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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 15, 2005 (June 9, 2005)
WESTERN POWER & EQUIPMENT CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 0-26230 91-1688446
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
6407-B N.E. 117th Avenue, Vancouver, WA 98662
(Address of principal executive offices, including zip code)
(360) 253-2346
(Registrant's telephone number, including area code)
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 communication 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))
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FORWARD-LOOKING STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:
This Current Report contains forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance, and underlying assumptions and other statements that are
other than statements of historical facts. These statements are subject to
uncertainties and risks including, but not limited to, demand and acceptance of
services, changes in governmental policies and regulations applicable to the
mining industry, economic conditions, the impact of competition and pricing, and
other risks defined in this document and in statements filed from time to time
with the Securities and Exchange Commission by Western Power & Equipment Corp.
(the "Company"). All readers are encouraged to review this Current Report. All
such forward-looking statements, whether written or oral, and whether made by or
on behalf of the Company, are expressly qualified by the cautionary statements
and any other cautionary statements which may accompany the forward-looking
statements. In addition, the Company disclaims any obligation to update any
forward-looking statements to reflect events or circumstances after the date
hereof.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
See Item 3.02 below. Prior to the entry into the Purchase Agreement (as defined
below), there was no material relationship between the Company and the several
purchasers (the "Purchasers") under the Purchase Agreement. The identity of the
Purchasers and the dollar amount of their purchases of Debentures (as
hereinafter defined) is set forth below:
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SERIES A SERIES B
SUBSCRIPTION SUBSCRIPTION
INVESTOR AMOUNT AMOUNT
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$550,000.00 $36,666.30
BLUEGRASS GROWTH FUND LP
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BLUEGRASS GROWTH FUND LTD $450,000.00 $29,999.70
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CRESTVIEW CAPITAL MASTER LLC $4,500,000.00 $299,997.00
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IROQUOIS MASTER FUND LTD $4,000,000.00 $266,664.00
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$8,500,000.00 $566,661.00
OMICRON MASTER TRUST
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SMITHFIELD FIDUCIARY LLC $8,500,000.00 $566,661.00
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CCA (US) FUND L.P., BY CRESTVIEW CAPITAL $3,500,000.00 $233,331.00
ADVISORS, LLC, ITS GENERAL PARTNER
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$30,000,000.00 $1,999,980.00
TOTAL
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ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
See Item 3.02 below. A copy of the press release announcing the transaction is
attached hereto as Exhibit 99.1.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
On June 9, 2005, the Company announced the closing of a new $32 million senior
credit facility from several institutional lenders. The facility is comprised of
$30 million of convertible debt and a $2 million term loan, both at the London
Interbank Offered Rate ("LIBOR") plus 6%.
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The Company entered into a Securities Purchase Agreement (the "Purchase
Agreement"), a form of which is attached hereto as Exhibit 4.1, with each of the
several lenders. Pursuant to the terms of the Purchase Agreement, the Company
sold $30 million in Variable Rate Secured Convertible Debentures (the "Series A
Debentures") due 60 months from the date of issuance and $2 million in Variable
Rate Secured Debentures (the "Series B Debentures" and, with the Series A
Debentures, the "Debentures") due 6 months from the date of issuance. A form of
each of the Series A Debenture and the Series B Debenture is attached hereto as
Exhibit 4.2 and Exhibit 4.3, respectively. The Series A Debentures are
convertible, at the option of the Purchasers, into shares of common stock of the
Company at a conversion price of $2.00 per share, subject to adjustment.
Purchasers of the Debentures received Series A Warrants and Series B Warrants to
purchase an aggregate of approximately 8.2 million shares of common stock of the
Company at an exercise price of $1.75 per share, subject to adjustment, for a
term of five years. A form of the Common Stock Purchase Warrant incorporating
the Series A Warrant and the Series B Warrant is attached hereto as Exhibit 4.4.
In addition, the Purchasers received Series C Warrants, a form of which is
attached hereto as Exhibit 4.5, which allow each Purchaser of Debentures the
right to purchase a number of Series A Debentures and Series A Warrants in
proportion to its initial investment in the Company. The Series C Warrants have
a term of exercise equal to the earlier of (i) the 18 months anniversary of the
effective date of the registration statement to be filed in connection with the
Purchase Agreement and (ii) June 9, 2008.
The Company has undertaken to register all the shares of common stock underlying
the Series A Debentures, the Series A Warrants and the Series B Warrants under
the Securities Act of 1933, as amended, pursuant to the Registration Rights
Agreement entered into with each of the several Purchasers, a form of which is
attached hereto as Exhibit 4.6.
The Debentures are secured by all the assets of the Company as more fully set
forth in the Security Agreement entered into with each of the several
Purchasers, a form of which is attached hereto as Exhibit 4.7.
The Company used a significant portion of the loan proceeds to repay and
terminate its credit facility and forbearance agreement with GE Commercial
Distribution Finance Corporation and the remainder of the proceeds will be used
to support its near term needs for working capital, general capital
expenditures, including sufficient working capital to initiate the build out of
the Phoenix mining facilities and other corporate requirements.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits
4.1 Securities Purchase Agreement
4.2 Variable Rate Secured Convertible Debenture
4.3 Variable Rate Secured Debenture
4.4 Common Stock Purchase Warrant
4.5 Series C Warrant
4.6 Registration Rights Agreement
4.7 Security Agreement
99.1 Press Release issued June 9, 2005
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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.
Dated: June 15, 2005
WESTERN POWER & EQUIPMENT CORP.
By: /s/ Mark J. Wright
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Name: Mark J. Wright
Title: Chief Financial Officer
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