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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): June 7, 2004
ELECTRO ENERGY INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 333-90614 59-3217746
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
30 SHELTER ROCK ROAD
DANBURY, CONNECTICUT 06810
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 797-2699
MCG DIVERSIFIED, INC.
770 FIRST AVENUE NORTH
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ST. PETERSBURG, FLORIDA 33701
(Former name or former address, if changed since last report)
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CURRENT REPORT ON FORM 8-K
ELECTRO ENERGY INC.
JUNE 7, 2004
ITEMS 1 AND 5. CHANGES IN CONTROL OF REGISTRANT AND OTHER EVENTS AND REGULATION
FD DISCLOSURE.
Effective June 7, 2004, MCG Diversified, Inc., a Florida corporation,
completed a reverse merger transaction, in which it caused EEI Acquisition
Corp., a Delaware corporation and newly-created, wholly-owned subsidiary of MCG
Diversified, to be merged with and into Electro Energy Inc., a Delaware
corporation engaged in the business of developing, manufacturing and
commercializing high-powered, rechargeable bipolar nickel metal hydride
batteries for use in a wide range of applications, including military
communications, satellites, aircraft auxiliary power, medical applications,
hybrid electric vehicles, cordless power tools and electric bikes and scooters.
As a result of the merger, Electro Energy will continue as a wholly-owned
subsidiary of MCG Diversified, and Electro Energy's former security holders will
acquire a majority of the outstanding shares of common stock, par value $.001
per share, of MCG Diversified. The reverse merger was consummated under Delaware
law and pursuant to an Agreement of Merger and Plan of Reorganization, dated May
7, 2004 (the "Merger Agreement"), among the parties. Concurrently with the
closing of the reverse merger, MCG Diversified completed a private placement of
shares of its series A convertible preferred stock and warrants to purchase
shares of its common stock to accredited investors, and received gross proceeds
of $3,001,132.19 at the initial closing of the private placement.
Immediately following the closing of the reverse merger, MCG Diversified
effected a change in the name of the company from MCG Diversified to Electro
Energy Inc. The corporate name change had been approved by the board of
directors and the holders of a majority of the outstanding shares of common
stock of MCG Diversified prior to and as part of the closing of the reverse
merger.
Pursuant to the Merger Agreement, at closing, MCG Diversified issued
9,500,000 shares of its common stock to the former security holders of Electro
Energy, representing 70.9% of the outstanding MCG Diversified common stock
following the merger, in exchange for 100% of the outstanding capital stock of
Electro Energy. The consideration issued in the merger was determined as a
result of arm's-length negotiation between the parties.
MCG Diversified assumed all of Electro Energy's obligations under the
Electro Energy 1993 Stock Compensation Plan. At the time of the merger, Electro
Energy had outstanding stock options to purchase 2,232,121 shares of common
stock, which outstanding options were amended by action of Electro Energy's
Board of Directors after the closing of the reverse merger to become stock
options to purchase shares of common stock of MCG Diversified. In addition, all
outstanding warrants issued by Electro Energy prior to the merger to purchase
shares of Electro Energy common stock were amended to become MCG Diversified
warrants to purchase common stock of MCG Diversified on the same terms and
conditions as those warrants issued by Electro Energy. At the closing of the
merger, all outstanding Electro Energy warrants were exercisable for 526,444
shares of Electro Energy common stock, and were amended to become warrants to
purchase a like number of shares of MCG Diversified common stock.
In connection with the merger, MCG Diversified completed an initial closing
of a private placement of 3,001 units, each unit consisting of one share of MCG
Diversified's series A convertible preferred stock, par value $.001 per share,
and a detachable warrant to purchase shares of common stock, at a purchase price
of $1,000 per unit, to accredited investors pursuant to the terms of a
Confidential
Private Placement Memorandum, dated April 8, 2004, as supplemented. Each
share of series A preferred stock is initially convertible into 400 shares of
common stock at any time. The warrants entitle the holder to purchase 200 shares
of common stock at an exercise price of $2.50 per share through June 7, 2007.
Gross proceeds to MCG Diversified from the initial closing of the private
placement were $3,001,132.19, inclusive of $61,000 of transaction fees and
expenses which were converted at the closing into units in the private
placement.
After the closing of the merger and the initial closing of the private
placement, MCG Diversified had outstanding 12,197,561 shares of common stock,
3,001 shares of series A convertible preferred stock (which are convertible into
1,200,400 shares of common stock at any time), warrants to purchase 1,589,294
shares of common stock, and stock options to purchase 2,232,121 shares of common
stock.
The shares of MCG Diversified common stock issued to former holders of
Electro Energy common stock in connection with the merger, and the shares of MCG
Diversified series A convertible preferred stock and warrants, and common stock
underlying those warrants, issued in the private placement were not registered
under the Securities Act of 1933, and therefore may not be offered or sold in
the United States absent registration or an applicable exemption from
registration requirements. Certificates representing these securities contain a
legend stating the same.
Pursuant to the Merger Agreement, at the closing of the merger, Martin G.
Klein, Michael D. Eskra, Joseph Engelberger, Warren D. Bagatelle and Farhad
Assari were appointed to the board of directors of MCG Diversified to serve
until the next annual meeting of stockholders. In connection with the
appointment of these five directors, at the closing of the merger, Marguerite
Godels, Laura L. Larsen, Brian Bell, Dale Salmon and Jay D. Solomon, the sole
members of the board of directors of MCG Diversified prior to the merger,
resigned as directors of MCG Diversified. In addition, at the closing of the
merger, the board of directors appointed Mr. Klein as Chief Executive Officer,
Mr. Eskra as President and Chief Operating Officer, and Audra J. Mace as Chief
Financial Officer, of MCG Diversified.
The merger is being accounted for as a reverse merger, since the
stockholders of Electro Energy own a majority of the outstanding shares of
common stock of MCG Diversified immediately following the merger. MCG
Diversified intends to carry on Electro Energy's business as a wholly-owned
subsidiary. MCG Diversified has relocated its executive offices to those of EEI
at 30 Shelter Rock Road, Danbury, Connecticut 06841, and its telephone number is
(203) 797-2699.
Electro Energy is filing this Current Report on Form 8-K for the purpose of
providing summary information regarding the merger and the private placement.
Electro Energy expects to file a more complete Form 8-K setting forth the
information required by Items 1, 2, 4, 5, 7 and 8 of that Form within the time
periods permitted by Form 8-K. In addition, MCG Diversified issued a press
release announcing the merger and the private placement. A copy of the press
release is filed as an exhibit to this Report.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
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Exhibit No. Description
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99.1 Press Release issued by MCG Diversified, Inc. on June 9, 2004.
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: June 10, 2004 ELECTRO ENERGY INC.
By: /s/Martin G. Klein
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Martin G. Klein
Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release issued by MCG Diversified, Inc. on June 9, 2004.