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
February 1, 2002 000-32657
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Date of Report Commission File Number
(Date of earliest event reported)
ELEKTRYON
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(Exact name of registrant as specified in its charter)
Nevada 88-0353324
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(State or Other jurisdiction (I.R.S. Employer
or organization) Identification Number)
6565 Spencer Street, Suite 206
Las Vegas, NV 89119
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(Address of Principal Executive Offices) (Zip Code)
(702)361-1719
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(Registrant's telephone number, including area code)
Item 3. BANKRUPTCY OR RECEIVERSHIP.
On February 1, 2002, Elektryon filed a voluntary petition under Chapter 11 of
the Title 11, United States Code, in the United States Bankruptcy Court for the
District of Nevada (the "Bankruptcy Court"). Elektryon remains in possession of
its assets and properties as debtor-in-possession. On February 11, 2002,
Elektryon sent a letter to its shareholders, a copy of which is attached hereto
as Exhibit 99.1 and incorporated by reference herein, announcing the Chapter 11
filing and notifying the shareholders that Elektryon will seek approval by the
Bankruptcy Court of the sale of substantially all of its assets to Ocean Power
Corporation, a Delaware corporation ("Ocean Power"). The proposed terms of that
transaction are described more fully below. See "Item 5. Other Events."
Item 5. OTHER EVENTS.
On January 29, 2002, Elektryon and Ocean Power signed an Asset Purchase Term
Sheet pursuant to which Ocean Power will, subject to conditions set forth in the
Asset Purchase Term Sheet, acquire certain of Elektryon's assets, including
rights to the 100kW Powr/Mastr product line. The term sheet extends Ocean
Power's existing exclusive license to the Powr/Mastr product outside the United
States and nonexclusive license within the United States through the period
necessary to complete a definitive Asset Purchase Agreement, obtain a fairness
opinion from Ocean Power's investment banker and obtain satisfaction of all
other conditions of sale.
The price for the purchase will be paid in shares of common stock of Ocean Power
("Ocean Power Common Stock") as follows: (1) $7,000,000 in Ocean Power Common
Stock (at the 20 day average price at the time of closing or $2.00 per share,
whichever is higher) upon final transfer of Elektryon's assets subject to the
agreement to Ocean Power, (2) $8,000,000 in Ocean Power Common Stock (at the 20
day average price prior to achieving this milestone or $4.00 per share,
whichever is higher) when the Powr/Mastr product achieves 10,000 hours of
continuous, failure-free operation or when Ocean Power achieves $6,250,000 of
sales over a three month period with a minimum gross margin of 30%, whichever
comes first, and (3) $10,000,000 of Ocean Power Common Stock (at the 20 day
average price prior to achieving this milestone or $6.00 per share, whichever is
higher) when the Powr/Mastr product meets certain applicable regulatory
requirements. The purchase is subject to the satisfaction of certain other
conditions set forth in the Asset Purchase Term Sheet, including approval by the
Boards of Directors of the respective companies, a fairness opinion from Ocean
Power's investment banker and court approval of the purchase as part of a
Chapter 11 plan of reorganization of Elektryon.
Pursuant to the Asset Purchase Term Sheet, Ocean Power will issue (a) an option
to purchase 300,000 shares of Ocean Power Common Stock to Michael E. Holmstrom,
the President and Chief Financial Officer of Elektryon, and (b) an option to
purchase 250,000 shares of Ocean Power Common Stock to Joanne Firstenberg, the
General Counsel of Elektryon. The options will (i) have an exercise price of
$0.50 per share of Ocean Power Common Stock, (ii) vest on January 1, 2003, and
(iii) be exercisable for four years.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) and (b) None
(c) Exhibit 99.1 Letter to Shareholders of Elektryon dated February 11, 2002
Exhibit 99.2 Term Sheet, dated January 29, 2002, between Ocean Power
Corporation and Elektryon
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: February 28, 2002 ELEKTRYON
By: /s/ Michael E. Holmstrom
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Michael E. Holmstrom
President