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TFER > SEC Filings for TFER > Form 8-K on 26-Sep-2013All Recent SEC Filings

Show all filings for TITAN IRON ORE CORP. | Request a Trial to NEW EDGAR Online Pro



Entry into a Material Definitive Agreement, Financial Statements and Exhibit

Item 1.01 Entry into a Material Definitive Agreement.

Convertible Note with Magna Group LLC.

On September 18, 2013, the Company issued a 12% Convertible Promissory Note (the "Magna Note") to Magna Group LLC ("Magna"), in the face amount of $200,000, with a term to September 18, 2014 (the "Magna Maturity Date"). Interest accrues daily on the outstanding principal amount of the Note at a rate per annual equal to 12% on the basis of a 365-day year The Magna Note was issued in exchange for Magna's surrender to the Company of $200,000 of the face value of the original $7 million principal amount Promissory Note dated April 2, 2012, granted by the Company in favor of Wyomex LLC (the "Wyomex Note"). By virtue of an Assignment Agreement dated September 18, 2013, Magna purchased $200,000 of the Wyomex Note, and the parties agreed to exchange this amount of the Wyomex Note for the Magna Note. Provided certain conditions are met, the Magna Note, subject to certain conversion restrictions, is convertible into common stock at any time after the issuance date, at Magna's option, at a conversion price equal to a 20% discount to the volume weighted average sales prices ("VWAP"), as reported by Bloomberg LP for the five (5) trading days prior to conversion. In the event the Company elects to prepay the Magna Note in full or in part, the Company is required to pay principal, interest and any other amounts owing multiplied by 130%. We must not affect any conversion of the Note and Magna does not have the right to convert the Note, to the extent that Magna and its affiliates would beneficially own in excess of 4.99% of our outstanding common stock. In the event of default, the amount of principal and interest not paid when due bear interest at the rate of 22% per annum and the note becomes immediately due and payable.

We issued the Note described herein in reliance upon the exemptions from registration afforded by Section 4(2) of the Securities Act of 1933 and Rule 506 promulgated under the Securities Act of 1933.

The full text of the forms of the Note, and related documents described above are attached hereto as Exhibits 10.1 through 10.2 below.

The Company previously reported that it had entered into a one year Promissory Note (the "JMJ Note") with JMJ
Financial ("JMJ") on June 26, 2013, which provides for tranches of financing of up to $275,000 in the aggregate. All amounts funded by JMJ bear a 10% Original Issue Discount ("OID") fee , and are interest-free for 90 days from date of each funding, following which said amounts bear a one-time interest charge of 12%. The Company has the right to prepay without penalty the amount of any funding within 90 days. JMJ funded $75,000 at closing on June 26, 2013, (the "Initial Funding"). As of September 25, 2013 the parties agreed on an additional funding of $25,000. The term of each funding under the JMJ Note is one year (the "JMJ Maturity Date"), upon which the outstanding principal amount for each funding is payable. Amounts funded plus OID and interest under the JMJ Note are convertible into common stock at any time after the issuance date, at the holder's option, at a conversion price equal to the lesser of (i) $0.07, and
(ii) 60% of the average of the two lowest closing prices in the 20 trading days previous to the conversion. JMJ does not have the right to convert the JMJ Note, to the extent that JMJ would beneficially own in excess of 4.99% of our outstanding common stock. The Company paid no legal fees, expenses, or commissions on the net amounts received from JMJ.

The Company also previously reported that on April 2, 2013, we entered into a securities purchase agreement (the "Global SPA") with GCA Strategic Investment Fund, Ltd. ("Global"), pursuant to which we sold to Global a $235,000 face value, non-interest bearing Convertible Bridge Note (the "Global Note") with a term to September 20, 2013 (the "Maturity Date"). Past due amounts under the Global Note accrue interest at 18% per annum. During the term of the Global Note, Global converted $37,000 of principal into common shares, leaving a balance of $198,000 at Maturity Date. This balance is due and owing from the Company to Global, and the parties are in discussions regarding a resolution to the obligation.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Exhibit Description

10.1 Convertible Note with Magna Group LLC

10.2 Assignment Agreement with Wyomex LLC and Magna Group LLC

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