Attached files
| file | filename |
|---|---|
| EX-99.1 - COMPOSITE TECHNOLOGY CORP | v205937_ex99-1.htm |
| EX-10.4 - COMPOSITE TECHNOLOGY CORP | v205937_ex10-4.htm |
| EX-10.3 - COMPOSITE TECHNOLOGY CORP | v205937_ex10-3.htm |
| EX-10.1 - COMPOSITE TECHNOLOGY CORP | v205937_ex10-1.htm |
| EX-10.2 - COMPOSITE TECHNOLOGY CORP | v205937_ex10-2.htm |
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): December 17, 2010 (December 13,
2010)
COMPOSITE
TECHNOLOGY CORPORATION
(Exact
name of registrant as specified in Charter)
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Nevada
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000-10999
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59-2025386
|
||
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(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
File No.)
|
(IRS
Employee Identification No.)
|
2026
McGaw Avenue
Irvine,
California 92614
(Address
of Principal Executive Offices)
(949)
428-8500
(Issuer
Telephone number)
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:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Forward
Looking Statements
This Form
8-K and other reports filed by Registrant from time to time with the Securities
and Exchange Commission (collectively the “Filings”) contain or may contain
forward looking statements and information that are based upon beliefs of, and
information currently available to, Registrant’s management as well as estimates
and assumptions made by Registrant’s management. When used in the filings the
words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”
or the negative of these terms and similar expressions as they relate to
Registrant or Registrant’s management identify forward looking statements. Such
statements reflect the current view of Registrant with respect to future events
and are subject to risks, uncertainties, assumptions and other factors
(including the risks contained in the section of the Registrant’s Form 10-K
entitled “Risk Factors”) relating to Registrant’s industry, Registrant’s
operations and results of operations and any businesses that may be acquired by
Registrant. Should one or more of these risks or uncertainties materialize, or
should the underlying assumptions prove incorrect, actual results may differ
significantly from those anticipated, believed, estimated, expected, intended or
planned.
Although
the Registrant believes that the expectations reflected in the forward looking
statements are reasonable, the Registrant cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, the
Registrant does not intend to update any of the forward-looking statements to
conform these statements to actual results.
Item 1.01 Entry into a Material Definitive Agreement
The
following discussion provides only a brief description of the applicable
documents described below. The discussion is qualified in its
entirety by the full text of the documents, which are attached to this Current
Report on Form 8-K as exhibits 10.1 through 10.4.
Loan and
Security Agreement
As of
December 13, 2010, Composite Technology Corporation, CTC Cable Corporation and
CTC Renewables Corporation (jointly and severally, “Composite” or the “Company”)
entered Conditional Waiver and Modification No. 1 (“First Modification”) and
into a Conditional Waiver and Modification No. 2 to Loan and Security Agreement
(“Second Modification”) with Partners for Growth II, L.P.(“PFG”).
Effective
to October 18, 2010, the for the First Modification, PFG agrees
to modify the original Loan Agreement, for any breach of the Cumulative
Operating Income (Losses) financial covenant set forth in Section 5 of the
Schedule to the Loan Agreement beginning with the period ended September 30,
2010. A security deposit was added to the schedule to the Loan Agreement
requiring the Company to deposit an amount equal to the cumulative shortfall
between the required minimum Cumulateive Operating Income (Losses) and the
Company’s actual Cumulative Operating Income (Losses) realized by the Company
during each applicable monthly period. PFG will return to the Company the amount
in excess of the security deposit then held by PFG over the cumulative shortfall
at the last measurement date. In addition, the Company will provide PFG a weekly
cash flow report.
Pursuant
to the terms and subject to the conditions set forth in the Second Modification,
PFG agrees to modify the original Loan Agreement, waives certain possible
defaults through the earliest to occur of (i) January 14, 2011, (ii)
repayment of the senior secured term loan in the amount of $10,000,000 (“Loan”),
(iii) Borrower’s certification of its compliance with the Liquidity Covenant
under the Loan and Security Agreement, and (iv) the occurrence of a Default,
other than failure to satisfy the Specified Covenants (“Waiver Period End
Date”), and defers further payment of the Security Deposit until the Waiver
Period End Date. The Company will pay PFG an amount equal to $160,000 for this
waiver. The Company also will pay PFG costs and expenses (including reasonable
attorneys’ fees and expenses) incurred in connection with the Second
Modification. In addition, the Company will cause monies paid to the Company
under the Escrow Agreement relating to the Asset Purchase Agreement dated as of
August 10, 2009 by and among Daewoo Shipbuilding & Marine Engineering Co.,
Ltd., DeWind, Inc. and the Company, as amended (the “Purchase Agreement”),
directly paid over to PFG within one business day after the Company’s receipt of
the funds. Such Escrow Proceeds paid to PFG will be credited against any fees
and expenses payable to PFG under the Loan Documents, to interest due on
outstanding obligations, to the security deposit and finally to principal. PFG
has sole discretion to remit back to the Company all or any portion of the
Escrow Proceeds so long as remitted to the Company within three business days
after the business day on which PFG has received the funds. The Company will
provide PFG additional reports detailing any proceeds paid or payable to the
Company under the Escrow Agreement.
2
Warrants
In
addition, effective as of December 13, 2010, the Company repriced the warrants
originally issued to PFG on April 12, 2010as follows: a reduction in the
exercise price from $0.29 to $0.24 for 5 million warrants issued to lender
expiring in April 2013; and iii) a reduction in the exercise price from $1.00 to
$0.69 for 5 million warrants issued to lender expiring in April
2015..
Copies of
the First Modification, Second Modification and amended and restated Warrants
are filed as Exhibits 10.1 through 10.4 respectively, to this Form
8-K and are incorporated herein by reference. The descriptions of the material
terms of the First Modification, Second Modification and amended and restated
Warrants are qualified in their entirety by reference to such
exhibits.
Item
2.03. Creation of a Direct Financial Obligation
As
described more fully under Item 1.01, pursuant to the terms and subject to the
conditions set forth in the First Modification and Second Modification, PFG
agrees to modify the original Loan Agreement, for any breach of the Cumulative
Operating Income (Losses) financial covenant set forth in Section 5 of the
Schedule to the Loan Agreement beginning with the period ended September 30,
2010. A security deposit was added to the schedule to the Loan Agreement
requiring the Company to deposit an amount equal to the cumulative shortfall
between the required minimum Cumulative Operating Income (Losses) and the
Company’s actual Cumulative Operating Income (Losses) realized by the Company
during each applicable monthly period. PFG will return to the Company the amount
in excess of the security deposit then held by PFG over the cumulative shortfall
at the last measurement date. . The Company must pay PFG a waiver fee equal to
$160,000. In addition, the Company must cause escrow proceeds paid to it
pursuant to the Purchase Agreement to be directly paid over to PFG, except for
monies nominally paid to the Company but required under the terms of the
Purchase Agreement or Escrow Agreement to be immediately paid to third party
claimants under the Purchase Agreement.
Item
3.02. Unregistered Sales of Equity Securities
Effective
as of December 13, 2010, the Company repriced (i) amended and restated warrants
in favor of PFG to purchase 5,000,000 shares of the Company’s common stock at
$0.24 per share and (ii) amended and restated warrants favor of PFG to purchase
5,000,000 shares of the Company’s common stock at $0.69 per
share. The Company relied upon the exemption from registration
as set forth in Section 4(2) of the Securities Act for the issuance of these
securities. The recipient represented that it took its securities for investment
purposes without a view to distribution and had access to information concerning
the Company and its business prospects, as required by the Securities Act. In
addition, there was no general solicitation or advertising for the acquisition
of these securities.
3
Item
8.01 Other
Events
On
December 15, 2010 members of the Registrant’s management team hosted a
conference call and simultaneous audio webcast to discuss the Registrants
financial results of the fiscal year ending September 30, 2010. A
copy of the transcript of the conference call is furnished as Exhibit 99.1 to
this report.
The
information in this Current Report, including the presentation attached hereto
as Exhibit 99.1, is being furnished pursuant to Item 8.01 and shall not be
deemed "filed" for the purposes of Section 18 of the Securities and Exchange Act
of 1934, as amended, or otherwise subject to the liabilities of that Section.
The information in the Current Report shall not be incorporated by reference
into any registration statement pursuant to the Securities Act of 1933, as
amended.
Item
9.01. Financial Statement
and Exhibits.
(d)
Exhibits
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Exhibit
Number
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Description
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10.1
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Conditional Waiver and Modification to Loan and Security Agreement
by and between Partners
for Growth II, L.P., Composite Technology Corporation, CTC Cable
Corporation and CTC
Renewables Corporation, dated December 13,
2010.
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|
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10.2
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Conditional Waiver and Modification No. 2 to Loan and Security
Agreement by and between
Partners for Growth II, L.P., Composite Technology Corporation, CTC
Cable Corporation
and CTC Renewables Corporation, dated December 13,
2010.
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10.3
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Amended and Restated Warrant | |
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10.3
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Amended and Restated Warrant | |
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99.1
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Transcript
of Fiscal Year Ending September 30, 2010 Earnings Conference Call for the
Registrant dated as of December 15,
2010.
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4
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 hereunto
duly authorized.
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Composite
Technology Corporation
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By:
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/s/ Domonic J. Carney | |
| Domonic J. Carney | |||
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Chief
Financial Officer
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Dated:
December 17, 2010
5
Exhibit
Index
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Exhibit
Number
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Description
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10.1
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Conditional Waiver and Modification to Loan and Security Agreement
by and between Partners
for Growth II, L.P., Composite Technology Corporation, CTC Cable
Corporation and CTC
Renewables Corporation, dated December 13,
2010.
|
|
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10.2
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Conditional Waiver and Modification No. 2 to Loan and Security
Agreement by and between
Partners for Growth II, L.P., Composite Technology Corporation, CTC
Cable Corporation
and CTC Renewables Corporation, dated December 13,
2010.
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10.3
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Amended and Restated Warrant | |
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10.3
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Amended and Restated Warrant | |
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99.1
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Transcript
of Fiscal Year Ending September 30, 2010 Earnings Conference Call for the
Registrant dated as of December 15,
2010.
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