SSPC saw people talking about the convertibles today. From the 8k here's the deal:
"ACQUISITION OR DISPOSITION OF ASSETS.
Southern States Power Company, Inc.(the "Company") is in the business of
producing Biodiesel fuel. Biodiesel fuel is produced by converting vegetable or
animal oils into a biofuel which can be blended with standard diesel fuel in an
effort to eliminate or reduce particulates and other emissions associated with
the burning of straight diesel fuels.
To that end, the Company's subsidiary, Power Acquisition Corp.
("Acquisition Corp."), entered into a contract (the "Technology Transfer
Agreement") with Green Aero Technology Inc. ("Green Aero") on April 9, 2001, to
purchase certain technology (the "Technology") and complimentary devices (the
"Device" or "Devices") developed by Green Aero for generating electrical energy
from wind drive/responsive machines, with backup generator units fueled by
Biodiesel fuel. This acquisition was made because the use of Biodiesel as an
alternative fuel in backup generators and generation of electrical energy
utilizing wind power is complimentary to the Company's business.
Acquisition Corp.'s capital structure consisted of 10,000 authorized shares
of Class A Voting Common Stock, Par Value $0.001 per share (the "Class A" or,
sometimes, the "Class A Common"), and 1,000 authorized shares of Class B
NonVoting Common Stock, Par Value $0.001 per share (the "Class B" or, sometimes,
the "Class B NonVoting Common"), with 90 shares of the Class A issued and
outstanding and held by the Company, and with 10 shares of the Class B issued
and outstanding and held by Green Aero, as is explained in the succeeding
paragraph.
Pursuant to the Technology Transfer Agreement, (a) Acquisition Corp. will
pay to Green Aero the sum of $150,000.00; (b) Acquisition Corp. will pay to
Green Aero a royalty equal to 5% of gross revenues attributable to sales,
leases, joint ventures with respect to, and all other dispositions of the
Devices or of the Technology to third-parties; and (c) Acquisition Corp. issued
and delivered to Green Aero the 10 shares of Class B NonVoting referred to in
the preceding paragraph.
To fund the acquisition of the Device and the Technology, on April 3, 2001,
Acquisition Corp. issued its 8% Series A $1,000,000.00 Senior Subordinated
Convertible Redeemable Debentures due April 3, 2003 (the "Acquisition Corp.
Debentures"), together with underlying shares of Acquisition Corp.'s Class A
Common Stock, Par Value $0.001, into which the Acquisition Corp. Debentures may
be convertible from time to time.
After deducting the expenses of the investment, including projected
interest payments, the net proceeds to be received by Acquisition Corp. will
aggregate approximately $795,000.00. The first installment of proceeds was
received on April 6, 2000; the second has yet to be received. From these net
proceeds, (a) $150,000.00 will be used to acquire the Technology; (b)
$150,000.00 will be used as working capital to develop the Technology; (c)
$150,000.00 will be used to develop a prototype; and (d) $345,00.00 will be used
to develop and construct the Biodiesel Plant.
Following the acquisition of the Device and the Green Aero Technology by
Acquisition Corp., on April 11, 2001, Acquisition Corp. was merged into the
Company. Pursuant to the Merger, and by operation of law, the rights
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and obligations of Acquisition Corp. with respect to all entities would inure to
the benefit of and be binding upon the Company. Consequently, as a result of the
Merger,
(a) the rights and obligations of Acquisition Corp. with respect to the
Technology Transfer Agreement will inure to the benefit of and be binding upon
the Company;
(b) all of the issued and outstanding shares of the Class A Common Stock of
Acquisition Corp. (i.e., 90 shares) were surrendered to and canceled by the
Company;
(c) all of the issued and outstanding shares of the Class B NonVoting
Common Stock (i.e., 10 shares) held by Green Aero were surrendered to and
exchanged by the Company for 4,000,000 shares of Common Stock, Par Value $0.001
per share, of the Company, which shares of the Company will now be owned by
Green Aero; and
(d) the Acquisition Corp. Debentures, together with the underlying shares
of Acquisition Corp.'s common stock, Par Value $0.001 per share, into which the
Acquisition Corp. Debentures were convertible from time to time, were converted
into identical debentures of the Company (the "the Company Debentures"),
together shares of underlying common stock, Par Value $0.001 per share, of the
Company into which the Company Debentures may be converted.
As is the case when any Convertible Debentures are issued, it can be
anticipated that the holder thereof will seek repayment via a conversion of debt
to equity, and that, accordingly, most of the debt evidenced by the Debentures
will be converted into shares of the Company, a substantial amount which will
then be sold in the open market. This could have a depressing effect on the
price of shares of the Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
Exhibit No. Item
2. Plan of Merger between Power Acquisition Corp., and
Southern States Power Company, Inc.
10.1 Technology Transfer Agreement dated April 9, 2001,
between Green Aero Technology Inc. and Power
Acquisition Corp.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in behalf of the
Registrant and in the capacities and on the dates indicated.
SOUTHERN STATES POWER COMPANY, INC.
By: s/Harrison A. McCoy
---------------------------------------
Harrison A. McCoy, Vice President
& Director
Dated: April 30, 2001.
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Exhibit 2
PLAN OF MERGER
THIS AGREEMENT made and entered into as of this 11th day of April 2001, by
and between Southern States Power Company, Inc., a Delaware corporation
("SSPC"), with offices at 3400 Inland Empire Blvd., Suite 101, Ontario, CA
91764, and Power Acquisition Corp., a Delaware corporation ("Acquisition
Corp."), with offices at 3400 Inland Empire Blvd., Suite 101, Ontario, CA 91764.
W I T N E S S E T H:
WHEREAS, 90% of the authorized and issued capital stock of Acquisition
Corp. is owned by SSPC; and
WHEREAS, the Parties agree that it would be in their respective best
interests to merge.
N O W T H E R E F O R E,
In consideration of the provisions and the representations, warranties and
agreements herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE I
TERMS AND CONDITIONS OF STOCK EXCHANGE AND MERGER
(a) On the "Effective Date", as hereinafter defined, the following shall be
or shall have been done:
(i) SSPC and Acquisition Corp. shall have obtained approval for this
Agreement and the transactions described herein by their respective Boards of
Directors and Owners, if necessary, pursuant to the applicable provisions of
Delaware law;
(ii) Acquisition Corp. shall merge into SSPC and cease to exist;
(iii) SSPC shall thereupon and thereafter possess, and be the owner of, all
the rights, privileges, powers, franchises, patents, trademarks, licenses, and
other assets and accounts receivable of every kind and description of
Acquisition Corp., and SSPC shall be subject to all the restrictions,
disabilities, and duties of Acquisition Corp. with respect thereto; and all
property, real, personal or mixed, and all debts and obligation due to
Acquisition Corp.on whatever account shall be vested in SSPC; and all rights of
creditors and all liens upon any property of Acquisition Corp. shall be
preserved unimpaired; and all debts, liabilities, duties, and obligations of
Acquisition Corp. [including obligations of Acquisition Corp. on account of (A)
Stock Subscriptions to which Acquisition Corp. is a Party; (B) Debentures of
Acquisition Corp.; and (C) Stock Conversion obligations with respect to
Debentures of Acquisition Corp.], shall henceforth attach to SSPC, and may
enforced against SSPC to the same extent as if said debts, liabilities, duties,
and obligations had been incurred or contracted by SSPC;
(iv) If, at any time after the Effective Date, SSPC shall consider or be
advised that any further
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assignments or assurances and law or any other acts are necessary or desirable
(A) to vest, perfect or confirm, of record or otherwise, in SSPC, title to and
possession of any property or right of Acquisition Corp. acquired or to be
acquired by reason of, or in connection with, this Merger, or (B) otherwise to
carry out the purposes of this Merger, Acquisition Corp. and its officers and
directors shall be deemed to have granted to SSPC an irrevocable power of
attorney to execute and deliver all such proper deeds, assignments, and
assurances in law, and to do all acts necessary or proper to vest, perfect or
confirm title to and possession of such property or rights in SSPC addition and
otherwise to carry out the purposes of this Merger; and the proper officers and
directors of SSPC are fully authorized in the name of Acquisition Corp.
otherwise to take any and all such action(s);
(v) Acquisition Corp.'s 8% Series A $1,000,000.00 Senior Subordinated
Convertible Redeemable Debentures (the "Acquisition Corp. Debentures"), together
with authorized but unissued underlying shares of Acquisition Corp.'s Class A
Common stock, Par Value $0.001 per share (the "Acquisition Corp. Common Stock"),
into which the Acquisition Corp. Debentures are convertible from time to time,
shall be converted into identical SSPC debentures (the "SSPC Debentures"),
together with authorized but unissued underlying shares of Common Stock, Par
Value $0.001 share, of SSPC into which the new SSPC Debentures may be converted
(the "SSPC Common Stock");
(vi) All of the issued and outstanding shares of the Class A Common Stock,
Par Value $0.001 per share, i.e., 90 shares, of Acquisition Corp. held by SSPC
prior to this Merger, may, by virtue of this Merger, and without any further
action of SSPC, be canceled simultaneously with the effectiveness of this
Merger.
(vii) All of the issued and outstanding shares of the Class B Non Voting
Common Stock, Par Value $0.01 per share, i.e., 10 shares, of Acquisition Corp.
held by Green Aero Energy, Ltd. prior to this Merger shall be converted into
4,000,000 shares of Common Stock, Par Value $0.001per share, of SSPC.
(viii) Until surrendered and exchanged as herein provided, each outstanding
certificate which, prior to the Effective Date, represented a Acquisition Corp.
security, shall be deemed for all corporate purposes to evidence ownership of
the appropriate number of securities of SSPC into which Acquisition Corp.
security shall have been so converted;
(ix) Subject to Sub-section (vi), above, each holder of a certificate
representing issued and outstanding securities of Acquisition Corp. immediately
prior to the Effective Date of the Merger, shall, upon surrender of such
certificate to SSPC after the Effective Date, be entitled to receive a
certificate representing the appropriate number of shares of securities of SSPC
as described above;
(x) If any certificate representing a SSPC security is to be issued in a
name other than that in which the certificate surrendered is registered, it
shall be a condition of such issuance that the certificate so surrendered shall
be properly endorsed or otherwise in proper form for transfer and that the
person requesting such issuance shall either pay to SSPC or its transfer agent
any transfer or other taxes required by reason of the issuance of certificates
representing a SSPC security in a name other than that of the registered holder
of the certificate surrendered, or establish to the satisfaction of SSPC or its
transfer agent that such tax has been paid or is not applicable; and
(xi) The officers and directors of Acquisition Corp. shall resign their
positions.
(b) The right to transfer restricted securities may be permitted if, in the
opinion of counsel satisfactory to SSPC, the securities may be transferred
pursuant to an exemption from registration under the Act.
(c) This merger shall become effective ("Effective Date") on the day set
forth in the Articles of Incorporation to be filed with the Secretary of State
of Delaware by the Parties as soon as practicable after the date this Agreement
is signed.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ACQUISITION CORP.
(a) Organization and Authority. Acquisition Corp. is duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own its property and
assets and to conduct its business in the manner and in the places in which it
is now conducted. Acquisition Corp. is qualified to do business as a domestic
corporation in the State of Delaware, and the character of the properties owned
or leased by Acquisition Corp. and the nature of the business conducted by it
does not require such qualification in any other jurisdiction, except where the
failure to so qualify would not have a material adverse affect on Acquisition
Corp. or its business.
(b) Corporate Action. All corporate action necessary on the part of
Acquisition Corp. to authorize the execution and delivery of this Agreement and
the performance or satisfaction of Acquisition Corp.'s obligations hereunder and
thereunder has been or will have been duly taken prior to the Effective Date.
This Agreement and the Articles of Incorporation constitute the valid and
binding obligations of Acquisition Corp. enforceable in accordance with their
respective terms.
(c) Capitalization. As at the Effective Date, Acquisition Corp.'s entire
capitalization shall consist of:
(i) 10,000 shares of Class A Common Stock, Par Value $0.001 per share, of
which 90 shares shall be issued and outstanding;
(ii) 1,000 shares of Class B Non Voting Common Stock, Par Value $0.001 per
share, of which 10 shares shall be issued and outstanding;
(ii) 8% Series A $1,000,000.00 Senior Subordinated Convertible Redeemable
Debentures, convertible, from time to time, into authorized but unissued shares
of Class A Common Stock, Par Value $0.001 per share, upon conversion into which
no shares of said underlying shares of Common Stock shall have been issued.
As of the date of this Agreement and as at Effective Date, all of the
outstanding capital stock of Acquisition Corp. is and will be duly issued in
accordance with all applicable laws, rules and regulations, is and will be fully
paid and non-assessable. As of the date of this Agreement and as at Effective
Date, there are and will be no outstanding subscriptions, rights, options,
warrants or other agreements obligating Acquisition Corp. to issue, sell or
transfer any stock or other securities of Acquisition Corp., except as otherwise
described in this Agreement. |
