SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS
Item 1.01 Entry Into A Material Definitive Agreement
Effective September 28, 2009, our board approved an agreement with HzO Inc. under which we have acquired certain exclusive worldwide marketing rights to consumer electronics applications of HzO’s “Golden Shellback(TM)” technology, now referred
to as HzO - technology. The HzO technology is a unique molecular coating process that protects consumer electronics against damage caused by water and moisture exposure.
The HzO technology used for consumer electronics produces a vacuum deposited film that is water repellent, nonflammable, has low toxicity, and allows for electricity conduction under the thin film coating. When applied to clean, moisture free surfaces such as plastic, metal, or glass, the coating is transparent with excellent water repellence
and anti-corrosion properties. The coating also has an excellent ability to repel oils, synthetic fluids, hazardous materials, dust, dirt, and water based solutions.
In addition to the exclusive worldwide marketing rights to the HzO technology in the consumer electronics market, we have also secured a right of first refusal on opportunities to market the HzO – technology to markets other than consumer electronics.
We have purchased a convertible promissory note from HzO in the principal amount of $1.15 million, with the further contingent opportunity to invest as much as $3.15 million in total by February 2010. If we were to invest the full $3.15 million, we would receive on an as converted, fully diluted basis, 6,628,787 shares of HzO
Series A Preferred stock, equivalent to a 13.3% stake in the total capitalization of HzO. In addition, we received a warrant to purchase an additional 345,000 shares of Series A Preferred Stock and, should we invest the additional $2.0 million, we would also receive a second warrant to purchase an additional 600,000 shares of Series A Preferred Stock.
At present, the sole officer of HzO is Robert G. Pedersen, II, who is also our CEO, President and Chairman of our board of directors. The board of directors of HzO consists of Mr. Pedersen, Larry Harmer and Ed Ekstrom, each of whom are also members of our board of directors.
Both our board of directors and the Board of HzO Inc. approved grants of HzO common stock to each of Mr. Pedersen, Mr. Harmer, Mr. Ekstrom and Brandon O’Brien, our CFO, per the transaction agreements and based upon a full syndication of the outstanding capital formation for the available Series A preferred stock of HzO.
The foregoing summary description of the transaction is qualified in its entirety by the definitive transaction documents attached hereto as exhibits.
SECTION 7– Regulation FD
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Item 7.01 |
Regulation FD Disclosure |
On September 29, 2009, we issued the press release attached hereto as Exhibit 99.1 to this Current Report.
The information in this Item 7.01 of Form 8-K is “furnished” and not “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act of 1934, except
as expressly set forth by specific reference in such filing.
SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
9.01 Financial Statements and Exhibits