rights Agreement
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ATLAS
MINING COMPANY
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(Registrant)
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Date: April
9, 2009
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By:
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/s/
Andre Zeitoun
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Andre
Zeitoun,
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Chief
Executive Officer and President
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