Eagle Bulk Shipping Inc. (NASDAQ:EGLE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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Entry into a Material Definitive |
On December 13, 2016, Eagle Bulk Shipping Inc. (the Company,
Eagle Bulk, we, our or similar terms), a Republic of the Marshall
Islands corporation, entered into a Stock Purchase Agreement (the
Purchase Agreement) with certain investors (the Investors), to
which the Company agreed to issue to the Investors in a private
placement (the Private Placement) approximately 22.2 million
shares of the Companys common stock, par value $0.01 per share
(the Common Stock), at an initial purchase price of $4.50 per
share, for aggregate gross proceeds of $100.0 million. The
Company plans to use the proceeds from the Private Placement for
the acquisition of dry bulk tonnage and general corporate
purposes.
The closing of the Private Placement and the issuance of the
shares of Common Stock is subject to customary closing
conditions, as well as Company shareholder approval in compliance
with TheNASDAQStock Market LLC (NASDAQ)Listing Rule 5635(d) and
NASDAQ Listing Rule 5635(c) (the NASDAQ Approvals). The Company
will file a preliminary proxy statement (the Preliminary Proxy
Statement) followed by a definitive proxy statement (the
Definitive Proxy Statement and together with the Preliminary
Proxy Statement, the Proxy Statements) with the Securities and
Exchange Commission (the SEC) containing the NASDAQ Approvals to
be voted on by the Companys shareholders at a special meeting
(the Special Meeting) expected to be held early in 2017. Each
Investor severally agreed with the Company in the Purchase
Agreement to vote all shares of the Common Stock held by such
Investors (and eligible to be voted) in favor of the NASDAQ
Approvals.
Paul Leand, Jr., the Chairman of the Board of Directors of Eagle
Bulk, Gary Vogel, the Companys Chief Executive Officer and a
director, Frank De Costanzo, the Chief Financial Officer and
Secretary of Eagle Bulk, and Michael Mitchell, the General
Counsel of the Company, and two additional Company employees, are
among the Investors to be issued Common Shares to the Private
Placement. Other Investors include, among others, certain current
shareholders of the Company.
The Common Stock to be issued to the Investors to the Private
Placement will represent approximately 32% of the Companys
outstanding Common Stock after such issuance, and will have the
effect of diluting the Companys existing shareholders that are
not Investors in the Private Placement as well as any Investors
in the Private Placement that did not agree to purchase a
proportionate number of shares of Common Stock in the Private
Placement relative to their current holdings of Common Stock.
In connection with the Purchase Agreement, the Company and
Fearnley Securities Inc., the placement agent for the Private
Placement and a representative of the Investors, will enter into
an escrow agreement with an escrow agent (the Escrow Agent). On
or prior to 4:00 p.m. New York City time on December 14, 2016,
each Investor will fund its respective purchase price for the
Common Stock with the Escrow Agent, and the funds will be
released to the Company and the Company will issue the shares of
Common Stock in the Private Placement after the fulfillment of
all of the closing conditions. The closing of the Private
Placement must occur no later than 10 business days following the
Special Meeting.
The Purchase Agreement also contains representations and
warranties and other provisions customary for transactions of
this nature.
The foregoing summary of the Purchase Agreement is not complete
and is qualified in its entirety by reference to the full text of
the Purchase Agreement, which is filed as Exhibit 10.1 to this
Current Report on Form 8-K and is incorporated herein by
reference.
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Item 3.02 |
Unregistered Sales of Equity Securities. |
The information under Item 1.01 of this Current Report on Form
8-K is incorporated by reference into this Item 3.02. The
Common Stock will be issued to the private placement exemption
from registration under Section 4(a)(2) of the Securities Act
of 1933, as amended (the Securities Act) and Rule 506 of
Regulation D promulgated under the Securities Act. Each of the
Investors represented that they are an accredited investor as
defined in Rule 501 of Regulation D promulgated under the
Securities Act. The Common Stock issued in the Private
Placement will be restricted from transfer except to an
effective registration statement under the Securities Act or an
available exemption from such registration.
ADDITIONAL INFORMATION
The Common Stock has not been registered under the Securities
Act and may not be sold in the United States absent an
applicable exemption from registration requirements of the
Securities Act and applicable state laws. This Current Report
on Form 8-K does not constitute an offer to sell or the
solicitation of an offer to buy any securities of the Company
nor shall it constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale is
unlawful.
The Definitive Proxy Statement will be distributed to the
Companys shareholders prior to the Special Meeting. Investors
and shareholders are urged to read the Definitive Proxy
Statement, together with all other relevant documents, when it
becomes available because they will contain important
information about the matters before the shareholders at the
Special Meeting, including the issuance of shares of Common
Stock being sold in the Private Placement described herein.
Investors and shareholders are able to obtain the documents
(once available) free of charge at the SECs website
(www.sec.gov) or for free from the Company by contacting Frank
De Costanzo,Chief Financial Officer andSecretary of Eagle Bulk
Shipping Inc., at 300 First Stamford Place, 5th Floor,
Stamford, Connecticut 06902, telephone (203) 276-8100.
The Company and certain of its directors and executive officers
may be deemed to be participants in the solicitation of proxies
from the Companys shareholders at the Special Meeting or any
adjournment or postponement thereof. Information about the
Companys directors and executive officers is contained in its
definitive proxy statement on Schedule 14A filed with the SEC
on November 4, 2016.
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Item 5.02 |
Departure of Directors or |
The information set forth under Item 1.01 of this Current
Report on Form 8-K is hereby incorporated by reference into
this Item 5.02, regarding Messrs. Vogel and De Costanzo being
Investors in the Private Placement. The Common Stock is listed
on the NASDAQ Global Select Market and, as such, we are subject
to the NASDAQ Stock Market Rules. Under the stock exchanges
interpretations of NASDAQ Listing Rule 5635(c), such issuance
of the Common Stock in the Private Placement at a price less
than the market value of the stock is considered a form of
equity compensation. In the Private Placement, Messrs. Vogel
and De Costanzo purchased 20,000 and 6,667 shares of Common
Stock, respectively, for a total price of $36,200 and $12,067,
respectively, below the closing market price on December 8,
2016.
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Item 7.01 |
Regulation FD Disclosure. |
On December 13, 2016, Eagle Bulk issued a press release
announcing the entry into the Common Stock Purchase Agreement.
A copy of the press release is attached hereto as Exhibit 99.1
and is hereby incorporated by reference.
Cautionary Statement Regarding Forward-Looking
Statements
This report contains forward-looking statements within the
meaning of Section 27A of the Securities Act Securities Act,
Section 21E of the Exchange Act and the Private Securities
Litigation Reform Act of 1995, and are intended to be covered
by the safe harbor provided for under these sections. These
statements may include words such as believe, estimate,
project, intend, expect, plan, anticipate, and similar
expressions in connection with any discussion of the use of
proceeds from the Private Placement, the timing of the filing
of the Proxy Statements, the timing of events related to the
Private Placement, the timing or nature of future operating or
financial performance or other events. Forward-looking
statements reflect managements current expectations and
observations with respect to future events and financial
performance. Where we express an expectation or belief as to
future events or results, such expectation or belief is
expressed in good faith and believed to have a reasonable
basis. However, our forward-looking statements are subject to
risks, uncertainties, and other factors, which could cause
actual results to differ materially from future results
expressed, projected, or implied by those forward-looking
statements.
The principal factors that affect our financial position,
results of operations and cash flows include, charter market
rates, which have declined significantly from historic highs,
periods of charter hire, vessel operating expenses and voyage
costs, which are incurred primarily in U.S. dollars,
depreciation expenses, which are a function of the cost of
our vessels, significant vessel improvement costs and our
vessels estimated useful lives, and financing costs related
to our indebtedness. Our actual results may differ materially
from those anticipated in these forward-looking statements as
a result of certain factors which could include the
following: (i) changes in demand in the dry bulk market,
including, without limitation, changes in production of, or
demand for, commodities and bulk cargoes, generally or in
particular regions; (ii) greater than anticipated levels of
dry bulk vessel new building orders or lower than anticipated
rates of dry bulk vessel scrapping; (iii) changes in rules
and regulations applicable to the dry bulk industry,
including, without limitation, legislation adopted by
international bodies or organizations such as the
International Maritime Organization and the European Union or
by individual countries; (iv) actions taken by regulatory
authorities; (v) changes in trading patterns significantly
impacting overall dry bulk tonnage requirements; (vi) changes
in the typical seasonal variations in dry bulk charter rates;
(vii) changes in the cost of other modes of bulk commodity
transportation; (viii) changes in general domestic and
international political conditions; (ix) changes in the
condition of the Companys vessels or applicable maintenance
or regulatory standards (which may affect, among other
things, our anticipated drydocking costs); (x) the outcome of
legal proceedings in which we are involved; and (xi) and
other factors listed from time to time in our filings with
the SEC.
We disclaim any intent or obligation to update publicly any
forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be
required under applicable securities laws. If we update one
or more forward-looking statements, no inference should be
made that we will make additional updates with respect to
those or other forward-looking statements.
Item 9.01 Financial Statements and
Exhibits
(d) Exhibits
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Exhibit Number |
Description |
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10.1 |
Stock Purchase Agreement, dated as of December 13, |
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99.1 |
Press Release issued by Eagle Bulk Shipping Inc. on |
About Eagle Bulk Shipping Inc. (NASDAQ:EGLE)
Eagle Bulk Shipping Inc. (NASDAQ:EGLE) Recent Trading Information
Eagle Bulk Shipping Inc. (NASDAQ:EGLE) closed its last trading session down -0.41 at 5.20 with 201,091 shares trading hands.
