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BODISEN BIOTECH, INC Files SEC form 8-K, Entry Material Agreement, Financial Obligation Matter, Sale of Equity, Finan



Entry Material Agreement, Financial Obligation Matter, Sale of Equity, Finan

Item 1.01 Entry into a Material Definitive Agreement

Effective March 16, 2005, the Company completed a private placement offering. Pursuant to a securities purchase agreement with an accredited investor, the Company received the sum of $3 million and issued a one year 9% debenture convertible into shares of common stock by dividing the aggregate principal and accrued interest by a conversion price of $4.80; and three year warrants to purchase 187,500 shares of common stock at $4.80 per share, pursuant to Regulation D of the Securities Act of 1933, as amended. In connection with the offering, the Company entered into a registration rights agreement with the investor and agreed to file a registration statement with the Securities and Exchange Commission ("Commission") for the resale of the common stock issuable upon conversion of the debenture and the exercise of the warrant within forty five (45) days of the closing date. Pursuant to the terms of the registration rights agreement, the Company is required to have the registration statement declared effective by the Commission within ninety (90) days after the closing, or in the event of a review of the registration statement by the Commission, within one hundred and fifty (150) days from the date of the closing. In the event that the Company fails to timely file or obtain an effective registration statement within the respective 45, 90 or 150 day times periods, it will be assessed a penalty at a rate per week equal to twenty-five basis points of the total purchase price of the convertible debenture and warrant payable monthly in cash.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

See Item 1.01 above.

Item 3.02 Unregistered Sales of Equity Securities

See Item 1.01 above.

The parties intended the above private placement to be exempt from registration and prospectus delivery requirements under the Securities Act of 1933, as amended (the "Act"), pursuant to Section 4(2) of the Act and Regulation D promulgated thereunder. The investor has represented that it is an accredited investor and that the investor's intention was to acquire the securities for investment only and not with a view to distribution thereof. An appropriate legend was affixed to the warrant and convertible debenture issued in the above private placement and will be placed on any common stock certificates issued upon conversion of the above debenture or exercise of the warrant. The investor represented that it was knowledgeable, sophisticated and experienced in making investment decisions of this kind and received adequate information about the Company or had adequate access, through the investor's business relationship with the Company to information about the Company.


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