Attached files
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| EX-10.3 - EX-10.3 - Specialized Services, Inc. | v206716_ex10-3.htm |
| EX-10.4 - EX-10.4 - Specialized Services, Inc. | v206716_ex10-4.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 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 reported): December 27, 2010
EXERGETIC ENERGY,
INC.
(Exact
name of small business issuer as specified in its charter)
SPECIALIZED
SERVICES, INC.
(Former
Name of Registrant)
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Michigan
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0-32267
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27-2950066
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(State or other jurisdiction of
Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification Number)
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(Address
of principal executive offices)
(313)
405-7547
(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.)
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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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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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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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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CF$
240.13e-4(c))
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Item
1.01 Entry Into
a Material Definitive Agreement
The
Company (“SSI”) entered into a Final Definitive Agreement (the “Agreement”)
dated December 3rd, 2010 with Exergetic Energy, Inc., a Michigan
corporation (“Exergetic ”) and certain SSI shareholders, wherein
Exergetic agreed to purchase (a) 76% of the outstanding shares of
SSI; and (b) 1,750,000 shares of common stock. The Purchase Price is
$185,250, which is being paid in accordance with the terms of a Promissory Note
executed and finalized on December 10, 2010. The Agreement and Note
provide that the remaining balance shall be due and payable upon the
Company’s becoming an OTCBB trading company, provided however, in the event that
does not occur on or before March 31, 2011, Exergetic shall return
all shares received to date and the transaction and all related documents will
be terminated and rescinded. In addition, a $21,000 prepayment is due and
payable on or before January 31, 2011, the failure of which shall also result in
a rescission of the transaction
The
Closing shall occur upon execution of the underlying documents and the Agreement
does not provide a Closing date.
Description
of Business of Acquired Asset
Some of
the statements contained in this current report of Exergetic Energy Inc.
(hereinafter the "Company", "We" or the "Registrant" discuss future
expectations, contain projections of our operations or financial condition or
state other forward-looking information. On December 3, 2010, the Registrant
entered into Final Definitive Agreement (the "Agreement") to merge into
Exergetic Energy, Inc.., a privately-owned Michigan corporation.
Forward-Looking
Statements and Associated Risks
This
current report on Form 8-K and the documents incorporated herein by reference
contain forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations, estimates and
projections about Exergetic Energy, Inc.’s industry, management beliefs, and
assumptions made by management. Words such as “anticipates,” “expects,”
“intends,” “plans,” ”believes,” “seeks,” “estimates,” variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict; therefore, actual results and outcomes may differ materially from what
is expressed or forecasted in any such forward-looking statements.
PART
I
Corporate
Information
All of
our reports and filings with the SEC pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, are made available, free of charge,
through the SEC website located at http://www.sec.com, including annual reports
on Form 10-KSB, quarterly reports on Form 10-QSB, and current reports on Form
8-K, and any amendments to these reports. In addition, the public may read and
copy any materials we file with the SEC at the SEC's Public Reference Room at
450 Fifth Street, NW, Washington, D.C. 20549. The public may obtain information
on the operation of the Public Reference Room and the SEC's Internet website by
calling the SEC at 1-800-SEC-0330.
The
Business of Exergetic Energy
Exergetic
Energy, Inc., was founded on May 27th, 2010 as a Michigan corporation, and is a
business created to improve upon and expand the various energy options/resources
available for prospective customers. While specializing in both
renewable and efficient non-renewable sources, EXERGETIC believes itself to be
perfectly positioned to capitalize upon the opportunities that are taking place
as the world moves to a more enlightened stance on energy
consumption.
2
The
Company's Business Strategy
As a full
service energy company Exergetic Energy, Inc (“EXERGETIC”) has with its’
tripartite organizational structure the means to address a myriad of different
energy challenges facing our customers. Represented by three distinct
divisions: Non-Renewables, Renewables & Energy Optimization, EXERGETIC is a
solutions provider for a myriad of different energy solutions. The three main
divisions that exist within EXERGETIC possess the following strategic
objectives:
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Provide
innovative technology driven solutions that meet our client’s needs and
align with the larger US Energy Plan as defined by the Obama
Administration.
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Leverage
our expertise in government contract work via Small Business
Administrations’ 8A program in order to provide efficient, clean energy
solutions to the Departments of Defense and Energy,
respectively.
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Expand
the use of renewable energy sources into mainstream customer applications
per the use of smart device
technology
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Continue
to develop/market/manufacture leading edge technology for the vast array
of energy needs that occur within the residential and commercial arenas at
optimum price points
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Competition
EXERGETIC
is an amalgam of three distinct energy related business units. As
such, each division has its own set of unique opportunities and challenges
thereof. The Renewable Energy division is focused on the design
& installation of solar panel systems per the use of photovoltaic (PV) AC/DC
inverters. EXERGETIC has its’ own proprietary inverter technology for
this industry. And while the majority of global solar panel demand is
supplied by the China, the company feels that a niche exist especially in the US
market for the manufacture and production of solar power
inverters. Furthermore, the lack of an international standard creates
regional markets for inverters. In the U.S., regulations are
particularly burdensome for manufacturers. Regulations differ across
PV markets. Regulations for grid-connected PV inverters vary across
countries. Requirements are most stringent in the United
States. International manufacturers who want to serve this market
need to design models specifically for the United States in order to meet
regulations. This lack of uniformity creates regional markets, making
it extremely difficult for manufacturers to create a global
product.
Nearly
75% of the entire US photovoltaic market is supplied by production from just
three manufacturers. The following three companies have US
subsidiaries, which are responsible for the production and supply of the
photovoltaic market in the US: (1) SMA Solar Technology AG (headquartered in
Germany), Xantrex Corporation out of Vancouver, CN and Osaka-Sharp from Japan
constitute the major suppliers in this industry. EXERGETIC
views this lack of indigenous manufacturing capabilities of US based companies
to be a major opportunity for us to capitalize upon while striving to become the
largest US manufacture and supply of power inverters to the global
marketplace.
The next
division, Energy Optimization, which operates under the EXERGETIC name, has an
orientation within the energy management and efficiency arena. The
energy optimization industry functions as the backbone of the entire energy
economy. Whether customers desire solar or fossil power energy
sources; the government now mandates that all energy delivery systems are
efficient and optimized. In assessing the energy optimization
marketplace that exists both locally in Michigan and on the national level, it
quickly becomes evident that this is an upcoming area of
focus. However, most companies that offer energy auditing services do
so as an extension of their building & construction firm, such is the case
for local competitors, Bestech Energy Systems in Oakland County and Michigan
Energy Audits LLC of Clarkston, MI. Nationally, the same observation
can be made of such players like The Hines Group, a global real estate
development and property management firm and BEI & Associates, a large
architectural & design engineering firm, that was hired to perform energy
assessments at the Coleman A. Young Municipal Center in Detroit,
MI.
3
We
believe that EXERGETIC has a competitive advantage arising from our core
technical training—since the company was founded by Mechanical Engineers, we
understand the true technological principles that undergird this “new” field of
interest. However, energy optimization isn’t really new at all, it is
governed by the fundamental laws of thermodynamics and the adherence to these
laws defines the laws of physics! Our team has over 35 years of
experience developing thermodynamic systems for a myriad of
applications and have been performing the task of “energy optimization” before
the name became popular and the diagnostic tools became user
friendly. The concept of energy optimization has strayed so far from
its engineering roots that in less than a week, an individual can become
certified as an Energy Auditor by taking a course and learning how to operate a
few diagnostic tools, without ever taking a single engineering course in
Thermodynamics or Heat Transfer. Our approach affords us the
opportunity to think “outside the box”; we do more than just merely provide
interpretations and insights from diagnostic tools—we build individual solutions
for individual clients based on principles of science.
In fact,
the concept of this primary service offering, the Energy Educator Program, was
borne out of a meeting that EXERGETIC held on July 29, 2010 with Mr. Gregory
McDuffie, Executive Director of the Detroit Wayne Joint Bldg. Authority
(DWJBA). The DWJBA received a 2008 ENERGY STAR Label on behalf of its
efforts to reduce energy consumption and implement smart business practices at
the Coleman A. Young Municipal Center and EXERGETIC conducted this meeting to
garner a first hand overview of the potential for energy optimization in the
Greater Detroit Metropolitan Area. As Executive Director of the
preeminent organization in Michigan and one of the best in the nation with
respect to implementing and realizing energy saving opportunities, Mr. McDuffie
stated that while they were definitely a significant number of companies engaged
in the business of energy auditing and optimization, there were currently no
suppliers of the energy optimization technology training which is required to
understand, operate, sustain and realize the energy savings opportunities
articulated in standard energy audit reports. The lack of knowledge
of how new energy efficient components operate makes this seem like “black box”
technology when it really is not. Our training program has been
developed to bridge this gap and take the mystery out of the
science. With this interactive, computer based training program,
EXERGETIC experts train users to effectively manage the technology to realize
the maximum cost-savings and reduction in energy
consumption. The Energy Educator Training Program is offered as
a stand-alone service or as a feature bundled in the
EXERGETIC Energy Audit Program. As a stand-alone
product, the training program is ideal for customers, who have already invested
capital into energy optimization but do not feel that they are garnering all of
the benefits originally purported.
The third
and final division of EXERGETIC is the non renewable business
unit. The business operations functions primarily as a commercial
fossil fuel supplier. This division incorporates the business
operations of Specialized Services, Inc. prior to the merger.
We have
established our Fuel Services program as a service capable of providing truck
fleets with cost savings based upon high volume nationally, together with the
means to track costs, savings and usage, through our third party billing card.
With high volume comes the opportunity to operate more efficiently by leveraging
costs. Our efficient and productive operations have enhanced our ability to
provide customers with competitive pricing of their fuel product needs which
advantage improves customer acquisition and retention.
Our
business competes in the area of fuel distribution principally on the basis of
the following factors: service quality, reputation, technical expertise and
reliable service. Competitive pressure and other factors could cause us
additional difficulties in acquiring market share or could result in decreases
in our margins, either of which could have a material adverse effect on our
financial position and results of operations.
We have
arrangements with fuel distributors at approximately 3,000 fuel stations under a
wide variety of formats across the United States. Further, we provide our Fuel
Services program to approximately 3 truck fleet customers.
We
negotiate with fuel providers, typically truck stocks, to keep fleet prices for
fuel products low by leveraging our existing distribution and wholesale
purchasing capabilities and maintaining a lower cost structure associated with
operating these distribution networks. We believe this strategy will become
increasingly profitable because we focus on high-turnover, employ flow-through
distribution methods that eliminate product storage operating costs and handling
expense.
4
Many of
our competitors have achieved significant national brand name recognition as
fuel distributors and have extensive promotional programs. Our Fuel Services
program uses equipment and technology that is widely available. Accordingly,
barriers to entry, apart from capital availability, are low in our business, and
the entrance of new competitors into the fuel distribution market may reduce our
ability to capture improving profit margins. However, we believe that our
comprehensive Fuel Services program, which includes pre-negotiated fuel
discounts from wholesalers/retailers based upon volume commitments and
pre-negotiated customer base with fleet truck operators nationally, provides
advantages to both the supplier and the customer at reasonable costs. The
Company's ability to compete successfully will depend on our success at
retaining current customers and penetrating new targeted markets. There can be
no assurance that the Company will be able to compete successfully, that its
services will continue to meet with customer approval, that competitors will not
develop and market their distribution services that are similar or superior to
our services or that the Company will be able to successfully enhance its
services.
Our
Facilities
Our
corporate headquarters and satellite offices are listed as follows:
Main
Office
440
Burroughs Street, Suite 386
Detroit,
MI 48202
Subsidiary
– SSI Affinity
23077
Greenfield Road
Suite
370
Southfield,
MI 48075
Dependence
on Major Customers
The
Company does not depend on any major customers.
Employees
As
of December 10th, 2010, the Company had 5 full time employees including its
executive officers. No employees are covered by a collective bargaining
agreement. The Company's management considers relations with its employees to be
satisfactory.
Risk
Factors
Investing
in our common stock will provide an investor with an equity ownership interest.
Shareholders will be subject to risks inherent in our business. The performance
of our shares will reflect the performance of our business relative to, among
other things, general economic and industry conditions, market conditions and
competition. The value of the investment may increase or decrease and could
result in a loss. An investor should carefully consider the following factors as
well as other information contained in this current report on Form
8-K.
This
current report on Form 8-K also contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in the forward-looking statements as a result of many factors,
including the risk factors described below and the other factors described
elsewhere in this Form 8-K.
5
RISK FACTORS RELATED TO OUR
BUSINESS
Increasing costs of oil
directly affects our costs and may negatively impact our margins.
Business in which we operate relies upon the ability to negotiate cost savings
from truck fuel distribution centers fulfill distribution requirements to our
retail customers, which include truck stops, gas stations and other gas
retailers. The recent steep increase in the cost of automotive/truck fuel
including gasoline and diesel fuel has increased our operating expenses and
reduced our profit margins. If the strategies we have developed in response to
these changing market conditions are not successful, it could harm our financial
condition and business prospects.
The fuel distribution
business is a low-margin business and is sensitive to economic
conditions. Substantially all of the revenues we derive are
from the distribution of fuel products that we buy from regional refiners and
larger third party distributors, which we sell to retailers of fuel products for
the automotive/truck industry. Our business is highly competitive and discounts
are required in order to secure and maintain customers for our fuel distribution
services. This industry is characterized by a high volume of sales with
relatively low profit margins. A significant portion of our sales are at prices
that are based on product cost plus a percentage markup. Consequently, our
results of operations may be negatively impacted when fuel prices fluctuate in
ways that we do not anticipate. The fuel distribution industry is also sensitive
to national and regional economic conditions and the demand for our fuel
products may be adversely affected from time to time by economic downturns.
Additionally, our distribution business is sensitive to increases in fuel and
other transportation-related costs.
Environmental concerns and
regulations may impact our business. Notwithstanding the fact
that we do not take possession of and do not deliver fuel, our services and
operations of our non-renewable fuel division may be subject to various laws,
regulations and judicial and administrative orders concerning protection of the
environment and human health, including provisions regarding the transportation,
storage, distribution, disposal or discharge of certain materials. Our renewable
energy divisions may also be impacted by environmental laws and regulations that
are to date unknown. We cannot assure you that environmental
regulations may not be adopted that impact our procedures or potentially
increase liability to limit environmental damages. If such regulations are
adopted, they would also apply to others in our industry, but we cannot
determine whether we will be readily able to comply with new but unanticipated
regulations of the U.S. Environmental Protection Agency and by similar state
agencies. In the event that claims are asserted against us for environmental
damages, whether or not we are found to be liable, we could be materially
adversely affected because of the costs associated with defending against any
environmental claims.
Renewable Energy division is
benefitting from, and counting on, the continued political favor and beneficial
policies existing in the United States at this time. Our
business plan for the Renewable Energy division relies heavily on the premise
that the Country’s commitment to renewable forms of energy will continue to
provide the Company with opportunities and favorable business tax treatment
similar to that provided under the American Recovery Act – PILOT program, which
provides generally for a 30% tax credit which the Company intends on
pursuing. A change in the direction of the Country could prove
disadvantageous to the Company’s Renewable energy division.
We may experience adverse
impacts on our results of operations as a result of adopting new accounting
standards or interpretations. Our
implementation of and compliance with changes in accounting rules, including new
accounting rules and interpretations, could adversely affect our operating
results or cause unanticipated fluctuations in our operating results in future
periods. For example, we will be required by the Sarbanes-Oxley Act of 2002 to
begin filing an annual report on the effectiveness of our internal controls.
Although we believe our internal controls are operating effectively, and we have
committed internal resources to ensure compliance, we cannot guarantee that we
will not have any material weaknesses as reported by our auditors and such
determination could materially adversely affect our business.
6
Competition While we
believe that we are competitive and have established presence in the markets in
which we operate our subsidiary and our training arm, our renewable energy
division is new and as such managing competition will be a focus of the
Company. We may face significant competition in our renewable
energy division’s primary competition is foreign, however, the Company believes
that the lack of many competitors in the United States, will allow the company
to capitalize on the current political climate of promoting American production
of alternative energy sources. We will compete against many companies in
fragmented, highly competitive markets and we have fewer resources than some of
those companies. Our business sectors compete principally on the basis of the
following factors: quality of service; establishing and maintaining
relationships with fuel providers for our customer; expertise, reputation and
efficiency. Competitive pressures, including those described above, and other
factors could cause us additional difficulties in acquiring market share or
could result in decreases in margins, which are already low, could have a
material adverse effect on our financial position and results of operations.
From time to time, the intensity of competition results in price discounting in
a particular industry or region. Such price discounting puts pressure on margins
and can negatively impact operating profit.
We rely heavily on fuel
commodities in our distribution business and price fluctuations can have a
material and adverse effect on the cost structure of our business. We are
exposed to fluctuations in market prices for various fuels. The rising price of
fuel can have an impact on our cost structure. At this time, we are unable to
predict the potential impact of future increases in fuel commodity costs on the
cost of our distribution business, or our ability, if any, to increase the
selling price of our services to cover such costs. We have not established
arrangements to hedge rising fuel commodity prices and, where possible, to limit
near-term exposure to fluctuations in fuel prices. As a result, the cost to
distributing fuel may rise at a time when we are unable to increase the selling
price of such products.
Actual results could differ
from the estimates and assumptions that we use to prepare our financial
statements
To
prepare financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions, as of the
date of the financial statements, which affect the reported values of assets,
liabilities, revenues and expenses and disclosures of contingent assets and
liabilities. Areas requiring significant estimates by our management include:
contract costs and profits and revenue recognition; increasing fuel costs
further narrowing our margins; continued acceptance of our Fuel Services program
and new initiatives.
Our dependence on one or a
few customers could adversely affect us. The Renewable energy
division’s initial project, the Solar array field in Arcadia, Florida’s (the
“Arcadia Project”) primary customer would be Florida Power and Light
(FPL). FPL will not commit to the purchase of power until such time
as the Company is producing the same, however, they do purchase power for the
grid and would be the Company’s preferred primary purchaser. Should
the company be unable to sell its power to FPL, it would be required to sell to
smaller, individual purchasers and communities, which would likely impact the
company’s financial condition.
The
Non-renewable energy subsidiary has been dependent upon its ability to market
its service to a limited number of major fleet truck customers. If any of these major
customers terminated its relationship with the Company, whether as the result of
advances by competitors, or otherwise, the business operations and financial
condition of the Company could be adversely effected.
Our failure to attract and
retain qualified personnel, including key officers, could have an adverse effect
on us. Our ability to attract and retain qualified personnel,
and other professional personnel in accordance with our needs is an important
factor in determining our future success. Our ability to be successful depends
in part on our ability to attract and retain skilled laborers in our businesses.
Demand for these workers can at times be high and the supply extremely limited.
Our success is also highly dependent upon the continued services of our key
officers, Mr. C. B. McCollum, our CEO and director, and Mr. Clarence
McCollum, our President and director. We have no "key" man insurance on the
lives of any executive officer.
We may need additional
capital to fund our operations and develop our Renewable energy
projects.
Our cash
reserves may not be adequate to cover our costs of operations and we will need
to raise significant capital to develop the Arcadia project. We expect to fund
our general operations and marketing activities for the next twelve months with
our current cash reserves and the funding provided or arranged for us by our
officers or affiliates. However, unexpected expenses or increases in costs may
arise. There is no assurance we can raise the additional capital if needed. If
additional funds are required we may be required to sell our securities or seek
debt financing, but there can be no assurance that such financing will be at
terms satisfactory to us.
7
RISK FACTORS RELATED TO
MARKET OF OUR COMMON STOCK
You cannot be sure that an
active trading market will develop or be sustained for our common
stock. Before the merger of Exergetic with and into SSI, there
was no established trading market for the shares of common stock of the
Registrant. We intend to make application to the OTC bulletin board to have our
shares become eligible for quotation and there can be no assurance that such
application will be successful, or the time that this process may require.
Further, in the event that we are successful in being listed on the OTC.BB,
there can be no assurance regarding the market price of our shares. In addition,
the liquidity of any trading market in the shares, and the market price quoted
for the shares, may be adversely affected by changes in the overall market for
securities generally and by changes in our financial performance or prospects
for companies in our industry generally. As a result, you cannot be sure that an
active trading market will develop or be sustained for our shares.
There is no Trading Market
for our Common Stock. Our common
stock is not subject to quotation on any trading market. There can be no
assurance that a trading market will commence in our securities as a result of
our becoming a reporting company. Further, in the event that an active trading
market commences, there can be no assurance as to the level of any market price
of our shares of common stock, whether any trading market will provide liquidity
to investors, or whether any trading market will be sustained.
State Blue Sky Registration;
Potential Limitations on Resale of our Securities. The class
of common stock registered under the Exchange Act has not been registered for
resale under the Act or the "blue sky" laws of any state. The holders of such
shares and persons, who desire to purchase them in any trading market that might
develop in the future, should be aware that there may be significant state
blue-sky law restrictions upon the ability of investors to resell our
securities. Accordingly, investors should consider the secondary market for the
Company's securities to be a limited one.
Dividends
Unlikely. We do not expect to pay dividends for the
foreseeable future. The payment of dividends, if any, will be contingent upon
our future revenues and earnings, capital requirements and general financial
condition. The payment of any dividends will be within the discretion of our
board of directors. It is our intention to retain all earnings for use in the
business operations and accordingly, we do not anticipate that the Company will
declare any dividends in the foreseeable future.
Possible Issuance of
Additional Securities. Our Articles
of Incorporation authorize the issuance of 25,000,000 shares of common stock,
par value $0.0001 and no shares of preferred stock, par value $0.0001. At the
date of filing this Form 8-K, we have 12,223,341 shares of common stock issued
and no preferred shares issued. We may issue additional shares of common stock
in connection with any future acquisitions of operating businesses or assets. To
the extent that additional shares of common stock are issued, our shareholders
would experience dilution of their respective ownership interests in the
Company. The issuance of additional shares of common stock may adversely affect
the market price of our common stock and could impair our ability to raise
capital through the sale of our equity securities.
Compliance with Penny Stock
Rules. Our
securities, if it becomes subject to quotation on any trading market, will
initially be considered a "penny stock" as defined in the Exchange Act and the
rules thereunder, since the price of our shares of common stock is likely to be
less than $5. Unless our common stock will otherwise be excluded from the
definition of "penny stock," the penny stock rules apply with respect to that
particular security. The penny stock rules require a broker-dealer prior to a
transaction in penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the SEC that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its sales person in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that the broker-dealer, not otherwise
exempt from such rules, must make a special written determination that the penny
stock is suitable for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure rules have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. So long as the common stock is subject to the
penny stock rules, it may become more difficult to sell such securities. Such
requirements, if applicable, could additionally limit the level of trading
activity for our common stock and could make it more difficult for investors to
sell our common stock.
8
Shares eligible for future
sale. .As of December 10th, 2010, the Company had 12,223,341
shares of common stock issued and outstanding. of such 112,741 shares are freely
tradable in the public market (except by affiliates of the Company) and
12,110,600 shares are "restricted" as that term is defined under the Securities
Act, and in the future may be sold in compliance with Rule 144 under the
Securities Act.
Management's
Discussion and Results of Operations and Financial Conditions
The
following discussion should be read in conjunction with our financial statements
and the related notes appearing elsewhere in this report. The following
discussion contains forward-looking statements reflecting our plans, estimates
and beliefs. Our actual results could differ materially from those
discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to those discussed
below and elsewhere in this report, particularly in the section entitled "Risk Factors".
ITEM
5.01 CHANGE IN CONTROL
(a)
Pursuant to a Final Definitive Agreement dated as of December 3, 2010 (the
"Agreement"), Specialized Services, Inc.., a Michigan corporation (the
"Registrant" ) and Exergetic Energy Inc., a Michigan
corporation ("Exergetic") it is agreed that the Registrant will merge into
Exergetic . The Agreement is attached as Exhibit 10.3 hereto. Upon the
consummation of the merger (the "Closing"), Exergetic will become the successor
reporting company under the Exchange Act. The Agreement was adopted by the
unanimous consent of the Board of Directors and by written approval of 76% of
the issued and outstanding shares of the Registrant and by the board of
directors of Exergetic.
The
Agreement provides that Exergetic issue a total of 360,600 shares of common
stock to the present Selling shareholders of the Registrant in exchange for the
360,600 issued and outstanding shares of the Registrant held by Registrant's
Selling shareholders and an exchange ratio of 1 share of Exergetic shares for
every Registrant share for the remaining Shareholders (112,741 + the 1,750,000
issued to Exergetic). Following the Closing of the Agreement, Exergetic, as
the successor reporting company, shall have a total of 12,223,341 shares issued
and outstanding.
(b) The
following table contains information regarding the shareholder ownership of
Exergetic, its directors and executive officers and those persons or entities
who beneficially own more than 5% of Exergetic’s shares post
merger:
|
Name
|
Amount of Stock
Beneficially owned (1)
|
Percent of Common Stock
Beneficially Owned
|
||||||
|
C.
B. McCollum, Chairman and CEO
18695
Oak Drive
Detroit,
MI 48221
|
7,500,000 | 61.00 | % | |||||
|
Clarence
McCollum, President
1324
Iron Forge
Forestville,
Md 20747
|
1,000,000 | 8.00 | % | |||||
|
Brian
K. McCollum, Chief Operations Officer
14517
Hampshire Hall Court
Upper
Marlboro, Md. 20772
|
1,500,000 | 12.00 | % | |||||
(1) Based
upon 12,223,341 outstanding shares of common stock, following the Closing and
the issuance of shares to Registrant's shareholders.
9
ITEM 5.02 DEPARTURE OF DIRECTORS OR
PRINCIPAL OFFICERS; ELECTION OF DIRECTORS, APPOINTMENT OF PRINCIPAL
OFFICERS
The
Registrant reports in this current report on Form 8-K the appointment of C.B.
McCollum, Clarence McCollum, Sr., Dr. Jeffrey L. Streator and Brian K. McCollum,
to the positions delineated herewith, on December 4th,
2010.
C. B. McCollum, Chairman
& CEO
Mr. C.B.
McCollum is the founder of Exergetic Energy, Inc. As Chairman/CEO, Mr. McCollum
is responsible for Exergetic Energy’s operations including the strategic
planning, logistics, staff leadership, client direction and program
implementation. Mr. McCollum is an engineering executive with nearly two and a
half decades of experience as a Research Engineer, Product Manager & Oil
Industry Executive. Mr. McCollum got his initial start as a research engineer
for NASA in New Orleans, La nearly twenty five years ago and since that time has
held numerous research and management position. Prior to founding Exergetic
Energy, Mr. McCollum spent has past four years as a Director with the fourth
largest integrated Oil Company in North America. Additionally, he has served on
various American Petroleum Institute (API) Committees and has been published and
quoted in numerous articles on the concept of energy consumption and
optimization techniques.
His
background and knowledge of the energy business and executive management
experience provide a solid foundation upon which the organization has built its
technical merits. Mr. McCollum has amassed a seasoned group of executives and
technical experts to assist in delivering the company’s motto…..”Providing
Energy Solutions of Tomorrow, Today”. Per the combination of the various
expertise of the executive team, Mr. McCollum believes that the company is well
position to keep technology and continuous innovation at the forefront of
EXERGETIC.
Mr. C.B.
McCollum holds the following advanced degrees:
|
-
|
Bachelor
Science with Concentration Physics, Morehouse College, Atlanta, GA,
1990
|
|
-
|
Bachelor
of Mechanical Engineering, Georgia Institute of Technology, Atlanta, GA,
1992
|
|
-
|
Masters
of Mechanical Engineering, Georgia Institute of Technology, Atlanta, GA,
1994
|
|
-
|
Certified,
Lubricants Expert, United States District Court of New Jersey, Newark, NJ,
2000
|
Clarence McCollum, Sr.,
President
Mr.
Clarence McCollum has an extensive background in Signal Processing Design and
Microcode Design of electronic systems such as those found in photovoltaics
(i.e., Solar Panel Technology). He assists with the development and
implementation of the strategic vision of Exergetic Energy to develop and
implement the business strategy for all renewable energy initiatives with a
primary focus on providing guidance and an execution strategy for all Solar
Energy Projects. Clarence’s years of experience with component design of
electronics are key attributes for the Company, which help reinforce the core
technology capabilities of the organization. Listed below are key projects and
accomplishments that further articulate the range of his experience and
technical acumen within this field.
10
In 1977,
he established CBM Electronics, Inc. to foster the professional abilities of
minorities in the field of engineering & electronics. With a specialization
in Electronic Signal Processing and Microcode System Design, his firm quickly
established itself as a premier electronics company. Within the first five years
of operation, CBM Electronics was engaged in the design of electronic systems
for the United States Department of Defense and the Department of Energy,
respectively.
Mr.
McCollum, holds the following advanced degrees:
|
-
|
Bachelor
of Science, Electrical Technology, S.C. State College, Orangeburg SC,
1965
|
|
-
|
Bachelor
of Science, Electrical Engineering, G.W. University, Washington, D.C.,
1969
|
|
-
|
Masters
Degree, Computer Science, George Washington University, Washington, D.C.,
1973
|
Dr. Jeffrey L. Streator,
Chief Technology Officer
Dr.
Jeffrey L. Streator brings to the corporation more than 25 years of university
research experience from two of the top research/engineering institutions in the
nation. Both as a Ph.D. candidate at University of California at Berkeley and a
tenured professor at The Georgia Institute of Technology, Dr. Streator has been
recognized for contributions that his work has provided to the field of
Nanotechnology. Dr. Streator’s specific area of research is Nanotechnology of
thin films with special considerations being paid to the manufacture and
applications of these molecular layer surfaces. In its’ most basic form,
Nanotechnology is often viewed as ubiquitous technology because the applications
and innovations can be applied to all fields- from medicine to electronics. With
the future viability of alternative energy systems in the new technological
capabilities of SMART Devices, Nanotechnology research holds the key to the
advancement and sustainability of the new energy economy.
Dr.
Streator holds the following advanced degrees:
|
-
|
Bachelor
Degree of Engineering Sciences, Harvard University, MA,
1984
|
|
-
|
Masters
of Science, Mechanical Engineering, U.C. Berkeley, CA,
1986
|
|
-
|
Doctorate
of Philosophy, Mechanical Engineering, U.C. Berkeley, CA,
1990
|
Brian K. McCollum, Chief
Operations Officer
As Chief
Operations Officer, Mr. Brian K. McCollum is responsible for the daily
operations of each business unit of the company. Brian oversees the company's
core corporate organizations that support all areas of the business worldwide,
including research and development, information management, and
strategy.
His
primary role includes ensuring that the resources as set by the board of
directors are used in the most efficient way possible in order to create the
maximum value for the company’s shareholders. Mr. McCollum formerly served as
Chief Operations Officer for Alpha Imports, LLC as well as being the Director of
Arts and Education for Step Afrika. Brian has extensive international business
experience from studying abroad in both Africa and Europe. In fact, Brian has
spent an extensive amount of time over the past five years working in the
following countries—South Africa, Tanzania, Ghana, Liberia, Zimbabwe, Thailand,
Ireland and Brazil. He brings his international expertise to expand and
diversify the operations of Exergetic Energy to different international
markets.
Mr.
McCollum holds the following advanced degrees:
|
-
|
Bachelor
of Arts, Business Administration, Corporate Finance, Morehouse College,
Atlanta, GA, 1999
|
|
-
|
Masters
of Divinity, Princeton Theological Seminary, Princeton, NJ,
2010
|
11
ITEM 9.01 FINANCIAL STATEMENTS AND
EXHIBITS
Consolidated
Financial statements for Exergetic Energy will be produced in an Amended 8K to
be filed within 71 calendar days from the date following the filing of this 8K,
if not sooner, as provided in Rule 8-04(b) of Regulation S-X.
Effective
December 3, 2010, the Company entered into a Final Definitive Agreement with
Exergetic Energy, Inc. and Exergetic Energy Inc. is to become the successor
operating company.
(b) The
following documents are filed as exhibits to this current report on Form 8-K or
incorporated by reference herein. Any document incorporated by reference is
identified by a parenthetical reference to the SEC filing that included such
document.
|
Exhibit No.
|
Description
|
|
|
10.3
|
Final
Definitive Agreement between the Registrant and Exergetic Energy,
Inc.
|
|
|
10.4
|
Promissory
Note between the Registrant and Exergetic Energy,
Inc.
|
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.
|
Exergetic
Energy, Inc.
|
|
|
Dated:
December 27th, 2010
|
 |
|
C.B.
McCollum, Chairman
|
12