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 event reported): July 25, 2005 (July 19, 2005)
ENOVA SYSTEMS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
California
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(State or Other Jurisdiction of Incorporation)
0-25184 95-3056150
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(Commission File Number) (IRS Employer Identification No.)
19850 South Magellan Drive, Suite 305 Torrance, California 90502
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(Address of Principal Executive Offices) (Zip Code)
(310) 527-2800
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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. below):
|_| 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
Nominated Adviser and Broker Agreement
On July 19, 2005, Enova Systems, Inc. (the "Registrant") and the Directors of
the Registrant (the "Directors") entered into a Nominated Adviser and Broker
agreement (the "Nominated Adviser Agreement") with Investec Bank (UK) Limited
("Investec"). Pursuant to the Nominated Adviser Agreement the Registrant
appointed Investec to be its Nominated Adviser and Broker in connection with the
Registrant's application for admission of the Registrant's common stock for
trading on the AIM Market of the London Stock Exchange ("AIM").
In connection with the appointment of Investec as the Registrant's Nominated
Advisor and Broker, the Registrant is required to pay an annual retainer fee to
Investec beginning on the second anniversary of the Registrant's admission on
AIM in the amount of $70,000 (all dollar values based on an exchange rate of
(pound)1: US$1.75, prevailing on July 18, 2005). On the third anniversary of the
Registrant's admission on AIM, and for all subsequent anniversaries, the annual
retainer fee will be $87,500. The Registrant expects to receive notification of
the acceptance of the listing of its shares of common stock on AIM on or about
July 26, 2005. In addition, the Registrant has agreed to indemnify Investec
against certain claims that may arise in connection with the Registrant's
application for admission to AIM and Investec's role as the Registrant's
Nominated Adviser and Broker.
Pursuant to the Nominated Adviser Agreement, for a period of 5 years after the
admission of the Registrant's common stock on AIM, the Registrant will not issue
any additional shares of Series A Preferred Stock or Series B Preferred Stock
without the prior written consent of Investec. In addition, the Registrant will
not issue any other shares ranking ahead of the Registrant's common stock with
respect to the entitlement to dividends or any other distribution without
approval of the requisite majority of the Registrant's common stock (and, if
necessary, the requisite majority of the shares of Series A and Series B
Preferred Stock).
In addition, the Nominated Adviser Agreement provides that, for a period of 5
years after the admission of the Registrant's common stock on AIM, the
Registrant will not (without the prior written consent of Investec or the prior
approval of holders of 75% of the voting rights of the Registrant) issue an
amount of new equity securities that, when added with any equity securities
issued in the preceding 12 months, exceed 10% of the total voting rights
attached to all the equity securities of the Registrant, without first offering
the new securities to existing security holders of the Registrant, on equal
terms and in amounts equal to the proportion held by the existing shareholders
of the Registrant's outstanding equity shares.
Placing Agreement
On July 19, 2005, the Registrant and the Directors entered into a Placing
Agreement with Investec relating to the sale of up to 5,350,000 shares of the
Registrant's common stock. Pursuant to the Placing Agreement, Investec has
agreed to use its reasonable efforts to sell, and has conditionally sold, all
such shares of common stock at a price of $0.084 per share to certain eligible
investors located outside the United States. The gross proceeds from the sale
will be approximately US$20,000,000, before fees to Investec of approximately
US$1,200,000 and other costs associated with the listing and placement. The
Registrant anticipates it will receive approximately US$18,000,000 of net
proceeds from the offering.
Pursuant to the Placing Agreement, the closing of the offering is contingent
upon, among other things, the listing of the Registrant's common stock for
trading on the AIM Market of the London Stock Exchange. The Registrant expects
to receive notification of the acceptance of the listing of its shares of common
stock on the AIM Market on or about July 26, 2005.
Pursuant to the terms of the Placing Agreement, the Registrant will not issue
shares or options (excluding options granted pursuant to the Registrant's stock
option plan) for a period of three months after admission of the Registrant's
common stock on AIM without the prior written consent of Investec. In addition,
the Registrant has agreed to indemnify Investec against certain claims that may
arise in connection with the offering of the Registrant's common stock and the
application and admission of the Registrant's common stock on AIM. The Directors
of the Registrant have agreed to indemnify Investec for breaches of certain
warranties related to this offering. Except where breaches are the consequence
of fraud or willful concealment by the Director concerned, the liability of the
Directors under the Placing Agreement is limited to $50,000 for non-executive
Directors, $416,000 for Edwin Riddell and $290,000 for Larry Lombard.
The sale of common stock described above is being conducted pursuant to the
requirements of Regulation S under the Securities Act of 1933. Among other
things, each investor purchasing shares of the Registrant's common stock in the
offering has represented that he or she is not a "U.S. Person" as defined in
Rule 902 of Regulation S. In addition, neither the Registrant nor Investec has
conducted any selling effort directed at the United States in connection with
the offering. All shares of common stock to be issued in the offering will be
endorsed with a restrictive legend indicating that the shares are being issued
pursuant to Regulation S under the Securities Act and will be deemed to be
"restricted securities." As a result, the purchasers of such shares will not be
able to resell the shares in the United States without registration under the
Securities Act or an applicable exemption from the registration requirements of
the Securities Act.
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
(b)
On July 19, 2005, Carl D. Perry, Director and Vice Chairman of the Registrant,
voluntarily resigned from the Registrant's Board of Directors. There was no
disagreement between Mr. Perry and the Registrant regarding any matter relating
to the Registrant's operations, policies or practices.
On July 19, 2005, John J. Micek, III, a Director of the Registrant, voluntarily
resigned from the Registrant's board of directors. There was no disagreement
between Mr. Micek and the Registrant regarding any matter relating to the
Registrant's operations, policies or practices.
(d)
On July 19, 2005 the Board of Directors appointed Larry B. Lombard, Chief
Financial Officer of the Registrant, as a Director of the Registrant, to serve
until the next annual meeting of the shareholders of the Registrant or until his
successor is duly elected and qualified.
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.
Date: July 25, 2005
ENOVA SYSTEMS, INC.
By:
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Larry Lombard,
Chief Financial Officer