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RNS Number : 3077U
Enova Systems, Inc.
20 December 2011
20 December 2011
Enova Systems, Inc. ("Enova" or the "Company") Proposed
Fundraise Update and Grant of Options
On December 15, 2011, Enova entered into a Warrant and Common
Stock Purchase Agreement (the "Purchase Agreement") with Anthony
Low-Beer and ALB Private Investments LLC, each of whom is an
accredited investor, pursuant to which Purchase Agreement such
investors agreed to purchase up to 3,000,000 shares of Enova's
common stock ("Common Stock") at $0.15 per share for an aggregate
purchase price of $450,000, together with warrants to purchase up
to an equal number of shares of the Company's common stock.
Pursuant to the terms of the Purchase Agreement, Enova is permitted
to sell an aggregate of up to 15,000,000 shares of common stock
(the "Investor Shares") at $0.15 per share and warrants to acquire
up to an equal number of shares of common stock (the "Warrant
Shares") (the "Warrants; Warrant Shares; and, with the Investor
Shares, collectively, the "Securities"). As not all of the Investor
Shares authorized for sale had been subscribed for as of December
15, 2011, Enova may continue to negotiate with previously contacted
accredited investors and may add one or more of such accredited
investors as additional purchasers under the Purchase Agreement
(any such purchaser is sometimes referred to herein as
"Investor").
The closing of the sale of the Securities is contingent on,
among other things, the approval by the shareholders of the Company
of the issuance of the Investor Shares and Warrants pursuant to the
Purchase Agreement in accordance with NYSE Amex rules and listing
of the Investor Shares and Warrant Shares with NYSE Amex (subject
to official notice of issuance). Because the closing is subject to
various conditions, there can be no assurance that the closing will
occur. Additionally, there is no assurance that all 15,000,000
Investor Shares and accompanying Warrants will be subscribed for by
Investors.
The Purchase Agreement may be terminated (a) by consent of the
parties, (b) by the vote of a majority of the Investors if the
Company has breached any representation or warranty or any material
covenant, (c) by the Company as to any Investor if the Investor has
breached any representation, warranty or any material breach of any
covenant, or (d) by either the Company or the Investors purchasing
a majority of the Investor Shares (as to all Investors) if the
closing has not occurred on, or prior to, December 30, 2011.
The Warrants will be exercisable for an equal number of shares
of Common Stock as the Investor Shares and will be subject to
appropriate adjustment for stock splits, combinations,
reclassifications and the like. The Warrants will be exercisable
for a period of five years, with earlier termination in the case of
certain extraordinary transactions and earlier call by Enova as set
forth below. The Warrants will be exercisable at the option of the
holder at a price equal to the volume weighted average price of the
Company's common stock for the twenty trading days immediately
prior to the date of the closing of the sale of the Investor Shares
(the "Exercise Price"). The Warrants will further provide that if,
for a twenty (20) consecutive trading day period, the average of
the closing bid and asked prices of the Common Stock quoted in the
Over-The-Counter market or the last reported sale price of the
Common Stock or the closing price quoted on the NYSE Amex or any
other U.S. exchange on which the Common Stock is listed, whichever
is applicable (or such other reference reasonably relied upon by
the Company if not so published), is greater than or equal to two
times the Exercise Price with at least an average of ten thousand
(10,000) shares traded per day (appropriately adjusted for stock
splits, combinations, reclassifications and the like) during such
period (the "Early Termination Event"), then, on the 10th calendar
day following written notice from the Company notifying the Warrant
holders of the Early Termination Event, any holder who has not, by
such date, elected to exercise its Warrants for cash, such Warrants
will be deemed automatically exercised on such 10th calendar day
pursuant to the cashless/net exercise provisions under the
Warrants.
Merriman Capital, Inc. ("Merriman") has acted as the sole
placement agent for the offering pursuant to the Purchase
Agreement. At closing, Merriman will be paid a cash fee equal to
ten percent of the gross proceeds received from the sale of the
Investor Shares, less $100,000 which is payable to a third
party.
Under the terms of the Purchase Agreement, Enova is obligated to
enter into a Registration Rights Agreement with each of the
Investors no later than the closing of the sale of the Investor
Shares. The Registration Rights Agreement will require the Company
to file with the SEC a registration statement to cover the resale
of the Investor Shares and Warrant Shares covered by the
Registration Rights Agreement no later than thirty days of the
closing of the sale of the Investor Shares. If not all of the
Investor Shares and Warrant Shares may be sold on a delayed or
continuous basis under the provisions of Rule 415 under the
Securities 1933 Act, the Registration Rights Agreement will provide
that such shares will be removed from the registration statement
and/or the Investors will agree to such restrictions and
limitations on the registration and resale of such shares as the
SEC may require to assure the Company's compliance with the
requirements of said Rule 415. The Company will have certain
customary obligations with respect to the required registration
statement. The Investors will be required to provide the Company
with certain information to assist in the registration of the
Investor Shares and Warrant Shares. The Registration Rights
Agreement will contain customary indemnification and contribution
provisions.
Each of the committed Investors is (and all other Investors will
be required to represent that it is) an "accredited investor" (as
such term is defined under Regulation D promulgated by the
Securities and Exchange Commission ("SEC")). The Securities are
expected to be sold in a transaction exempt from the registration
requirements under Section 5 of the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to Section 4(2) thereof
and in reliance upon Rule 506 of Regulation D promulgated by the
SEC.
This Current Report on Form 8-K does not constitute an offer of
any securities for sale. The securities to be sold pursuant to the
Purchase Agreement have not been registered under the Securities
Act and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
Enova intends to seek approval of the issuance of the maximum
number of Investor Shares and Warrant Shares at the Annual Meeting
of Shareholders currently scheduled for December 30, 2011.
The proxy containing the notice of the Annual Meeting of
Shareholders was filed with the SEC and mailed to shareholders on
19 December 2011. Enova advises each of its shareholders to read
the Proxy Statement because it contains important information.
Shareholders can get the Proxy Statement and any relevant documents
for free at the SEC's web site or free of charge by writing to
Enova Systems, Inc., 1560 West 190th Street, Torrance, California
90501, Attention: Chief Financial Officer and requesting a copy
thereof.
The Purchase Agreement, the form of Warrant and the form of
Registration Rights Agreement were filed with the SEC with Enova's
Form 8-K with date of earliest event reported of 15 December 2011
as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated
herein by reference. The foregoing summary of terms is qualified in
its entirety by such agreements.
Stock Option Grants
The Company also announces that effective 19 December 2011, a
total of 750,000 options over common shares in the Company with no
par value per common share have been awarded pursuant to the 2006
Equity Compensation Plan (the "Plan") as follows:
Name Position Number of Total Options Current Current
Options Held Common Share Total Holdings
Granted Holding (inc. Options
held) of
Issued Common
Share Capital
(%)
CEO 768,500
Mike Staran (Director) 300,000 373,000 95,500 (2.4%)
CFO 493,408
John Micek (Director) 250,000 59,500 183,908 (1.6%)
COO 380,000
John Mullins (Director) 200,000 180,000 - (1.2%)
The options have a term of three years from the date of grant
(the "Term"). The exercise price of the options will be the greater
of:
1. the effective share value of the Company's stock determined
on a five-day Volume-Weighted Average Closing Price ("VWAP") as
traded on the NYSE Amex for such five day trading period after a
capital raising has been completed by the Company; or
2. the fair market value of the common shares of the Company
determined in accordance with the Plan based on the last reported
sale price as traded on the NYSE Amex as of the date of grant.
The options will only vest in the event that:
1. the Company is sold during the Term for a price that results
in proceeds to the Company's shareholders for each outstanding
share of Common Stock equal to or greater in value than at least
twice the exercise price; or
2. during any ten (10) day trading period during the Term when
the Company's common shares have a VWAP for such ten (10) day
trading period equal to or greater than twice the exercise price
based on the average of the closing bid and asked prices of the
Company's Common Stock if quoted in the Over-The-Counter or similar
market or the last reported sale price of the Common Stock or the
closing price quoted on the NYSE Amex or any other U.S. exchange on
which the Common Stock is then listed, whichever is applicable, as
published in the Western Edition of The Wall Street Journal (or
such other reference reasonably relied upon by the Company if not
so published), .
About Enova:
Enova Systems (http://www.enovasystems.com) is a leading
supplier of efficient, environmentally friendly digital power
components and systems products. The Company's core competencies
are focused on the development and commercialization of power
management and conversion systems for mobile applications. Enova
applies unique 'enabling technologies' in the areas of alternative
energy propulsion systems for light and heavy-duty vehicles as well
as power conditioning and management systems for distributed
generation systems. The Company develops, designs and produces
non-invasive drive systems and related components for electric,
hybrid-electric, and fuel cell powered vehicles in both the "new"
and "retrofit" vehicle sales market. For further information,
contact Enova Systems directly, or visit its Web site at
http://www.enovasystems.com. For further information:
Enova Systems, Inc +1 310 527 2800 Mike Staran, President and
Chief Executive Officer John Micek, Chief Financial Officer
Daniel Stewart +44 (0)20 7776 6550 Paul Shackleton/Jamie
Barklem
Threadneedle Communications +44 (0)20 7653 9850 Josh Royston
Graham Herring Hilary Millar
Additional Information:
This news release contains forward-looking statements relating
to Enova Systems and its products that are intended to be covered
by the safe harbor for forward-looking statements provided by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that are not historical facts. These
statements can be identified by the use of forward-looking
terminology such as "believe," "expect," "may," "will, " "should,"
"could," "project," "plan," "seek," "intend," or "anticipate" or
the negative thereof or comparable terminology and statements about
industry trends and Enova's future performance, operations and
products. These forward-looking statements are subject to and
qualified by certain risks and uncertainties. These and other risks
and uncertainties are detailed from time to time in Enova Systems'
periodic filings with the Securities and Exchange Commission,
including but not limited to Enova's annual report on Form 10-K for
the year ended December 31, 2010 and Form 10-Q for the quarterly
period ending September 30, 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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