UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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 7, 2005
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ABLE ENERGY, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 001-15035 22-3520840
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
198 Green Pond Road, Rockaway, New Jersey 07866
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(Address of Principal Executive Offices) (Zip Code)
(973) 625-1012
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(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, 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 (SEE General Instruction A.2. below):
|_| Written communications 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))
ITEM 8.01 OTHER EVENTS.
As previously disclosed in our Current Report on Form 8-K, dated
February 28, 2005, and filed with the Securities and Exchange Commission on
March 4, 2005, we are currently contemplating the acquisition of our affiliate,
All American Plazas, Inc. ("All American"). All American has recently
consummated a financing that, if the acquisition of All American is consummated,
will impact us. Accordingly, this Current Report on Form 8-K is being filed to
describe the refinancing recently completed by All American, which allowed All
American to pay off approximately $3,000,000 in existing debt and provided All
American with approximately $2,000,000 in working capital. There can be no
assurance that we will acquire All American on terms favorable to us, if at all.
An independent committee of our Board of Directors is currently meeting
with an independent appraisal company for the purpose of retaining said company
to provide an independent appraised value of All American. We believe that this
appraisal will include considering the impact of the All American financing and
other corporate and market developments, such as new property acquired by All
American and improved All American operating results.
The following description of the terms of the All American's refinancing
is qualified in its entirety by the terms and provisions contained in the
financing documentation attached to this Current Report on Form 8-K as Exhibits
99.1 through 99.7.
Pursuant to the terms of the Securities Purchase Agreement dated June
1, 2005 (the "Agreement") among All American and certain purchasers identified
therein (collectively, the "Purchasers"), the Purchasers loaned All American an
aggregate of $5,000,000, evidenced by Secured Debentures also dated June 1, 2005
(the "Debentures"). The Debentures shall be repaid within two years from the
date of issuance, subject to the occurrence of an event of default, with
interest payable at the rate per annum equal to LIBOR for the applicable
interest period, plus 4% payable on a quarterly basis on April 1st, July 1st,
October 1st and January 1st, beginning on the first such date after the date of
issuance of the Debentures. The loan is secured by real estate property owned by
All American in Pennsylvania and New Hampshire. In addition, in the event that
we do not complete the acquisition of All American prior to the expiration of
the 12-month anniversary of the Agreement, All American shall be considered in
default of the loan. Pursuant to the Additional Investment Right (the "AIR
Agreement") among All American and the Purchasers, the Purchasers may loan All
American up to an additional $5,000,000 on the same terms and conditions as the
initial $5,000,000 loan, except for the conversion price of the debentures.
If we consummate the acquisition of All American, upon such
consummation, we will assume the obligations of All American under the
Agreement, the Debentures and the AIR Agreement through the execution of a
Securities Assumption, Amendment and Issuance Agreement, Registration Rights
Agreement, Common Stock Purchase Warrant Agreement and Variable Rate Secured
Convertible Debenture Agreement, each between the Purchasers and us (the "Able
Energy Transaction Documents"). Such documents provide that All American shall
cause the real estate collateral to continue to secure the loan, until the
earlier of full repayment of the loan upon expiration of the Debentures or
conversion by the Purchasers of the Debentures into shares of our common stock
at a conversion rate of the lesser of (i) the purchase price paid by us for each
share of All American common stock in the acquisition, or (ii) $3.00, (the
"Conversion Price"), subject to further adjustment as set forth in the Able
Energy Transaction Documents. However, the Conversion Price with respect to the
AIR Agreement shall be $4.00. In addition, the Purchasers shall have the right
to receive five-year warrants to purchase 2,500,000 of our common stock at an
exercise price of $3.75 per share. Pursuant to the Able Energy Transaction
Documents, we shall also have an optional redemption right (which right shall be
mandatory upon the occurrence of an event of default) to repurchase all of the
Debentures for 125% of the face amount of the Debentures plus all accrued and
outstanding interest and expenses, as well as a right to repurchase all of the
Debentures in the event of the consummation of a new financing in which we sell
securities at a purchase price that is below the Conversion Price. It is
currently contemplated that if the Able/All American transaction is consummated,
the stockholders of All American will escrow a sufficient number of shares to
satisfy the conversion of the $5,000,000 in outstanding Debentures in full.
Pursuant to the Registration Rights Agreement among the parties, if we
consummate the acquisition of All American, the Purchasers shall have demand
registration rights with respect to all shares of our common stock obtained by
them through the conversion of the Debentures. The Purchasers shall also have an
additional investment right, for a period of nine months after the initial
registration statement filed by us with the Securities and Exchange Commission
(the "SEC") is first declared effective by the SEC, to purchase units consisting
of convertible debentures in the aggregate amount of up to $14,000,000 (the
"Additional Debentures") and common stock purchase warrants equal to 50% of the
face amount of such Additional Debentures (the "Additional Warrants"). The
conversion price of the Additional Debentures shall be $6.50 per share of common
stock with respect to the first $7,000,000 of Additional Debentures purchased,
and 80% of the average weighted price of our common stock during the 20 trading
days immediately prior to the Purchasers' election to purchase the Additional
Debentures, with respect to the remaining $7,000,000. The Additional Warrants
shall have a five- year term and an exercise price of 110% of the conversion
price. In the event of the occurrence of a default with respect to the
Additional Debentures, we shall have identical redemption rights to those
described in the immediately preceding paragraph.
As noted above, in connection with the potential acquisition of All
American, an independent committee of our Board of Directors is currently
considering the price and other material terms of the contemplated acquisition
with the assistance of an outside independent appraiser. However, there can be
no assurance that the acquisition will occur on terms previously disclosed or
favorable to us, or at all.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are furnished with this report:
Exhibit No. Description
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99.1 Securities Purchase Agreement, by and among All American
and the Purchasers, dated as of June 1, 2005.
99.2 Form of Secured Debenture, made as of June 1, 2005, by
all American in favor of the Purchasers.
99.3 Additional Investment Right, by and among All American,
and the Purchasers, dated as of June 1, 2005.
99.4 Form of Securities Assumption, Amendment and Issuance
Agreement by and among the Purchasers and us.
99.5 Form of Registration Rights Agreement by and among the
Purchasers and us.
99.6 Form of Common Stock Purchase Warrant Agreement by and
among the Purchasers and us.
99.7 Form of Variable Rate Secured Convertible Debenture
Agreement by and among the Purchasers and us.
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.
ABLE ENERGY, INC.
BY: /s/ Christopher P. Westad
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Name: Christopher P. Westad
Title: President and Interim Chief
Executive Officer
Date: June 10, 2005