Attached files
| file | filename |
|---|---|
| EX-4.4 - NACEL ENERGY CORP | v182268_ex4-4.htm |
| EX-4.2 - NACEL ENERGY CORP | v182268_ex4-2.htm |
| EX-4.1 - NACEL ENERGY CORP | v182268_ex4-1.htm |
| EX-4.3 - NACEL ENERGY CORP | v182268_ex4-3.htm |
| EX-10.3 - NACEL ENERGY CORP | v182268_ex10-3.htm |
| EX-10.2 - NACEL ENERGY CORP | v182268_ex10-2.htm |
| EX-10.1 - NACEL ENERGY CORP | v182268_ex10-1.htm |
| EX-10.4 - NACEL ENERGY CORP | v182268_ex10-4.htm |
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): April 22, 2010
Commission
File Number: 0-53150
NACEL
ENERGY CORPORATION
(Exact
name of registrant as specified in its charter)
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Wyoming
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20-4315791
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|
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
Number)
|
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9375
E Shea Blvd., Suite 100
Phoenix,
Arizona
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85260
|
|
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(Address
of principal executive offices)
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(Zip
Code)
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(602) 235-0355
(Registrant
telephone including area code)
Check the
appropriate item below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written communications pursuant to Rule
425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ 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 April
23, 2010, NACEL Energy Corporation (the “Company” or “NACEL”) entered into a
definitive Exchange Agreement (the “Exchange Agreement”) which effectively
amended and modified the terms of a Senior Secured Convertible Note (the “Note”)
and Warrants (the “Warrants”) held by a single institutional investor. The Note
and Warrants were originally acquired by the investor pursuant to a Securities
Purchase Agreement entered into on November 23, 2009, which was disclosed by the
Company in a Form 8-K filed with the SEC on November 25, 2009. Under the terms
of the Exchange Agreement, the Note was exchanged for a new Senior Secured
Convertible Note (the “New Note”) and the Warrants were exchanged for new
Warrants (the “New Warrants”) containing various changes and modifications in
their respective terms and provisions as summarized below. The Company benefits
from the Exchange Agreement since it is now able to pay monthly installment
amounts due under the New Note through issuance of shares of its common stock,
as opposed to being obligated to pay monthly installment amounts in cash if the
market price of its common stock was less than the $0.75 stock price
floor.
The
principal amount of the New Note is $935,000 consisting of the original
principal amount of $900,000 plus an additional $35,000 in costs and expenses
(including attorney’s fees) for which the Company was obligated to reimburse the
investor arising from Company obligations under the original transaction
documents and the negotiation and preparation of the Exchange Agreement and the
Exchange Documents (as defined in the Exchange Agreement). The New Note does not
accrue any interest unless an event of default occurs, in which case the
interest rate shall be 18% per annum. The New Note is convertible by the holder
at any time after closing into shares of NACEL’s common stock at a new
conversion price of $0.30, being reduced from the initial conversion price of
$0.90. The New Note amortizes in seven equal monthly installment amounts of
$133,571.42 commencing on the 21st trading
day following the earlier of (a) the date the Form S-1 Registration Statement,
as filed by the Company on December 31, 2009, is declared effective by the SEC,
and (b) May 24, 2010, and ends on the maturity date, which is the six month
anniversary of the first installment date. NACEL may pay each monthly
installment amount due on the New Note, at its option, in cash or, subject to
the satisfaction of customary equity conditions, in shares of NACEL’s common
stock. If NACEL elects to make payment in shares of its common stock,
the number of shares issued by NACEL will be determined by dividing the
installment amount being converted by the lower of (a) the conversion price then
in effect or (b) 90% of the arithmetic average of the volume weighted average
prices of NACEL’s common stock on each of the 20 consecutive trading days prior
to the applicable installment date. The New Note eliminates the prior $0.75
floor price for the Company being able to make payment in shares of its common
stock. If the $0.75 floor price had not been eliminated, the Company would not
have been able to make installment payments in cash due to its limited cash
resources and limited ability to raise additional funds.
The
Company’s obligations under the New Note and the other Exchange Documents
continue to be secured by a first priority, perfected security interest in all
of the Company’s assets. Additionally, each of the Company’s
subsidiaries continues to guarantee the obligations of NACEL under the New Note
and the other Transaction Documents, and each such guarantee continues to be
secured by a first priority, perfected security interest in all of the assets of
each such subsidiary
In the
exchange transaction, NACEL issued new Series A Warrants to the investor, which
are exercisable for a period of 5 years for up to 3,750,000 shares of NACEL’s
common stock, with a modified exercise price of $0.30, reduced from the initial
exercise price of $0.90.
NACEL
also issued new Series B Warrants that entitles the investor to purchase up
to 3,000,000 shares of common stock (for an aggregate exercise price
of $900,000) until the 1 year anniversary of the effective date of the
registration statement filed by NACEL. NACEL can require the investor
to purchase all of the shares under the new Series B Warrant upon satisfaction
of certain customary conditions. Upon exercise of the new Series B Warrants, the
investor will be entitled to exercise the same proportion of the new Series C
Warrants issued to the investor. The new Series C Warrants are
exercisable for a period of 5 years for up to 3,750,000 shares of NACEL’s common
stock. The modified exercise price of both the Series B Warrant and the Series C
Warrant is $0.30, reduced from the initial exercise price of
$0.90. The conversion price of the New Note, the exercise price of
each of the New Warrants and the number of warrant shares are all subject to
adjustment (including full-ratchet) upon occurrence of certain
events.
Except as
noted above, all of the other terms and provisions of the New Note and the New
Warrants remain the same as set forth in the Note and the Warrants. In addition,
there were no changes or modifications made to any of the provisions of the
Registration Rights Agreement.
The Note
and the Warrants were exchanged for the New Note and New Warrants in reliance
upon an exemption from registration under Section 3(a)(9) of the Securities Act
of 1933, as amended.
The description of, among other
things, the terms of the Exchange Agreement, the New Note and the New Warrants
does not purport to be complete and is qualified in its entirety by reference to
each of the subject transaction documents which are filed as Exhibits to this
report and are incorporated herein by reference.
Item
1.02 - Termination of a Material Definitive
Agreement.
On April
23, 2010, Nacel Energy Corporation (“Nacel Energy” or the “Company”) entered
into a Termination and Settlement Agreement with Renergix Wind LLC (“Renergix”),
whereby that certain Joint Development Agreement (“JDA”) with an effective date
of January 1, 2009 was terminated effective as of April 1, 2010. Under the terms
of the JDA, Renergix provided various services related to, among other things,
the project development and management of the Company’s wind power facility
development projects and opportunities and, in exchange for such services,
received monthly fee compensation, milestone compensation and success fees,
subject to terms of the JDA. For further information concerning the terms and
provisions of the JDA between the Company and Renergix, see the Annual Report on
Form 10-K for the fiscal year ended March 31, 2009, as filed with the Commission
on June 28, 2009.
Under the
terms of the Termination and Settlement Agreement, the accrued and deferred
compensation amounts due to Renergix totaling $90,047.25 for the period from
October 1, 2009 through March 31, 2010 will be paid through the issuance by the
Company of 300,158 shares of the Company’s common stock based on a value of
$0.30 per share. In addition, a $10,500 compensation amount due to Renergix for
the month of March, 2010 shall be paid in cash when the Company receives the
first refunds as requested from Xcel Energy and Southwestern Public Service
Company, a subsidiary of Xcel Energy. In connection with the termination, mutual
releases were provided by the Company and Renergix whereby each party released
the other party from any and all claims, actions, causes of action and all
liability which either party now has or ever had against the other party arising
out of, or related to, all services provided or performed under the terms of, of
other obligations arising from the terms of, the JDA, except that the release
shall not apply to any rights, claims, benefits, obligations or limitations
granted or afforded the parties under the terms of the Termination and
Settlement Agreement.
With the
termination being not “for cause” under the terms of the original JDA, Renergix
remains entitled to receive milestone compensation and success fees arising from
the further development, construction and commissioning (operations) of the
Company’s existing wind energy projects through the period ending December 31,
2013, being the end of the five year term of the original JDA.
Item
2.03 – Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The
disclosure provided in Item 1.01 of this report is hereby incorporated by
reference into this Item 2.03.
Item
3.02 – Unregistered Sales of Equity Securities.
The
disclosure provided in Item 1.01 of this report is hereby incorporated by
reference into this Item 3.02.
Item
5.02 - Departure of Certain Officers; Appointment of Certain
Officers; Compensatory Arrangement of Certain Officers.
Effective
as of April 22, 2010, Nacel Energy Corporation (“Nacel Energy” or the “Company”)
entered into separate Termination Agreements with Paul Turner, President, and
Andre Schwegler, Chief Financial Officer, whereby each person’s employment as an
officer of the Company was terminated, with such termination being without cause
under terms of their respective Employment Agreement.
On April
23, 2010, the Board of Directors appointed Mark Schaftlein, being a member of the
Board of Directors, as the President and Chief Financial Officer of the Company
thereby filling the officer vacancies arising from the terminated employment of
Messrs. Turner and Schwegler as officers of the Company.
Biographical
information for Mark Schaftlein is contained in the Company’s Form 8-K, as filed
with the Commission on July 20, 2009. Information for compensatory arrangements
for Mark Schaftlein is contained in the Company’s Form 8-K, as filed with the
Commission on January 11, 2010.
Under the
terms of his Termination Agreement, the accrued and deferred compensation
amounts due to Mr. Turner totaling $75,000 for the period from October 1, 2009
through March 31, 2010 will be paid to him through the issuance by the Company
of 250,000 shares of the Company’s common stock based on a value of $0.30 per
share. In addition, a $5,500 compensation amount due to Mr. Turner
for the month of March, 2010 shall be paid to him in cash when the Company
receives the first refunds as requested from Xcel Energy and Southwestern Public
Service Company, a subsidiary of Xcel Energy. In connection with the
termination, Mr. Turner released and relinquished any right or claim to receive
both (a) a pro-rata share of his base salary during the month of April, 2010 and
(b) any severance compensation provided for under the terms of the Employment
Agreement. With the termination being “without cause” under the terms of the
original Employment Agreement, Mr. Turner remains eligible for health and other
benefits, but only to the extent provided by the Company prior to termination
and, is not subject to any non-competition provision contained in the Employment
Agreement.
Under the
terms of his Termination Agreement, the accrued and deferred compensation
amounts due to Mr. Schwegler totaling $13,500 for the period from October 1,
2009 through March 31, 2010 will be paid to him through the issuance by the
Company of 75,000 shares of the Company’s common stock based on a value of $0.30
per share. In addition, a $5,500 compensation amount due to Mr.
Schwegler for the month of March, 2010 shall be paid to him in cash when the
Company receives the first refunds as requested from Xcel Energy and
Southwestern Public Service Company, a subsidiary of Xcel Energy. In connection
with the termination, Mr. Schwegler released and relinquished any right or claim
to receive from the Company both (a) the pro-rata share of his base salary for
the month of April, 2010 and (b) any severance compensation provided for under
the terms of the Employment Agreement. With the termination being “without
cause” under the terms of the original Employment Agreement, Mr. Schwegler
remains eligible for health and other benefits, but only to the extent provided
by the Company prior to termination and, is not subject to any non-competition
provision contained in the Employment Agreement.
Item 9.01
– Exhibits
(d) Exhibits.
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Exhibit No.
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Description
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4.1
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Senior
Secured Convertible Note dated April 23, 2010
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4.2
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Series
A Warrant
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4.3
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Series
B Warrant
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4.4
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Series
C Warrant
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10.1
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Exchange
Agreement
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10.2
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Termination
Agreement (Paul Turner)
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10.3
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Termination
Agreement (Andre Schwegler)
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10.4
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Termination
and Settlement Agreement (Renergix Wind
LLC)
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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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NACEL
ENERGY CORPORATION
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Date:
April 26, 2010
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By: /s/ Mark Schaftlein
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Mark
Schaftlein, Chief Executive
Officer
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