Business Context and Reporting Period
Company: Coffee Holding Co., Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: September 27, 2011
Event: Entry into a Material Definitive Agreement for a registered direct public offering.
Key Financial Metrics and Transaction Details
- Offering Structure: Sale of 890,000 Units by the Company and 200,000 shares of Common Stock by Selling Stockholders (Andrew Gordon and David Gordon).
- Unit Composition: Each Unit consists of one share of Common Stock and three-tenths (0.3) of a warrant to purchase one share of Common Stock.
- Pricing:
- Unit Purchase Price: $10.40 per Unit.
- Selling Stockholder Share Price: $9.92 per share.
- Warrant Terms:
- Exercise Price: $13.59 per share.
- Exercisability: Begins six months and one day after closing; expires five years thereafter.
- Ownership Limitations: Exercisability limited if holder would own more than 4.9% or 9.9% of outstanding Common Stock.
- Expected Net Proceeds to Company: Approximately $8.3 million (after deducting fees and expenses, excluding warrant exercise proceeds).
- Placement Agent Fees: 5.5% cash fee plus 1.5% corporate finance fee of gross proceeds.
- Expense Reimbursement: Up to the lesser of $90,000 or 8% of gross proceeds (less placement fees).
- Post-Offering Share Count: 6,385,823 shares of Common Stock outstanding (excluding warrant exercises).
Material Changes and Agreements
The Company entered into a Placement Agency Agreement with Roth Capital Partners, LLC and Maxim Group LLC to facilitate the offering. Additionally, a Subscription Agreement was executed with institutional investors. The transaction is a takedown from the Company's effective Form S-3 shelf registration statement (File No. 333-176412).
Lock-Up Provision: The Company and Selling Stockholders agreed not to issue or sell additional securities for 60 days following the closing of the Offering, subject to certain exceptions.
Guidance, Outlook, and Risks
Closing Date: The Offering is expected to close on or before September 30, 2011.
Forward-Looking Statements: The filing contains forward-looking statements regarding the public offering. The Company disclaims any obligation to update these statements and notes that actual results may differ materially due to risks disclosed in other Commission filings.
Legal Opinion: The Company intends to file an amendment to this report containing a legal opinion from Lionel Sawyer & Collins regarding the legality of the issuance and sale of the securities.
Investor Verification Checklist
- Verify the final closing date and actual net proceeds received by the Company.
- Confirm the final number of shares outstanding post-closing.
- Review the attached Placement Agency Agreement (Exhibit 10.1) and Subscription Agreement (Exhibit 10.2) for specific covenants and conditions.
- Monitor the filing of the legal opinion regarding the legality of the securities issuance.
- Assess the impact of the 60-day lock-up period on future capital raising activities.