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): February
29, 2008
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SMF
ENERGY CORPORATION
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(Exact
name of registrant as specified in its
charter)
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DELAWARE
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000-21825
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65-0707824
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
Number)
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200
W. Cypress Creek Rd., Suite 400
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Fort
Lauderdale, Florida
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33309
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (954)
308-4200
(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):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive Agreement
On
March
6, 2008, SMF Energy Corporation (the “Company”) and its subsidiaries, SMF
Services, Inc. and H & W Petroleum Company, entered into a Fourteenth
Amendment to the September 26, 2002 Loan and Security Agreement with
the
Company’s primary lender, Wachovia Bank, N.A.
Pursuant
to the amendment, the Company and the bank extended the term of the
agreement
from
June 30, 2008 to December 31, 2008
and
agreed to improve the Company’s cash availability under the facility by (i)
amending
the
fixed charge coverage ratio covenant to lower
the
average excess availability at
the
end of each calendar month to $1,200,000 for February 2008 and thereafter;
and
(ii)
amending
the
excess availability covenant to require minimum daily availability of $750,000
after
December 31, 2007, subject to a reduction to $500,000 during specified
periods.
A copy
of the Fourteenth Amendment is attached hereto as Exhibit 10.1 and incorporated
herein by reference.
Item
3.02 Unregistered Sales of Equity Securities
On
February 29, 2008, the Company sold $2.52 million in equity securities (the
“Offering”), consisting of 4,587 shares of Series A Preferred Stock. In the
Offering, the Company converted the entire $2 million principal balance of
the
short-term promissory notes issued by the Company on November 19, 2007(the
“Notes”), plus a portion of the accrued but unpaid interest thereon. The Notes
were converted into shares of Series A Preferred Stock at a conversion price
of
$550.00 for one share of Series A Preferred Stock. In addition, the Company
also
sold $516,450 of Series A Preferred Stock for cash, at a price of $550.00 per
share.
Each
share of Series A Preferred Stock is convertible into
1,000 shares of the Company’s common stock at a price per share of $0.55 per
share, a 10% premium above the
closing
price of the Company’s common stock February 29, 2008, which was $0.50.
The
Company has agreed to use its best efforts to register for resale of the shares
of the Company’s common stock into which the Series A Preferred Stock may be
converted, under the Securities Act of 1933, as amended (the
“Act”).
The
offer
and sale of the Series A Preferred Stock and the underlying shares of the
Company’s common stock into which the Series A Preferred Stock are convertible
were exempt from registration under the Act as a private offering to “accredited
investors” under Sections 4(2) and 4(6) of the Act and Regulation D promulgated
thereunder.
The
information provided in Item 5.03 of this Current Report on Form 8-K regarding
the terms of conversion of the Series A Preferred Stock is incorporated by
reference into this Item 3.02.
Item
3.03 Material Modification to Rights of Security Holders
The
provisions of Item 5.03 are incorporated by reference in this Item
3.03.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
On
March
6, 2008, the Company filed with the Secretary of State of Delaware a Certificate
of Designation of Series A Convertible Preferred Stock (the “Certificate”). The
Certificate authorizes the issuance of up to 10,000 shares of Series A Preferred
Stock, which has such rights, qualifications, limitations and restrictions
as
are set forth in the Certificate and described below.
Ranking.
The
Series A Preferred Stock ranks senior to the common stock, $0.01 par value
(the
“Common Stock”) of the Company as to the payment of dividends and distribution
of assets.
Liquidation
Preference.
Upon
liquidation, dissolution or winding up of the Company, holders of Series A
Preferred Stock are entitled to be paid out of the assets of the Company an
amount per share of Series A Preferred Stock equal to the greater of: (i) the
original issue price of the Series A Preferred Stock, plus all accumulated
but
unpaid dividends; or (ii) the fair market value of the Series A Preferred Stock
on an as-converted to Common Stock basis, plus all accumulated but unpaid
dividends.
Voting.
Each
holder of Series A Preferred Stock is entitled to one vote at each meeting
of
stockholders of the Company with respect to any and all matters presented to
the
stockholders of the Company.
Dividends.
Dividends will be paid on the Series A Preferred Stock when, as and if declared
by the Board of Directors, but only out of funds that are legally available
therefor, in quarterly cash dividends at the rate of eighteen percent (18%)
per
annum of the sum of the Series A Original Issue Price of $550 per share,
provided, however, that if the Company reports in an SEC filing that it has
achieved positive Earning Before Interest, Taxes, Depreciation and Amortization
for two consecutive fiscal quarters, the quarterly cash dividend shall be
changed from eighteen percent (18%) per annum to twelve percent (12%) per annum
of the sum of the Series A Original Issue Price effective two weeks after notice
of such change is transmitted to holders of the Series A Preferred Stock.
Conversion.
Each
share of Series A Preferred Stock is currently convertible, at the option of
the
holder, into 1,000 shares of Common Stock based on a conversion price equal
to
$0.55 per share of Common Stock (the “Series A Conversion Price”). The Series A
Conversion Price is subject to adjustment for stock dividends, stock splits
and
other similar recapitalization events.
In
addition, each share of Series A Preferred Stock shall automatically be
converted into shares of Common Stock, based on the then-effective Series A
Conversion Price, (A) if the closing price of the Common Stock as reported
on
the Nasdaq Capital Stock Market (or on such other public securities trading
market, such as the OTC Bulletin Board, as then constitutes the primary trading
market for the Common Stock) is equal to two times or greater than the Series
A
Conversion Price then in effect (the “Series A Automatic Conversion Price”), for
a period of twenty (20) consecutive business days, or (B) at any time upon
the
affirmative election of the holders of at least sixty-six and two-thirds percent
(66 2/3%) of the outstanding shares of the Series A Preferred Stock, or (C)
upon
the earliest to occur of (x) the closing of a firmly underwritten public
offering pursuant to an effective registration statement under the Securities
Act covering the offer and sale of Common Stock for the account of the Company
in which (i) the per share price is at least two times the Series A Automatic
Conversion Price and (ii) the cash proceeds to the Company (before underwriting
discounts, commissions and fees) are at least ten million dollars ($10,000,000),
or (y) the closing of an Acquisition or an Asset Transfer (as these terms are
defined in the Certificate) that results in the holders of the Series A
Preferred Stock receiving cash consideration per share not less than the Series
A Automatic Conversion Price.
The
foregoing summary of the terms of the Certificate is subject to, and qualified
in its entirety, by the Certificate of Designation of Series A Convertible
Preferred Stock, which is attached to this Current Report on Form 8-K as Exhibit
3.1 and is incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
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Description
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3.1
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Certificate
of Designation of Series A Convertible Preferred Stock
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10.1
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Fourteenth
Amendment to Loan and Security Agreement by and among SMF Energy
Corporation, successor-by-merger to Streicher Mobile Fueling, Inc.,
SMF
Services, Inc., H & W Petroleum Company, Inc. and Wachovia Bank,
National Association, successor-by-merger to Congress Financial
Corporation (Florida), dated March 6, 2008.
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10.2
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Form
of Exchange Agreement
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10.3
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Form
of Securities Purchase Agreement
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99.1
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Press
Release of SMF Energy Corporation, dated March 6,
2008.
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SIGNATURE
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.
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Date:
March 6, 2008
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SMF
ENERGY CORPORATION
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By:
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/s/
Richard E. Gathright |
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Richard
E. Gathright, Chief Executive
Officer
and President
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EXHIBIT
INDEX
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EXHIBIT
NO.
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DESCRIPTION
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3.1
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Certificate
of Designation of Series A Convertible Preferred Stock
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10.1
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Fourteenth
Amendment to Loan and Security Agreement by and among SMF Energy
Corporation, successor-by-merger to Streicher Mobile Fueling, Inc.,
SMF
Services, Inc., H & W Petroleum Company, Inc. and Wachovia Bank,
National Association, successor-by-merger to Congress Financial
Corporation (Florida), dated March 6, 2008.
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10.2
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Form
of Exchange Agreement
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10.3
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Form
of Securities Purchase Agreement
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99.1
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Press
Release of SMF Energy Corporation, dated March 6,
2008.
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