UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 31, 2014
SOLAR3D, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
000-49805 01-0592299
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(Commission File Number) (I.R.S. Employer Identification No.)
26 WEST MISSION AVENUE, SUITE 8 , SANTA BARBARA, CALIFORNIA 93101
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(Address of principal executive offices) (Zip Code)
(805) 690-9000
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
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.
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR240.14d-2(b))
[_] Soliciting material pursuant to Rule 14a-12 under Exchange Act (17
CFR240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR240.13e-4(c))
SECTION 1. REGISTRANT'S BUSINESS AND OPERATIONS
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Effective on January 31, 2104, Solar3D, Inc., a Delaware corporation
("S3D" or the "Company"), borrowed $1,250,000 from two accredited investors
("Investors") in order to finance the Company's acquisition of Solar United
Networks, Inc., a California corporation ("SUN"). The loan is evidenced by two
promissory notes bearing simple interest at the rate of 10% per annum, payable
in full on or before October 31, 2014 unless the maturity date is extended in
the sole discretion of the Investors until January 31, 2015, and convertible
into shares of the Company's common stock at a rate equal to the lesser of $0.05
per share or 50% of the lowest trade price recorded on any trade date after
January 31, 2014 prior to the conversion of the promissory notes.
SECTION 2. FINANCIAL INFORMATION
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ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On January 31, 2014, S3D closed the stock purchase agreement, dated as
of October 31, 2013 ("SPA"), with SUN, and Emil Beitpolous, an individual
shareholder holding 30% of the outstanding shares of SUN, Abe Emard, an
individual shareholder holding 30% of the outstanding shares of SUN, Richard
Emard, an individual shareholder holding 20% of the outstanding shares of SUN,
and Mikhail Podnebesnyy, an individual shareholder holding 20% of the
outstanding shares of SUN (collectively, the "Sellers" or "SUN Shareholders"),
pursuant to which S3D purchased 100% of the outstanding shares of SUN's common
stock (the "SUN Stock") from the Sellers. The purchase price is $2,794,500,
$1,044,500 of which was paid in cash at the closing of the SPA and $1,750,000 of
which is payable in installments over a period of five years after the closing
of the SPA pursuant to convertible promissory notes bearing simple interest at
the rate of 4% per annum (the "Notes"). The Notes are convertible at any time
after issuance into shares of fully paid and non-assessable shares of the common
stock of S3D. The conversion price is $0.02 per share until March 30, 2015, and
thereafter the conversion price will be the greater of (a) $0.02 per share or
(b) 50% of the average closing price of the common stock of S3D as reported by
Bloomberg for the ten (10) consecutive trading days following the submission of
a notice in writing signed by the Noteholder of his intent to convert.
Prior to the closing of the SPA on January 31, 2014, the Company, SUN,
and the Sellers amended the SPA in order to clarify the method for determining
the amount of the one-time tax distribution to be made to the shareholders of
SUN before or after the closing of the SPA (the "Amendment"). A copy of the
Amendment is attached to this Report on Form 8-K as Exhibit 10.1.
Effective as of the closing of the SPA the board of directors of SUN
consists of three members, James B. Nelson, Mark J. Richardson, and Abe Emard.
James B. Nelson and Mark J. Richardson are also directors of S3D. See Item 5.02
of this Report on Form 8-K for additional information regarding Abe Emard.
SUN is headquartered in a 6,000 square foot facility in Roseville,
California, at 1358 Blue Oaks Boulevard Suite 300. SUN is engaged in the
business of the design, installation, and management of solar systems for
commercial, agricultural, and residential customers in California. SUN designs,
finances, and installs systems ranging in size from 2KW (kilowatt) for
residential loads to multi MW (megawatt) systems for larger commercial projects.
SUN provides the following systems:
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ROOF-MOUNTED SYSTEMS. SUN roof mounted solar systems range from small
2KW systems to large megawatt systems. The solar panels are lightweight and can
be installed on any roof style. Roof mounted systems come with up to a 25 year
production warranty.
GROUND-MOUNTED SYSTEMS. A ground-mounted solar system is an alternative
for owners who have roof issues or open property. Ground-mounted systems are
designed to make the most of the available space and sunlight while remaining
easy to maintain. These systems are designed to withstand all wind up-lift
zoning requirements and come with a 25 year production warranty.
POST-MOUNTED SYSTEMS. Pole-mounted solar systems allow for homes,
farms, or businesses to generate electricity in highly-visible and efficient
locations without shading or directional issues. Pole-mount systems are placed
on a fixed platform and positioned to capture optimal sunlight. Unlike
roof-mounted systems, a pole-mount solar system does not involve any building
attachment and is a highly-beneficial low cost option to owners with minimal
roof or land space.
CARPORT SYSTEMS. A carport or trellis solar system is a viable solution
for the residential or commercial business owner that is looking to take
advantage of solar power without sacrificing valuable parking, or large portions
of expensive real estate. New carport or trellis structures can be custom built
or existing carports can be modified to provide shaded or covered parking.
Custom-designed solar carport or trellis systems require virtually no
maintenance and allow the panels to be positioned for optimal energy production.
TILTED SINGLE AXIS TRACKERS. Tilted single axis trackers offer optimal
efficiency and solar tracking capabilities by tracking the sun throughout the
day. The motors in the single axis trackers move with the earth's orbit allowing
20% more power to be captured than a fixed solar array.
DUEL AXIS TRACKERS. A SUN dual-axis tracker can produce 30% more
electricity than stationary solar arrays. This is achieved since the array
follows the daily movement of the sun from east to west, as well as its change
in altitude through the seasons. Although the initial cost of a dual axis
tracking system can be higher than a stationary system, the dual axis tracker
produces more electricity making it possible to use fewer panels to provide the
same amount of electricity. Dual axis trackers can also be a viable solution for
property owners that would prefer not to cover large portions of their land with
ground mounted solar arrays.
SOLAR PERFORMANCE ASSESSMENTS. A Solar Energy Performance Assessment
("EPA") is SUN's version of an energy audit. This is the first step to assess
how much energy a home or business consumes and to evaluate what measures can be
taken to make the home or business more energy efficient, by performing a room
by room examination of a structure as well as a thorough examination of past
utility bills. By taking this step, customers can make additional changes to
reduce energy usage and reduce the necessary size of the solar system. SUN's EPA
uses building science to help SUN evaluate and create a comprehensive plan that
will increase energy efficiency and comfort, lower utility bills, reduce carbon
footprint, improve the indoor air quality, and extend the structure's
durability.
MAINTENANCE AND PERFORMANCE PACKAGES: SUN offers maintenance care
packages which include system cleanings and maintenance inspections. SUN also
offers performance packages which include complete system monitoring,
performance guarantees, warranties, and cleanings.
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SECTION 5. CORPORATE GOVERNANCE AND MANAGEMENT
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ITEM 5.02. DEPARTURE OF DIRECTORS AND CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS
GENERAL. On January 31, 2014, James B. Nelson, Mark J. Richardson, and
Abe Emard were appointed as the directors of SUN.
Effective as of January 31, 2014 and pursuant to the terms of the SPA,
Abe Emard, Emil Beitpolous, and Mikhail Podnebesnyy will remain employees of SUN
for three years. Mr. Emard is the chief executive officer of SUN. Emil
Beitpolous is the president of SUN. Mikhail Podnebesnyy is the vice president of
SUN.
COMPENSATION ARRANGEMENTS. There have been no changes to Mr. Nelson's
compensation or Mr. Richardson's compensation as a result of their appointments
as directors of SUN.
Effective as of February 1, 2014, SUN entered into an at-will
employment agreement with Abe Emard pursuant to which Mr. Emard will serve as
the chief executive officer of SUN in consideration for annual compensation in
the amount of $100,000. Mr. Emard may be paid a bonus or bonuses during each
year in cash or in Company or SUN common stock or common stock options, as
determined in the discretion of SUN's board of directors or the Company's board
of directors. During the 24 months following Mr. Emard's termination with SUN
for any reason, Mr. Emard may not interfere with any of SUN's contractual or
business relationships or solicit or induce any employee of SUN to terminate
such employee's relationship with SUN. Pursuant to the terms of the SPA, in the
event (a) Mr. Emard voluntarily resigns as an employee of SUN, unless due to
death, a disability rendering Mr. Emard unable to work, or a constructive
termination of Mr. Emard's employment, or (b) Mr. Emard is involuntarily
terminated as an employee of SUN for cause, the Company will have the sole
right, exercisable at any time within one year after such termination, to cause
an immediate conversion of the outstanding balance of Mr. Emard's Note into
shares of the Company's common stock; provided, that all common stock issued to
Mr. Emard pursuant to such a conversion will be subject to a two year lock-up
period.
Effective as of February 1, 2014, SUN entered into an at-will
employment agreement with Emil Beitpolous pursuant to which Mr. Beitpolous will
serve as the president of SUN in consideration for annual compensation in the
amount of $100,000. Mr. Beitpolous may be paid a bonus or bonuses during each
year in cash or in Company or SUN common stock or common stock options, as
determined in the discretion of SUN's board of directors or the Company's board
of directors. During the 24 months following Mr. Beitpolous's termination with
SUN for any reason, Mr. Beitpolous may not interfere with any of SUN's
contractual or business relationships or solicit or induce any employee of SUN
to terminate such employee's relationship with SUN. Pursuant to the terms of the
SPA, in the event (a) Mr. Beitpolous voluntarily resigns as an employee of SUN,
unless due to death, a disability rendering Mr. Beitpolous unable to work, or a
constructive termination of Mr. Beitpolous's employment, or (b) Mr. Beitpolous
is involuntarily terminated as an employee of SUN for cause, the Company will
have the sole right, exercisable at any time within one year after such
termination, to cause an immediate conversion of the outstanding balance of Mr.
Beitpolous's Note into shares of the Company's common stock; provided, that all
common stock issued to Mr. Beitpolous pursuant to such a conversion will be
subject to a two year lock-up period.
Effective as of February 1, 2014, SUN entered into an at-will
employment agreement with Mikhail Podnebesnyy pursuant to which Mr. Podnebesnyy
will serve as the vice president of SUN in consideration for annual compensation
in the amount of $100,000. Mr. Podnebesnyy may be paid a bonus or bonuses during
each year in cash or in Company or SUN common stock or common stock options, as
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determined in the discretion of SUN's board of directors or the Company's board
of directors. During the 24 months following Mr. Podnebesnyy's termination with
SUN for any reason, Mr. Podnebesnyy may not interfere with any of SUN's
contractual or business relationships or solicit or induce any employee of SUN
to terminate such employee's relationship with SUN. Pursuant to the terms of the
SPA, in the event (a) Mr. Podnebesnyy voluntarily resigns as an employee of SUN,
unless due to death, a disability rendering Mr. Podnebesnyy unable to work, or a
constructive termination of Mr. Podnebesnyy's employment, or (b) Mr. Podnebesnyy
is involuntarily terminated as an employee of SUN for cause, the Company will
have the sole right, exercisable at any time within one year after such
termination, to cause an immediate conversion of the outstanding balance of Mr.
Podnebesnyy's Note into shares of the Company's common stock; provided, that all
common stock issued to Mr. Podnebesnyy pursuant to such a conversion will be
subject to a two year lock-up period.
BIOGRAPHICAL INFORMATION.
ABE EMARD, age 36, has been the chief executive officer of SUN since he
co-founded the company in February 2011. From 2000 until co-founding SUN, Mr.
Emard worked for Emard Electric, Inc. as its Project Manager, Vice President and
Business Development Officer. Mr. Emard holds a construction management degree
from the University of California at Davis extension program and a Journeyman
State Certified License. He is a certified installer for Canadian Solar, Sharp,
AE Solaron, and PV Powered.
EMIL BEITPOLOUS, age 35, has been the president of SUN since February
2011. From October 2009 until joining SUN, Mr. Beitpolous worked for Emard
Electric, Inc. as its general superintendent where he was responsible for all
solar field crews of up to 25 employees, project management of all commercial
projects, recruitment of all field employees of the company's solar division,
project budgeting and forecasting, and strategy for all field operations. From
2007 to September 2009, he was the solar superintendent of Rayco Electric, Inc.
where he was responsible for all aspects of photovoltaic installation and
performing quality inspections on system drawing and installed systems. He
received his WECA IEC Journeyman Training Certification in 2009 and a California
State License Board General B License in 2004.
MIKHAIL PODNEBESNYY, age 34, has been the vice president of SUN since
February, 2011. From 2001 until joining SUN, Mr. Podnesbesnyy worked for Emard
Electric, Inc. in various capacities, including photovoltaic design from 2009 to
2011, pre-fabrication manager from 2007 to 2009, job foreman from 2002 to 2007,
and journeyman electrician from 2001 to 2002. He is a certified journeyman
electrician and has received WECA certified photovoltaic training, and various
module manufacturer, inverter, and racking training.
SECTION 8. OTHER EVENTS
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ITEM 8.01. OTHER EVENTS.
Effective February 5, 2014, James B. Nelson, the Company's chairman,
chief executive officer, chief financial officer and corporate secretary adopted
a Rule 10b5-1 Trading Plan (the "Plan") covering up to 4,000,000 shares of the
Company's common stock (the "Performance Shares") eligible for vesting and
issuance to Mr. Nelson pursuant to his Restricted Stock Agreement, dated
September 23, 2013 (the "Agreement"), with the Company, which vests shares of
common stock only upon the achievement of specified performance milestones. The
performance milestones for the Performance Shares have been achieved. The
Company's Board of Directors approved the adoption of the Plan on January 31,
2014. These Performance Shares are expected to be issued to Mr. Nelson by the
Company in monthly increments commencing on February 3, 2014 in accordance with
the terms and conditions of the Agreement. In accordance with Section 2.2 of the
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Agreement, the Performance Shares will vest and be issued to Mr. Nelson on a
monthly basis, based on the following formula:
Monthly Number of 5% x Prior Monthly Trade Value
Vested Performance Shares = ---------------------------------------------------
Fair Market Value of the Company's common stock
The Monthly Trade Value of the Company's shares of common stock is
defined as the aggregate sum of the Daily Trade Value in a calendar month. The
Daily Trade Value is defined as the closing trade price of the Company's shares
of common stock multiplied by the daily trade volume. For example, if the
closing trade price was $1.00 and the daily trade volume on that day was 500,000
shares, then the Daily Trade Value for that day would be $500,000. Fair Market
Value is defined as the average of the trailing ten (10) closing trade prices of
the Company's common stock as quoted on the public securities trading market on
which the Company's common stock is then traded. If the Prior Monthly Trade
Value is less than $50,000, then no Performance Shares will vest for that month.
The monthly vested Performance Shares, if any, will be issued to Mr. Nelson
within five (5) business days after the last day of each month.
SECTION 9. FINANCIAL STATEMENTS, PRO FORMA FINANCIALS & EXHIBITS
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(d) Exhibits
10.1 Addendum to Stock Purchase Agreement by and among
Solar United Network, Inc., Emil Beitpolous, Abe
Emard, Richard Emard, Mikhail Podnesbesnyy, and
Solar3D, Inc., dated January 31, 2014.
SIGNATURES
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, thereunto duly authorized.
SOLAR3D, INC.
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(Registrant)
Date: January 31, 2014
/s/ James B. Nelson
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James B. Nelson, Chief Executive Officer
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