Attached files
| file | filename |
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| EX-4.3 - NACEL ENERGY CORP | v167804_ex4-3.htm |
| EX-4.2 - NACEL ENERGY CORP | v167804_ex4-2.htm |
| EX-4.1 - NACEL ENERGY CORP | v167804_ex4-1.htm |
| EX-4.4 - NACEL ENERGY CORP | v167804_ex4-4.htm |
| EX-99.1 - NACEL ENERGY CORP | v167804_ex99-1.htm |
| EX-10.1 - NACEL ENERGY CORP | v167804_ex10-1.htm |
| EX-10.4 - NACEL ENERGY CORP | v167804_ex10-4.htm |
| EX-10.3 - NACEL ENERGY CORP | v167804_ex10-3.htm |
| EX-10.2 - NACEL ENERGY CORP | v167804_ex10-2.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): November 23, 2009
Commission
File Number: 333-142860
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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(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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(720) 204-1150
(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:
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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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¨
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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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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¨
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 – Entry into a Material Definitive Agreement.
On
November 23, 2009, NACEL Energy Corporation (the Company or NACEL) entered into
a definitive Securities Purchase Agreement for the issuance of a Senior Secured
Convertible Note (the “Note”) and Warrants in a private placement with a single
institutional investor which will result in gross proceeds to NACEL of $750,000.
NACEL expects to use the proceeds for working capital purposes. The closing of
this transaction occurred on November 24, 2009.
The
original principal amount of the Note is $900,000, and the Note does not accrue
any interest unless an event of default occurs, in which case the interest rate
shall be 18% per annum. The Note is convertible by the holder at any time after
closing into shares of NACEL’s common stock at an initial conversion price of
$0.90. The Note amortizes over 12 months in 9 equal monthly installments
beginning the 4th month
and matures on December 1, 2010. NACEL may pay each monthly
installment amount due on the 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 commons
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 due date, with such price being subject to a floor
of $0.75. Upon an event of default under the Note, the holder has the right to
require NACEL to redeem the Note at a 135% premium.
In
accordance with the terms of a Security Agreement, NACEL’s obligations under the
Note and the other transaction documents is secured by a first priority,
perfected security interest in all of the assets of
NACEL. Additionally, in accordance with the terms of a Guaranty, each
of NACEL’s subsidiaries guarantee the obligations of NACEL under the Note and
the other transaction documents, and each such guarantee is secured by a first
priority, perfected security interest in all of the assets of each such
subsidiary
In the
transaction, NACEL issued Series A Warrants to the investor, which will be
exercisable for a period of 5 years for up to 1,250,000 shares of NACEL’s common
stock, with an initial exercise price of $0.90.
NACEL
also issued Series B Warrants that entitles the investor to purchase up to
1,000,000 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
to be filed by NACEL. NACEL can require the investor to purchase all
of the shares under the Series B Warrant upon satisfaction of certain customary
conditions. Upon exercise of the Series B Warrants, the investor will be
entitled to exercise the same proportion of the Series C Warrants to be issued
to the investor. The Series C Warrants are exercisable for a period
of 5 years for up to 1,250,000 shares of NACEL’s common stock. The initial
exercise price of both the Series B Warrant and the Series C Warrant is
$0.90. The conversion price of the Note, the exercise price of each
of the Warrants and the number of warrant shares are all subject to adjustment
(including full-ratchet) upon occurrence of certain events.
In
accordance with the terms of the Note and the Warrants, the investor may not
convert the Note or exercise a Warrant if after giving effect to such conversion
or exercise, as the case may be, the investor would beneficially own greater
than 4.9% of the outstanding shares of NACE’s common stock after giving effect
to such conversion or exercise, as applicable.
Under the
terms of the Note, NACEL has agree that it, and each of its subsidiaries, will
not incur or allow to exist any indebtedness, other than the indebtedness
evidenced the Note and Permitted Indebtedness. Permitted Indebtedness
is defined to include, among other things, existing unsecured indebtedness of
NACEL provided that such existing indebtedness is subordinated to payment of the
Note, other indebtedness of NACEL and its subsidiaries not to exceed an
aggregate of $250,000 provided that such indebtedness is subordinated to payment
of the Note, equipment leases and purchase money obligations not to exceed an
aggregate of $150,000, and indebtedness incurred by a NACEL subsidiary for the
specific purpose of development, construction and/or commission of a specific
wind energy project (“Project Indebtedness”). Such Project Indebtedness shall be
consented to and approved by the Note holder, which consent and approval shall
not be unreasonably withheld, and can be secured only by the specific project
without NACEL or any of its other subsidiaries being obligated on, or a
guarantor of, the Project Indebtedness. The holder agrees to subordinate its
security interest, if necessary, to approved Project Indebtedness.
Under the
terms of a Registration Rights Agreement entered into in this transaction, NACEL
is required to file, on or before December 31, 2009, a registration statement
with the SEC covering the resale of the common stock issuable upon conversion of
the Note and upon the exercise of the Warrants. NACEL will pay all
expenses incurred in connection with filing such registration
statement.
NACEL is
prohibited from issuing any equity or equity-linked securities until 120 trading
days after the effective date of the Registration Statement, with several
limited exceptions. However, this prohibition does not apply to the issuance and
sale of securities by a NACEL subsidiary to a person that (a) is, itself or
through its subsidiaries, an operating company in a business synergistic with
NACEL’s business, (b) provides strategic benefits to the subsidiary’s wind
project, and (c) is the lender of approved Permitted Indebtedness. In addition,
for a period ending 2 years from the closing, the investor will have the right
to participate in any capital raising transaction by NACEL.
In
connection with the private placement, NACEL will pay to a placement agent a
cash fee equal to 10% of the gross proceeds received by NACEL and the issuance
of Series A Warrants, which will be exercisable for a period of 5 years, for up
to 83,333 shares of NACEL’s common stock, with an initial exercise price of
$0.90.
The
securities sold in the private placement and the shares issuable upon the
conversion of the Note and upon the exercise of the Warrants have not been
registered under the Securities Act of 1933, as amended, and may not be offered
or sold in the United States without being registered with the Securities and
Exchange Commission (“SEC”) or through an applicable exemption from registration
requirements. The Note and the Warrants, and the shares of NACEL’s common stock
issuable upon conversion of the Note or exercise of the Warrants, were offered
and sold in reliance upon exemptions from registration pursuant to Rule 506 of
Regulation D and Section 18(b)(4)(D) of the Securities Act and/or Section 4(6)
of the Securities Act.
The description of, among other
things, the terms of the Securities Purchase Agreement, the Note, the Warrants,
the Registration Rights Agreement, the Security Agreement and the Guaranty, 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.
A copy of
the press release announcing the signing of the Securities Purchase Agreement is
attached hereto as an exhibit.
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 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 November 24, 2009
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4.2
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Form
of Series A Warrant
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4.3
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Form
of Series B Warrant
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4.4
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Form
of Series C Warrant
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10.1
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Securities
Purchase Agreement dated November 23, 2009 between NACEL Energy
Corporation and the institutional investor.
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10.2
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Registration
Rights Agreement
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10.3
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Security
Agreement
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10.4
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Guaranty
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99.1
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Press
Release
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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:
November 27, 2009
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By: /s/ Paul
Turner
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Paul
Turner, Chief Executive
Officer
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