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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): SEPTEMBER 24, 2001
METRETEK TECHNOLOGIES, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 0-19793 84-11698358
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(State or other jurisdiction (Commission File Number) (I.R.S Employer
of incorporation) Identification No.)
600 17TH STREET, SUITE 800 NORTH, DENVER, COLORADO 80202
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 416-9200
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On September 24, 2001, Southern Flow Companies, Inc., a Delaware
corporation ("Southern Flow"), which is a wholly-owned subsidiary of Metretek
Technologies, Inc., a Delaware corporation (the "Company"), entered into a
Credit and Security Agreement (the "Credit Agreement") with Wells Fargo Business
Credit, Inc., a Minnesota corporation (the "Lender"), providing for a $2,000,000
credit facility (the "Credit Facility"). Amounts borrowed under the Credit
Facility bear interest at prime plus one percent. The Credit Facility contains
minimum interest charges and unused credit line and termination fees, and
matures on September 30, 2004. The Credit Facility refinances the Company's
prior credit facility with National Bank of Canada, a Canadian chartered bank.
The obligations of Southern Flow under the Credit Agreement have been
guaranteed by the Company along with two other wholly-owned subsidiaries of the
Company: PowerSecure, Inc., a Delaware corporation ("PowerSecure"), and
Metretek, Incorporated, a Florida corporation ("Metretek Florida")
(collectively, the "Guarantors"). These guarantees have been secured by a
guaranty agreement ("Guaranty") and a security agreement ("Security Agreement")
entered into by each of the Guarantors. The Security Agreements grant to the
Lender a first priority security interest in virtually all of the assets of each
of the Guarantors. The Credit Facility is further secured by a first priority
security interest in virtually all of the assets of Southern Flow.
The Credit Agreement contains financial covenants by Southern Flow to
maintain a minimum tangible net book value, minimum quarterly and annual net
income levels and maximum capital expenditures through 2002. Thereafter, the
Lender and Southern Flow must renegotiate the terms of those financial
covenants. The Credit Agreement contains other standard covenants related to
Southern Flow's operations, including prohibitions on the payment of dividends,
the sale of assets and other corporate transactions by Southern Flow, without
the Lender's consent.
Borrowings under the Credit Facility are limited to a borrowing base
consisting of the sum of 85% of Southern Flow's eligible accounts receivable
plus the lesser of 20% of Southern Flow's eligible inventory (consisting
primarily of raw materials and finished goods inventory) or $200,000. As of
September 30, 2001, Southern Flow had a borrowing base of $1,802,038 under the
Credit Facility, of which $1,186,532 had been borrowed, leaving $615,506 in
unused Credit Facility availability.
Southern Flow is permitted to advance funds under the Credit Facility
to the Company, PowerSecure and Metretek Florida, provided that total
inter-company indebtedness owing from all Guarantors to Southern Flow may not
exceed the greater of the amount of the borrowing base less $150,000 or the
cumulative net income of Southern Flow from January 1, 2001. The Credit
Facility, which constitutes the Company's primary credit agreement, is expected
to be used primarily to fund the operations and growth of PowerSecure, as well
as the operations of Southern Flow and Metretek Florida.
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Based on the current plans and assumption, management believes that the
Company's capital resources, including cash and cash equivalents, amounts
available under the Credit Facility and funds generated from continuing
operations will be sufficient to meet its anticipated cash needs over the next
twelve months. However, unanticipated events, over which the Company would have
no control, could increase its operating costs or decrease its ability to
generate revenues. In addition, the Company will require additional capital in
the future in order to make any significant acquisition of business or
technologies or significant expansion of its business.
While the Credit Facility will restrict the ability of the Company to
sell or finance its subsidiaries without the consent of the Lender, in the event
that the Company is able to secure debt or equity financing for a subsidiary
that is a Guarantor or the sale or merger of such subsidiary and such subsidiary
repays all advances made to it by Southern Flow, then the Lender has agreed to
terminate the applicable restrictions in the Credit Facility relating to such
subsidiary as a Guarantor.
The foregoing description of the Credit Facility, including the Credit
Agreement, the Guaranties and the Security Agreements, is qualified in its
entirety by reference to the text of such agreements, which are attached as
exhibits hereto and incorporated herein by this reference.
This Form 8-K contains forward-looking statements within the meaning of
and made under the safe harbor provisions of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements are all statements other than statements of
historical facts, including but not limited to statements concerning
management's plans, objectives, goals, strategies, hopes and beliefs about the
Company's ability to refinance or otherwise pay off the credit facility and to
raise additional capital. These forward-looking statements are based on the
current plans, intentions, goals, strategies, type, beliefs and expectations of
management as well as assumptions made by and information currently available to
management. You are cautioned not to place undue reliance on these
forward-looking statements. Forward-looking statements are not guarantees of
future performance or events, but are subject to and qualified by a number of
known and unknown risks, uncertainties and other factors that could cause actual
results to differ materially from those express or implied by the
forward-looking statements. These risks, uncertainties and other factors
include, but are not limited to, the risks and uncertainties that are discussed
in this report or that are discussed from time to time in the Company's other
reports and filings with the Securities Exchange Commission, including but not
limited to the Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2000 and the Company's Form 10-QSB for the quarter ended June 30,
2001. The Company does not intend, and it undertakes no duty or obligation, to
update or revise any forward-looking statements for any reason, whether as the
result of new information, future events or otherwise.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
10.1 Credit and Security Agreement, dated as of September
24, 2001, by and between Wells Fargo Business Credit,
Inc. and Southern Flow Companies, Inc.
10.2 Form of Guaranty, dated as of September 24, 2001, by
each of Metretek Technologies, Inc., PowerSecure,
Inc. and Metretek, Incorporated for the benefit of
Wells Fargo Business Credit, Inc.
10.3 Form of Security Agreement, dated as of September 24,
2001, between Wells Fargo Business Credit, Inc. and
each of Metretek Technologies, Inc., PowerSecure,
Inc. and Metretek, Incorporated.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
METRETEK TECHNOLOGIES, INC.
By: /s/ W. PHILLIP MARCUM
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W. Phillip Marcum
President and Chief Executive Officer
Dated: October 2, 2001
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METRETEK TECHNOLOGIES, INC.
FORM 8-K
DATED SEPTEMBER 24, 2001
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
10.1 Credit and Security Agreement, dated as of September
24, 2001, by and between Wells Fargo Business Credit,
Inc. and Southern Flow Companies, Inc.
10.2 Form of Guaranty, dated as of September 24, 2001, by
each of Metretek Technologies, Inc., PowerSecure,
Inc. and Metretek, Incorporated for the benefit of
Wells Fargo Business Credit, Inc.
10.3 Form of Security Agreement, dated as of September 24,
2001, between Wells Fargo Business Credit, Inc. and
each of Metretek Technologies, Inc., PowerSecure,
Inc. and Metretek, Incorporated.
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