Form 8-K AMERICAN DG ENERGY INC For: Aug 10
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E-mailUNITED 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) August 10, 2016 (August 9, 2016)
AMERICAN DG ENERGY INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
001-34493 | 04-3569304 | |
(Commission File Number) | (IRS Employer Identification No.) | |
45 First Avenue | ||
Waltham, Massachusetts | 02451 | |
(Address of Principal Executive Offices) | (Zip Code) | |
(781) 522-6020
(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:
¨ 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 August 9, 2016 American DG Energy Inc. (the "Company") entered into a convertible note exchange agreement (the "Agreement") with Trifon and Despina Pantopoulou Natsis, who agreed to exchange certain 6% convertible promissory notes (the "Notes") in an aggregate amount of $4,263,737 in principal and prepaid interest, as soon as the Notes are distributed from their trust, and they become the true owners of the Notes. In consideration for the exchange of these Notes, the Company will provide an aggregate amount of 9,700,000 shares of common stock of Eurosite Power Inc. ("Eurosite'), at $0.001 par value. The exchange rate used will be $0.40 per share of Eurosite common stock. Also, Mr. and Mrs. Natsis agreed to cancel and relinquish their warrants to purchase an aggregate amount of 606,000 shares of Eurosite common stock from the Company.
The Company also on August 9, 2016 entered into a share purchase agreement ("Share Purchase Agreement") with Elias Samaras and Jacques De Saussure to sell some of the Company's remaining common stock of Eurosite. The Company agreed to sell an aggregate of 5,500,000 shares of Eurosite Common stock at $0.40 per share for an aggregate amount of $2,200,000. The Company further agrees in the Share Purchase Agreement, that the proceeds from the share purchase will directly be paid over to Mr. and Mrs. Natsis when they become the owners of the Notes in order to further reduce the amount of the Notes. The Share Purchase Agreement also provided that Mr. and Mrs. Natsis would cancel warrants they hold to buy 414,000 shares of common stock of Eurosite from the Company, when the Company pays them the profits they receive from the Share Purchase Agreement.
The foregoing description is qualified in its entirety by reference to the full text of the Convertible Note Exchange Agreement and the Share Purchase Agreement attached hereto as Exhibit 10.1 and 10.2 and incorporated herein by reference.
The attached Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 2.01. Completion of Acquisition or Disposition of Assets
The information contained in Item 1.01, Exhibit 10.1, and Exhibit 10.2 are hereby incorporated by reference into this Item 2.01.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description of Exhibit |
10.1 | Form of Convertible Note Exchange Agreement |
10.2 | Form of Share Purchase Agreement |
99.1 | Press Release |
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 thereunto duly authorized.
Date: | August 10, 2016 | AMERICAN DG ENERGY INC. |
By: /s/ Bonnie Brown | ||
Bonnie Brown, Chief Financial Officer | ||
CONVERTIBLE NOTE EXCHANGE AGREEMENT
CONVERTIBLE NOTE EXCHANGE AGREEMENT, dated as set forth on the signature page, by and among American DG Energy Inc., a Delaware corporation (“ADGE”), and the other parties identified on the signature page.
WHEREAS, ADGE and RBC cees Nominees Limited B2599/B3957 (“RBC”) previously were considering the execution of a Convertible Note Exchange Agreement (the “Prior Agreement”) relating to the exchange of one or more of the 6% convertible promissory notes (the “Notes”) of ADGE for shares (the “EuroSite Shares”) of common stock of EuroSite Power Inc., a Delaware corporation (“EuroSite”) owned by ADGE.
WHEREAS, it is now anticipated that the Notes will be distributed to the beneficiaries of the related trust, namely Trifon Natsis and Despina Pantopoulou (the “Individual Owners”), in October 2016 (the “Distribution”), and that the parties desire that the above-described exchange take place immediately after the Distribution.
WHEREAS, ADGE, RBC and the Individual Owners acknowledge that the Prior Agreement was not executed and is of no force or effect.
WHEREAS, ADGE and the Individual Owners have agreed to exchange a portion of the Notes to be distributed to the Individual Owners, as set forth on the signature page, for EuroSite Shares. The principal amount of the Notes to be exchanged and the number of EuroSite Shares to be issued for such Notes are set forth on the signature page.
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, it is agreed as follows:
1.Exchange of Notes and Cancellation of Warrants.
(a) Exchange. The Individual Owners hereby irrevocably agree to transfer to ADGE for cancellation, effective immediately after the Distribution, the Notes shown on the signature page. The Individual Owners will endorse their Notes to ADGE for cancellation and will deliver the Notes to ADGE as soon as practicable after the Distribution. Concurrently with the foregoing transfer, ADGE hereby irrevocably agrees to transfer the applicable number of EuroSite Shares it owns to the Individual Owners, all as set forth on the signature page. ADGE will effect the transfer, as soon as possible thereafter, through the facilities of the Depositary Trust Company, if permitted, or as otherwise directed by the Individual Owners. The Individual Owners acknowledge that, giving effect to the foregoing exchanges, ADGE has no obligation of any nature to the Individual Owners, including accrued interest, in respect of the Notes being exchanged. The Individual Owners also hereby relinquish, effective on the exchange, all of their rights with respect to warrants the Individual Owners own to purchase shares of EUSP common stock from ADGE, the amount underlying the warrants being 606,000 shares of EUSP common stock; the Individual Owners agree to immediately return after the exchange the related warrant certificates to ADGE for cancellation. If the Distribution does not take place as contemplated above, ADGE, the Individual Owners and RBC will make alternative arrangements to effect the exchange.
(b) Prepaid Interest. The parties acknowledge that ADGE has prepaid all of the interest on the Notes. The calculation of the number of EuroSite Shares being exchanged is a fraction, (i) the numerator of which is the principal amount of the Notes being exchanged minus the amount of prepaid interest on such Notes from the proposed date of the Prior Agreement until the scheduled maturity thereof, (ii) and the denominator of which is the price per share indicated on the signature page. For clarity, the number of EuroSite Shares to be issued is calculated at approximately 90% of the stated principal amount of the Notes.
2.Representations and Warranties of the Individual Owners. Each Individual Owner severally hereby makes the following representations and warranties to ADGE, all of which shall survive the execution and delivery of this Agreement:
(a)Validity. This Agreement has been duly and validly executed and delivered by such Individual Owner and constitutes a valid and binding obligation of such Individual Owner, enforceable against
him or her in accordance with its terms.
(b)Securities Act Considerations. Each Individual Owner is an “accredited investor” within the meaning of Securities and Exchange Commission Rule 501 of Regulation D under the Securities Act of 1933, as amended (together with the regulations thereunder, the “Securities Act”). Each Individual Owner understands that the EuroSite Shares being acquired by such Individual Owner hereunder may only be transferred or resold by way of registration of such shares for resale under the Securities Act, or an applicable exemption under the Securities Act.
(c)No Other Approval. Each Individual Owner represents that no authorization, approval, consent or license of any government or governmental entity is required to be obtained by such Individual Owner in connection with this Agreement.
3.Representations and Warranties of ADGE. ADGE makes the following representations and warranties to the Individual Owners as of the date hereof, all of which shall survive the execution and delivery of this Agreement:
(a) Organization, Good Standing, Corporate Power and Qualification. ADGE is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted.
(b) Authorization. This Agreement has been duly and validly authorized, executed and delivered by ADGE and constitutes a binding obligation of ADGE.
(c)Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority is required on the part of ADGE in order to validly consummate the transactions contemplated by this Agreement.
(d)Ownership. ADGE owns the entire right, title and interest in the EuroSite Shares being transferred hereunder, and will transfer such shares to the Original Owners, free and clear of all liens or other encumbrances.
(e)Notes Remaining Outstanding. Immediately following the transactions contemplated by this Agreement, and a separate prepayment of ADGE in the amount of $2,200,000, the amount of the Notes of ADGE that are due upon maturity that remain outstanding is $3,418,681, which will be represented by a zero coupon replacement note in the principal amount of $3,418,681.
4.Miscellaneous.
(a) Successors and Assigns. The rights and obligations of the parties shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
(b) Waiver and Amendment. The provisions of this Agreement may be amended or waived only by the written consent of ADGE and the Individual Owners.
(c) Governing Law. This Agreement and any controversy arising out of or related thereto shall be governed by, and construed in accordance with, the laws of the state of New York regardless of the laws that might otherwise govern under applicable principles of conflicts of law.
(d)Jurisdiction. The competent courts in the state of New York shall have exclusive jurisdiction over any dispute, controversy or claim arising out of or relating to this Agreement or the breach, termination or invalidity thereof.
(e)Counterparts; Fax. This Agreement may be executed and delivered by fax or .pdf signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(f)Costs and Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such costs and expenses.
IN WITNESS WHEREOF, the parties hereto have caused this amended and restated Convertible Note Exchange Agreement to be signed and effective as of the following date.
Dated: August 9, 2016, but effective as of the date of the Prior Agreement
AMERICAN DG ENERGY INC.
By: _________________________
Name: Bonnie J Brown
Title: CFO
INDIVIDUAL OWNERS (AGGREGATED):
$3,880,000.00 | Individual Owners: Trifon Natsis and Despina Pantopoulou | |
Principal amount of Notes being reduced and exchanged | ||
$383,737 | ||
Prepaid interest from the effective date to maturity (deducted from principal for purposes of the exchange) | Signature of Trifon Natsis | |
$0.40 | Signature of Despina Pantopoulou | |
Exchange price per EuroSite Share | ||
9,700,000 | Address of Individual Owners | |
Number of EuroSite Shares being exchanged | ||
AGREEMENT
for
TRANSFER OF SHARES OF COMMON STOCK
of
EUROSITE POWER INC.
Parties:
American DG Energy Inc. (“ADGE”) EuroSite Power Inc. (“EUSP”) | Jacques de Saussure Elias Samaras | John Hatsopoulos Trifon Natsis and Despina Pantopoulou |
For good and valuable consideration and intending to be legally bound, the parties irrevocably agree to the following transactions, to be effective immediately.
ADGE, together with Messrs. Samaras and de Saussure, irrevocably agree to sell and purchase, respectively, shares of common stock (“EuroSite Shares”) of EUSP owned by ADGE as follows:
◦ | ADGE will sell and Jacques de Saussure will purchase, immediately following the execution hereof, 3,000,000 EuroSite Shares at $0.40 per share or $1,200,000 in total; and |
◦ | ADGE will sell and Elias Samaras will purchase, immediately following the execution hereof, 2,500,000 EuroSite Shares at $0.40 per share or $1,000,000 in total. |
The foregoing purchases and sales result in gross proceeds to ADGE of $2,200,000. ADGE agrees to immediately pay over that amount to Mr. Trifon Natsis and Mrs. Despina Pantopoulou Natsis (the “Debt Holders”) to reduce the amount owing with respect to a portion of the 6% convertible notes of ADGE held by RBC cees Nominees Limited. It is understood by the parties that the reduction in the face amount of principal on such indebtedness will be $2,200,000 plus interest of $217,582 previously prepaid by ADGE on such amount with the coupon being 0% until scheduled maturity.
John Hatsopoulos and Trifon Natsis each agrees to use his best efforts to ensure that the above transactions, as well as the conversion of certain promissory notes of ADGE into EuroSite Shares, take place as agreed, but without requirement to expend any personal funds. Notwithstanding the foregoing, the parties acknowledge that Mr. Natsis does not and cannot in any way influence or control the actions of RBC cees Nominees Limited.
Trifon Natsis and Despina Pantapoulou hereby relinquish all of their rights with respect to warrants they own to purchase shares of EUSP common stock from ADGE, the amount underlying the warrants being 414,000 shares of EUSP common stock; they also agree to immediately return the related warrant certificates to ADGE for cancellation.
The EuroSite Shares are restricted securities under the U.S. Federal securities laws; will be transferred to the purchasers free and clear of any liens, security interests, encumbrances, rights and restrictions of any nature, and may be further transferred by the purchasers only in accordance with the provisions of the U.S. Securities Act of 1933.
Date: August 9, 2016
American DG Energy Inc. By: ____________________ Name: Title: EUROSITE POWER INC. By: ____________________ Name: Title: | __________________ Jacques de Saussure __________________ Elias Samaras __________________ John Hatsopoulos | __________________ Trifon Natsis __________________ Despina Pantopoulou | |
Investor Contact: Media Contact
John Hatsopoulos Bonnie Brown
American DG Energy Inc. American DG Energy Inc.
781.622.1120 781.522.6020
American DG Energy Announces Planned Further Reduction in Convertible Debt
WALTHAM, Mass. - August 10, 2016 - American DG Energy Inc. (NYSE MKT: ADGE, the "Company"), an On-Site Utility provider offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and fitness facilities, today announced the execution of binding agreements that will further reduce convertible debt outstanding. Via a series of related transactions, convertible debt outstanding will be reduced to just $3.4 million, down significantly from the $17.7 million in debt principal outstanding at year end 2015.
“Although various adverse factors may have influenced the terms of this deal, we believe it absolutely remained in the best interests of American DG Energy shareholders to reduce the debt burden of the company and minimize any potential shareholder dilution that may have resulted from the conversion of these securities,” said John Hatsopoulos, the Company’s Co-Chief Executive Officer.
American DG Energy will exchange approximately 9.7 million shares in EuroSite Power Inc. (OTCQX: EUSP), for elimination of a portion of the outstanding 6% convertible debentures due May 2018. A further 5.5 million shares of EuroSite Power will be sold for cash at $0.40 per share, with the resulting cash used for pre-payment of additional convertible debt. In conjunction with the transactions, 1.02 million warrants (expiring October 2017 at $0.60 strike) will also be cancelled.
The combination of these various transactions, set to be completed in the fourth quarter 2016, will allow American DG Energy to reduce the convertible debt outstanding to $3.4 million and its stake in EuroSite Power to 2.03%. The remaining convertible debt will be restructured to carry zero coupon and retain the original May 2018 maturity.
About American DG Energy
American DG Energy supplies low-cost energy to its customers through distributed power generating systems. We are committed to providing institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by local utilities - without any capital or start-up costs to the energy user - through our On-Site Utility energy solutions. American DG Energy is headquartered in Waltham, Massachusetts. Learn more about how American DG Energy reduces energy costs at www.americandg.com or follow us on Facebook and Twitter.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company's website and in Securities and Exchange Commission filings. This press release does not constitute an offer to buy or sell securities by the Company, its subsidiaries or any associated party and is meant purely for informational purposes. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
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