8-K

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):

June 28, 2006

NaturalNano, Inc.

(Exact name of registrant as specified in its charter)

Nevada	000-49901	87-0646435
(State or other jurisdiction	(Commission File No.)	(I.R.S. Employer
of incorporation)		Identification No.)

150 Lucius Gordon Drive, Suite 115

West Henrietta, New York 14586

(Address of principal executive offices)

(585) 214-8005

(Registrant’s telephone number, including area code)

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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On June 28, 2006, we entered into a Line of Credit Agreement (the “Line of Credit Agreement”) with Technology Innovations, LLC, a New York limited liability company (“TI”), pursuant to which TI has committed to make advances to us, in an aggregate amount of up to $1,000,000. In our Quarterly Report on Form 10-QSB for the period ended March 31, 2006, we disclosed that TI had made a commitment to provide this credit facility. TI is the beneficial owner of approximately 53.7% of our issued and outstanding common stock. Michael L. Weiner, the Chairman of our Board of Directors, is the Manager and a 42.74% beneficial owner of TI. Mr. Weiner and Ross Kenzie, also a member of our Board of Directors, make up the TI Board of Members.

We intend to use any amounts borrowed under the credit facility as general working capital. The line of credit has been established as an interim financing source until we are able to draw down the $15,500,000 that has been committed to us by SBI Brightline XIII, LLC (“SBI”) under the Stock Purchase Agreement we signed with SBI on March 30, 2006. SBI’s obligation to purchase shares under the Stock Purchase Agreement is contingent upon a registration statement covering SBI’s resale of such shares being declared effective by the Securities and Exchange Commission.

Under the Line of Credit Agreement, advances may be drawn down in such amounts and at such times as we determine upon 15 days’ prior notice to TI, except that we may not draw down more than $300,000 in any 30-day period. Amounts borrowed will bear interest at the rate of 8% per annum. Any amounts drawn down and repaid may be reborrowed at any time (subject to the requirement of 15 days’ notice and the limitation that not more than $300,000 may be drawn down during any 30-day period). On June 29, 2006, we borrowed $300,000 under this credit facility. TI’s obligation to lend to us under the Line of Credit Agreement expires on March 31, 2007, after which date TI may demand repayment of the entire amount borrowed by us (together with accrued and unpaid interest) upon 15 days’ notice. Our obligations with respect to borrowings under the credit facility are governed by a Promissory Note issued by us to TI on June 28, 2006 (the “Note”).

The Line of Credit Agreement and the Note contain other conventional terms, including provisions relating to events of default. The Line of Credit Agreement and the Note are filed as Exhibits to this Current Report on Form 8-K and the foregoing descriptions of such agreements are qualified in their entirety by reference to such Exhibits.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

Exhibit Number	Description of Exhibit
10.1	Line of Credit Agreement dated as of June 28, 2006 between NaturalNano, Inc. and Technology Innovations, LLC
10.2	Promissory Note dated June 28, 2006 to the order of Technology Innovations, LLC

Signatures

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.

	NATURALNANO, INC.
Date: July 3, 2006		/s/ Kathleen A. Browne
		Kathleen A. Browne
		Chief Financial Officer

EX-10.1

Exhibit 10.1

LINE OF CREDIT AGREEMENT

Date: June 28, 2006

THIS AGREEMENT is entered into between NATURALNANO, INC., a Nevada corporation having an office address at 150 Lucius Gordon Drive, Suite 115, West Henrietta, New York 14586 (the “Borrower”) and TECHNOLOGY INNOVATIONS, LLC, a New York limited liability company having an office address at 150 Lucius Gordon Drive, Suite 117, West Henrietta, New York 14586 (the “Lender”).

The Lender has agreed to lend Borrower an amount up to one million dollars ($1,000,000.00) in accordance with the terms of this Agreement.

1. COMMITMENT.The Lender agrees to make advances to the Borrower at any time during this Agreement and prior to the Termination Date, in an aggregate principal amount up to but not exceeding the sum of $1,000,000 at any one time outstanding (the “Commitment”). Advances (the “Advances”) shall be requested and made in accordance with the terms of Section 7(a) hereof. During this period, the Borrower may use the Commitment by borrowing, paying, renewing or prepaying the outstanding balance as reflected by this Agreement, in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. Notwithstanding any provision herein to the contrary, the Borrower may not request aggregate advances of greater than $300,000 in any thirty (30) day period. The Commitment shall extend through March 31, 2007, which date shall be the Termination Date. During the term of the Commitment, Borrower’s obligations shall be represented by a Promissory Note in the form attached hereto as Exhibit A (the “Note”).

2. NOTICE OF BORROWING. The Borrower shall give the Lender written notice of the date and the amount of each proposed borrowing pursuant to the Commitment, which notice shall comply with the requirements of Section 7(a) hereof. Notwithstanding any provision herein to the contrary, the Borrower must provide the Lender at least fifteen (15) days’ prior written notice before each Advance. On or before the date specified in such notice, the Lender will make the amount then to be loaned by it available to the Borrower.

3. INTEREST. The Borrower shall pay interest upon the amount at any time outstanding upon the Note, at the rate of eight percent (8%) per annum. Interest on the outstanding balance of principal advanced shall accrue and be payable upon payment or prepayment in full of the unpaid principal balance.

4. PAYMENT. Payment shall be made within fifteen (15) business days after demand therefor, which demand may be made at any time after the Termination Date in accordance with the terms of the Note. All payments (including prepayments) by the Borrower on account of principal and interest on the Note shall be made to the Lender by corporate check at the address specified in the Note or by wire transfer.

5. USE OF PROCEEDS. The proceeds of the loans made hereunder shall be used for the corporate working capital purposes of the Borrower.

6. EVENTS OF DEFAULT. Upon the occurrence and continuance of any Event of Default as defined in the Note, the Lender may, by notice to the Borrower, declare the Commitment immediately terminated and, upon thirty (30) days’ prior written notice, declare any amounts outstanding hereunder to be due and payable, whereupon the outstanding principal amount of the Note, together with accrued interest thereon, shall become immediately due and payable without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived, notwithstanding anything contained herein to the contrary.

7. MISCELLANEOUS.

a. Notices. Any and all notices to be delivered in connection herewith shall be in writing and shall be deemed given when delivered if delivered personally, ten days after being sent if properly sent by airmail, or three days after being sent if properly sent by recognized express courier service guaranteeing delivery during such period, in each case addressed to the other party at the address set forth above or such other address as any party may furnish by notice to the other as herein provided.

b. No Waiver, Cumulative Remedies, Amendment. No failure to exercise and no delay in exercising on the part of the Lender, any right, power, or privilege hereunder or under the Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. No modification or waiver of any provision of this Agreement nor consent to any departure by the Borrower from the provisions hereof shall be effective unless the same shall be in writing from the Lender, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which it is given. No notice to the Borrower shall entitle the Borrower to any other or further notice in other similar circumstances unless expressly provided for herein. No course of dealing between the Borrower and the Lender shall operate as a waiver of any of the rights of the Lender under this Agreement.

c. Payment of Fees. The Borrower agrees to pay all reasonable costs and expenses of the Lender in connection with the enforcement of, or the preservation of rights arising under, the Note, including reasonable legal fees and disbursements arising in connection therewith.

d. Entire Agreement. This Agreement and the Note constitute the entire agreement between Borrower and Lender with respect to the subject matter hereof and supersede all prior understandings and agreements, written or oral, regarding the subject matter. Unless otherwise provided herein, this Agreement may be modified or amended only by a written consent executed by both parties.

e. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns, except that the Borrower may not transfer or assign any of its rights or interests hereunder without the prior written consent of the Lender.

f. Construction. This Agreement and the rights and obligations of the parties hereunder and thereunder shall be governed by, and construed in accordance with, the laws of the State of New York. Both parties consent to the jurisdiction of the state and federal courts located in Rochester, New York with respect to any disputes arising between the parties.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date set forth above.

BORROWER:

NATURALNANO, INC.

By: /s/ Kathleen A. Browne              

Name: Kathleen A. Browne

Title: Chief Financial Officer

LENDER:

TECHNOLOGY INNOVATIONS, LLC

By: /s/ Michael L. Weiner                  

Name: Michael L. Weiner

Title: Manager

EX-10.2

Exhibit 10.2

PROMISSORY NOTE

$1,000,000 June 28, 2006

FOR VALUE RECEIVED, the undersigned, NaturalNano, Inc., a corporation organized under the laws of the State of Nevada, with its principal offices at 150 Lucius Gordon Drive, Suite 115, West Henrietta, New York 14586 (“Debtor”), hereby promises to pay to Technology Innovations, LLC, a limited liability company organized under the laws of the State of New York, with its principal offices 150 Lucius Gordon Drive, Suite 117, West Henrietta, New York 14586 (“Creditor”), the principal sum of one million dollars ($1,000,000.00) or such lesser amount as shall have been advanced pursuant to the Line of Credit Agreement of even date herewith between Creditor and Debtor, together with interest thereon at the rate of eight percent (8%) per annum, in lawful money of the United States of America.

1.Repayment. The entire amount of principal and interest due under this Note shall be payable within fifteen (15) business days after demand therefor, which demand may be made at any time after March 31, 2007 (the “Maturity Date”). Debtor may prepay all or any part of this Note at any time without premium or penalty. Partial payments shall be applied first to accrued and unpaid interest and then to principal.

2.Interest Calculations. Interest under this Note shall be compounded monthly on the basis of actual days elapsed.

3.Events of Default. Upon the occurrence, whether before or after the Maturity Date, and during the continuance of any of the following events (each of which shall be an “Event of Default”), Creditor may declare the principal of and interest on this Note to be due and payable upon thirty (30) days’ prior written notice, and the principal of and interest on this Note shall, upon such declaration, become due and payable, anything in this Note to the contrary notwithstanding:

(a) Debtor fails to pay any principal of or interest on this Note when due; or

(b) Debtor is dissolved or liquidated; or

(c) Debtor makes an assignment for the benefit of creditors, commences (as the debtor) a case in bankruptcy, or commences (as the debtor) any proceeding under any other insolvency law; or

(d) A case in bankruptcy or any proceeding under any other insolvency law is commenced against Debtor (as the debtor) and a court having jurisdiction in the premises enters a decree or order for relief against Debtor as the debtor in such case or proceeding, and such case or proceeding is continued for sixty (60) days, or Debtor consents to or admits the material allegations against it in any such case or proceeding; or

(e) A trustee, receiver or agent (however named) is appointed or authorized to take charge of substantially all of the property of Debtor for the purpose of enforcing a lien against such property or for the purpose of general administration of such property for the benefit of creditors.

4.Severability. The invalidity, illegality or unenforceability of any provision of this Note shall not render invalid, illegal or unenforceable any other provision hereof.

5.No Waiver of Remedies. No failure or delay on the part of Creditor in the exercise of any power or right in this Note shall operate as a waiver thereof, and no exercise or waiver of any single power or right, or the partial exercise thereof, shall affect Creditor’s rights with respect to any and all other rights and powers.

6.Maximum Interest. This Note is subject to the express condition that at no time shall Debtor be obligated or required to pay interest on the unpaid principal balance due hereunder at a rate which is in excess of the maximum interest rate permitted under applicable law. If by the terms of this Note, Debtor is at any time required or obligated to pay interest on the unpaid principal balance due hereunder at a rate in excess of such maximum rate, then for such time as the rate of interest under this Note would be deemed excessive, its application shall be suspended and there shall be charged instead interest at such maximum rate.

7.Notices. Any and all notices to be delivered in connection herewith shall be in writing and shall be deemed given when delivered if delivered personally, ten days after being sent if properly sent by airmail, or three days after being sent if properly sent by recognized express courier service guaranteeing delivery during such period, in each case addressed to the other party at the address set forth above or such other address as any party may furnish by notice to the other as herein provided.

8.Successors and Assigns. This Note shall inure to the benefit of Creditor, any holder of this Note and their respective successors and permitted assigns. Whenever Debtor or Creditor is referred to in this Note, such references shall be deemed references to its successors and permitted assigns and, in the case of Creditor, any other holder of this Note. Neither party may assign its rights or obligations under this Note without the prior written consent of the other party.

9.Headings and Captions. Any headings or captions preceding the text of the separate sections hereof are intended solely for convenience of reference and shall not constitute a part of this Note, nor shall they affect its meaning, construction or effect.

10.Governing Law; Jurisdiction. This Note shall be construed and interpreted in accordance with the laws of New York without reference to New York’s choice of law rules. Debtor and Creditor agree that any litigation in connection with this Note shall be commenced and conducted by any of them only in New York in the County of Monroe, or in the U.S. District Court whose jurisdiction includes such county, which courts shall have exclusive jurisdiction thereof. Debtor and Creditor submit to the venue of such courts and agree that service of process upon them shall be valid if delivered to the applicable address specified herein.

NATURALNANO, INC.
By:	/s/ Kathleen A. Browne
	Name: Kathleen A. Browne
	Title: Chief Financial Officer