Metretek Technologies, Inc. S-3
As filed with the Securities and Exchange Commission on March 2, 2006
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
METRETEK TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
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Delaware
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84-1169358 |
(State or other jurisdiction of
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(I.R.S. Employer |
incorporation or organization)
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Identification Number) |
303 East 17th Avenue, Suite 660
Denver, Colorado 80203
(303) 785-8080
(Address, including zip code, and telephone number, including area code,
of Registrants principal executive offices)
A. Bradley Gabbard
Executive Vice President and Chief Financial Officer
Metretek Technologies, Inc.
303 East 17th Avenue, Suite 660
Denver, Colorado 80203
(303) 785-8080
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Paul R. Hess, Esq.
Kegler, Brown, Hill & Ritter Co., L.P.A.
65 E. State Street, Suite 1800
Columbus, Ohio 43215
(614) 462-5400
Approximate date of commencement of proposed sale to the public: From time to time after this
Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box.o
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plants, check the following box.
þ
If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the
following box. o
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
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If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
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CALCULATION OF REGISTRATION FEE
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Proposed |
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Proposed |
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Amount |
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Maximum |
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Maximum |
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Title of Each Class of |
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to be |
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Offering Price |
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Aggregate |
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Amount of |
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Securities to be Registered |
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Registered |
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Per Share |
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Offering Price |
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Registration Fee |
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Common Stock, par value
$.01 per share (1) |
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833,650 shares (2) (3) |
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$ |
14.035 |
(4) |
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11,700,277 |
(4) |
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$ |
1,251.93 |
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(1) |
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Includes the related Preferred Share Purchase Rights to purchase shares of Series C Preferred
Stock, par value $.01 per share, of Metretek Technologies, Inc. No separate consideration
will be received for the Preferred Share Purchase Rights, which, prior to the occurrence of
certain prescribed events, are not exercisable, are evidenced by the certificates for the
Common Stock, and are transferable only with the Common Stock. The value, if any, of the
Preferred Share Purchase Rights is reflected in the market price of the Common Stock. |
(2) |
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Pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended, this
Registration Statement also registers such indeterminate number of additional shares as may be
issued to the selling stockholders as the result of stock splits, stock dividends or similar
transactions affecting the Common Stock. |
(3) |
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Estimated solely for the purpose of computing the amount of the registration fee pursuant to
Rule 457(c) under the Securities Act of 1933, as amended, based on the average of the high and
low sales prices of the Common Stock on February 27, 2006, as reported by the American Stock
Exchange. |
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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary
to delay its effective date until the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. |
The information in this prospectus is not complete and may be changed. The selling stockholders
may not sell these securities until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an offer to sell these securities and is
not soliciting an offer to buy these securities in any state where the offer or sale is not
permitted.
Subject to Completion
Dated March 2, 2006
PROSPECTUS
833,650 Shares
METRETEK TECHNOLOGIES, INC.
Common Stock
This prospectus relates to the offer and sale from time to time of up to 833,650 shares of our
common stock by the selling stockholders identified in this prospectus. The shares covered by this
prospectus were acquired by the selling stockholders in a private placement.
The selling stockholders may from time to time offer, sell or otherwise dispose of the shares
offered under this prospectus in a number of different ways and at varying prices. We provide more
information about how the selling stockholders may sell the shares in the section entitled Plan of
Distribution beginning on page 29.
We will not receive any proceeds from the sale of the shares by the selling stockholders. We
will pay all expenses of the registration of the shares, and the selling stockholders will pay any
broker-dealer or underwriter fees, discounts or commissions and other selling expenses of the
shares.
Our common stock is listed on the American Stock Exchange under the symbol MEK. On March 1,
2006, the last sale price of our common stock as reported on the American Stock Exchange was
$14.15 per share.
Investing in our common stock involves a number of significant risks. See Risk Factors
beginning on page 6.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is March __, 2006
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with the Securities and
Exchange Commission using a shelf registration process. Under this process, the selling
stockholders may from time to time offer, sell or otherwise dispose of the shares of common stock
offered under this prospectus.
You should rely only on the information contained or incorporated by reference in this
prospectus. Neither we nor the selling stockholders have authorized any other person to provide
you with information that is different. The selling stockholders are not making an offer to sell
and are not soliciting an offer to buy our common stock in any jurisdiction where offers or sales
are not permitted. The information in this prospectus is complete and accurate only as of the date
on the front cover of this prospectus, regardless of the time of delivery of this prospectus or of
any sale of shares. When we use the term this prospectus, we are referring to this prospectus
along with any applicable prospectus supplements, unless the context requires otherwise.
The registration statement of which this prospectus is a part contains important additional
information and exhibits about us and the securities that is not included in this prospectus. You
should carefully read this prospectus along with the documents incorporated by reference in this
prospectus and the exhibits to the registration statement. To obtain this additional information
and these exhibits, see Where You Can Find More Information.
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WHO WE ARE
Metretek Technologies, Inc.
Through our subsidiaries, we are a diversified provider of energy technology products,
services and data management systems to industrial and commercial users and suppliers of natural
gas and electricity. We currently conduct our operations through three subsidiaries:
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PowerSecure, Inc., based in Wake Forest, North Carolina, which designs, engineers,
sells and manages distributed generation systems marketed primarily to industrial and
commercial users of electricity. |
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Southern Flow Companies, Inc., based in Lafayette, Louisiana, which provides a wide
variety of natural gas measurement services principally to producers and operators of
natural gas production facilities. |
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Metretek, Incorporated, which we refer to as Metretek Florida, based in Melbourne,
Florida, which provides data collection, telemetry and other types of
machine-to-machine connectivity solutions for applications such as automatic meter
reading, cathodic protection and other types of remote monitoring and collection
applications. |
In addition to
these subsidiaries, Marcum Gas Transmission, Inc., a subsidiary of ours based
in Denver, Colorado, owns an approximate 27% economic interest in an unconsolidated business,
Marcum Midstream 1995-2 Business Trust, which we refer to as MM 1995-2. MM 1995-2 operates four
production water disposal facilities located in northeastern Colorado.
In
this prospectus, references to Metretek, company, we, us and our refer to
Metretek Technologies, Inc. together with its subsidiaries, unless we state otherwise or the
context indicates otherwise.
We were incorporated in Delaware on April 5, 1991 under the name Marcum Natural Gas Services,
Inc., and we changed our name in June 1999 to Metretek Technologies, Inc. Our principal
executive offices are located at 303 East Seventeenth Avenue, Suite 660, Denver, Colorado 80203,
and our telephone number at those offices is (303) 785-8080. Our Internet website address is
www.metretrek.com. Information contained on our website is not incorporated into this
prospectus.
Business Strategy
Our business strategy is to position ourself as an integrated provider of data management
products, services and systems that enhance the availability of management information and services
primarily to suppliers and users of energy. While our products, services and systems have
historically been aimed primarily at the natural gas industry, we are focusing more of our current
and future products, services and systems to other segments of the energy industry, especially the
electricity industry, as well as to other industries that require data management services. The
energy industry continues to experience fundamental regulatory and structural changes and
significant new trends. Our strategy is to acquire, develop, operate and expand businesses that
are positioned to take advantage of these changes and trends.
In implementing our business strategy, we have acquired or formed the following important
businesses:
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In 1993, we acquired substantially all of the assets of the Southern Flow Companies
division of Weatherford International Incorporated. |
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In 1994, we acquired Metretek Florida. |
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In 1998, we acquired the electronic corrector business from American Meter Company
to further expand the product and service offerings of Metretek Florida. |
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In 2000, we formed PowerSecure to develop and operate our distributed generation
business. |
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In 2001, we acquired a process control and switchgear design and manufacturing firm
as part of PowerSecures growth strategy. |
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In 2003, we commenced the development of the cellular network interface and
InvisiConnectTM series of products, which are machine-to-machine connection
solutions for wireless network technology, to enhance the product, service and
technology offerings of Metretek Florida. |
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In 2004, we significantly increased our economic interest in MM 1995-2 and we
acquired the minority interest in PowerSecure. |
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In 2005 and early 2006,
PowerSecure launched three new complementary energy service businesses for the purpose
of expanding its business to include providing technical engineering services, management
consulting and lighting efficiency services. |
While we regularly engage in discussions relating to potential acquisitions and dispositions
of assets, businesses and companies, as of the date of this prospectus we have not entered into any
binding agreement or commitment with respect to any material acquisition or disposition.
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RISK FACTORS
An investment in our common stock involves a number of significant risks. You should consider
carefully the risks, uncertainties and other factors described below, along with all of the other
information contained or incorporated by reference in this prospectus, before making an investment
decision. In addition, the risks, uncertainties and other factors described below are not the only
ones we face. There may be additional risks, uncertainties and other factors that we do not
currently consider material or that are not currently known to us. If any of the following risks
were to occur, our business, affairs, prospects, assets, financial condition, results of operations
and cash flows could be materially adversely affected. When we say that something could or will
have a material adverse effect on us or our business, we mean that it could or will have one or
more of these effects. If this occurs, the trading price of our common stock could decline, and
you could lose all or part of your investment.
Risks Related to our Business and Industry
We have a history of losses, and, despite our recent profitability, we may not be able to
remain profitable in the future.
Although we have recorded net income of $825,000 in fiscal 2005 through September 30, 2005, we
have incurred net losses in each full year of our operations since our inception, including a net
loss attributable to common shareholders of approximately $4.5 million in fiscal 2004. As of
September 30, 2005, we had an accumulated deficit of approximately $57.7 million. Accordingly,
notwithstanding our recent profitability in fiscal 2005, we may not be able to sustain or increase
that profitability on a quarterly or annual basis in the future. There is no guarantee that our
future revenues will grow significantly, if at all. Moreover, as a result of our intended future
growth and expansion of our businesses, products and services, we may incur expenses in future
periods, including significant costs in developing and expanding the distributed generation
business of PowerSecure and the telemetry business of Metretek Florida, that exceed our revenues.
If our future revenues do not meet our expectations, or if our operating expenses exceed what we
anticipate and cannot be reduced below our revenues, our business, financial condition and results
of operations will be materially and adversely affected.
We may require a substantial amount of additional funds to fund our capital requirements and
to finance the growth of our business, but we may not be able to raise a sufficient amount
of funds to do so on terms favorable to us and our stockholders or at all.
We may need to obtain additional capital to fund our capital obligations and to finance the
development and expansion of our businesses. For example, we will need substantial additional
capital to develop the growing business divisions of PowerSecure and to finance the development of
Metretek Floridas telemetry business. Further, under the settlement agreement in connection with
a class action lawsuit, we are required to make payments on a $3.0 million promissory note in the
annual amount of $750,000 plus interest through June 30, 2008. In addition, from time to time as
part of our business plan, we engage in discussions regarding potential acquisitions of businesses
and technologies. While our ability to finance future acquisitions will probably depend on or
ability to raise additional capital, as of the date of this prospectus, we have not entered into
any agreement committing us to any such acquisition. Moreover, unanticipated events, over which we
have no control, could increase our operating costs or decrease our ability to generate revenues
from product and service sales, necessitating additional capital. We continually evaluate our cash
flow requirements as well as our opportunity to raise additional capital in order to improve our
financial position. In addition, we continually evaluate opportunities to improve our credit
facilities, through increased credit availability, lower debt costs or other more favorable terms.
We cannot provide any assurance that we will be able to raise additional capital or replace our
current credit facilities when needed or desired, or that the terms of any such financing will be
favorable to us and our stockholders.
We entered into a new credit facility in September 2005, under which we have a maximum credit
facility of $4.5 million. The credit facility matures in September 2007. Our ability to borrow
funds under the credit facility is limited to our loan availability based upon certain assets of
our subsidiaries. As of September 30, 2005, our loan availability under the credit facility was
$4,404,000, of which approximately $1,815,000 had been borrowed, leaving $2,589,000 available for
future use. The amount of our loan availability, as well as the amount borrowed under the credit
facility, will change in the future depending on our asset base, our liquidity and our capital
requirements.
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Our current credit facility has a number of financial covenants that our subsidiaries must
satisfy. Our ability to satisfy those covenants depends principally upon our ability to achieve
positive operating performance. If any of our borrowing subsidiaries is unable to fully satisfy
the financial covenants of the credit facility, it will breach the terms of the credit facility.
Our obligations under the credit facility are secured by a first priority security interest in
substantially all of the assets of our subsidiaries, and by guarantees by Metretek Technologies and
our subsidiaries. Any breach of the covenants in the credit facility could result in a default
under the credit facility and an acceleration of payment of all outstanding debt owed, which would
materially and adversely affect our financial condition.
We may seek to raise any needed or desired additional capital from the proceeds of public or
private equity or debt offerings at the Metretek Technologies level or at the subsidiary level or
both, through asset or business sales, from traditional credit financings or from other financing
sources. Our ability to obtain additional capital when needed or desired will depend on many
factors, including general market conditions, our operating performance and investor sentiment, and
thus cannot be assured. In addition, depending on how it is structured, raising capital could
require the consent of our lender. Even if we are able to raise additional capital, the terms of
any financing could be adverse to the interests of our stockholders. For example, the terms of
debt financing could include covenants that restrict our ability to operate our business or to
expand our operations, while the terms of an equity financing, involving the issuance of capital
stock or of securities convertible into capital stock, could dilute the percentage ownership
interests of our stockholders, and the new capital stock or other new securities could have rights,
preferences or privileges senior to those of our current stockholders. We cannot assure you that
sufficient additional funds will be available to us when needed or desired or that, if available,
such funds can be obtained on terms favorable to us and our stockholders and acceptable to our
lender, if its consent is required. Our inability to obtain sufficient additional capital on a
timely basis on favorable terms could have a material adverse effect on our business, financial
condition and results of operations.
We have been subject to lawsuits in the past, and if in the future we become subject to
lawsuits, and if any of those lawsuits are successfully prosecuted against us, our business,
financial condition and results of operations could be materially and adversely affected.
We have been subject to lawsuits in the past that have had a material impact on us. In the
future, we may become involved in other disputes and legal actions that arise in the ordinary
course of business. We cannot provide any assurance that any such future litigation and claims
against us could not materially and adversely affect our business, financial condition and results
of operation.
Our future operating results are difficult to project and have fluctuated significantly in
the past, and fluctuations in the future may adversely affect the trading price of our
common stock.
Our operating results have fluctuated significantly from quarter-to-quarter, period-to-period
and year-to-year in the past and are expected to continue to fluctuate significantly in the future
due to a variety of factors, many of which are outside of our control and any of which may cause
the trading price of our common stock to fluctuate. These factors include, without limitation, the
following:
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the size, timing and terms of sales and orders, including customers delaying, deferring
or canceling purchase orders or making smaller purchases than expected; |
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the effects of hurricanes and other weather conditions on the needs and demand
requirements of our customers; |
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our ability to obtain adequate supplies of key components and materials for our products
on a timely and cost-effective basis; |
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our ability to implement our business plans and strategies and the timing of such
implementation; |
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the timing, pricing and market acceptance of our new products and services such as
Metretek Floridas new telemetry offerings; |
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the pace of development of our new businesses and the growth of their markets; |
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changes in our pricing policies and those of our competitors; |
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variations in the length of our product and service implementation process; |
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changes in the mix of products and services having differing margins; |
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changes in the mix of international and domestic revenues; |
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the life cycles of our products and services; |
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budgeting cycles of utilities and other major customers; |
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general economic and political conditions; |
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the resolution of pending and any future litigation and claims; |
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economic conditions in the energy industry, especially in the natural gas and electricity sectors; |
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the effects of governmental regulations and regulatory changes in our markets; |
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changes in the prices charged by our suppliers; |
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our ability to make and obtain the expected benefits from acquisitions of technology or
businesses, and the costs related to such acquisitions; |
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changes in our operating expenses; and |
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the development and maintenance of business relationships with strategic partners. |
Because we have little or no control over most of these factors, our operating results are
difficult to predict. Any substantial adverse change in any of these factors could negatively
affect our business and results of operations.
Our revenues and other operating results are heavily dependant upon the volume and timing of
customer orders and payments and the date of product delivery. The timing of large individual
sales is difficult for us to predict. Because our operating expenses are based on anticipated
revenues and because a high percentage of these are relatively fixed, a shortfall or delay in
recognizing revenue could cause our operating results to vary significantly from quarter-to-quarter
and could result in significant operating losses in any particular quarter. If our revenues fall
below our expectations in any particular quarter, we may not be able to reduce our expenses rapidly
in response to the shortfall, which could result in us suffering significant operating losses in
that quarter.
Due to these factors and the other risks discussed in this prospectus, you should not rely on
quarter-to-quarter, period-to-period or year-to-year comparisons of our results of operations as an
indication of our future performance. Quarterly, period and annual comparisons of our operating
results are not necessarily meaningful or indicative of future performance. It is possible that in
some future periods our results of operations may fall below the expectations of public market
analysts and investors, causing the trading price of our common stock to decline.
Severe, adverse weather conditions, such as hurricanes, can cause a severe disruption in the
business of Southern Flow by significantly reducing the short and mid-term demand
requirements of its customers.
Southern Flows business is in large part dependent upon the business of large oil and gas
producers. Severe, adverse weather conditions, such as hurricanes, can cause serious disruptions
in the production activities of those customers, which in turns reduces their demand for Southern
Flows services. While such production reductions tend to be temporary and after time return to
normal levels, the disruption causes Southern Flow to lose business that is generally not
replaceable. This loss of business results in a loss of revenues for Southern Flow, but since
Southern Flows expenses tend to be fixed, at least in the short term, these short-term losses of
revenues have a significant effect on Southern Flows net income, and thus a material adverse
impact on our revenues, financial condition and results of operations.
Because some of our business and product offerings have limited histories and their business
strategies are still being developed and are unproven, limited information is available to
evaluate their future prospects.
Our business strategy includes the development and expansion of new businesses and product
lines from time to time, including PowerSecures shared savings programs and Metretek Floridas
telemetry business. Our plans and strategies with respect to these new businesses are often based
on unproven models and must be developed and modified. Our future success depends in large part
upon our ability to develop these new businesses so that they will generate significant revenues,
profits and cash flow.
As a company developing new businesses in the rapidly evolving energy and technology markets,
we face
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numerous risks and uncertainties which are described in this Item as well as other parts of
this Report. Some of these risks relate to our ability to:
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anticipate and adapt to the changing regulatory climate for energy and technology
products, services and technology; |
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attract customers to our new businesses; |
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anticipate and adapt to the changing energy markets and end-user preferences; |
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attract, retain and motivate qualified personnel; |
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respond to actions taken by our competitors; |
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integrate acquired businesses, technologies, products and services; |
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generate revenues, gross margins, cash flow and profits from sales of new products
and services; and |
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implement an effective marketing strategy to promote awareness of our new
businesses, products and services. |
Our business and financial results in the future will depend heavily on the market acceptance
and profitability of our new businesses and these new product and service offerings lines. If we
are unsuccessful in addressing these risks or in executing our business strategies, or if our
business model fails or is invalid, then our business would be materially and adversely affected.
Restrictions imposed on us by the terms of our current credit facility and the class action
settlement could limit how we conduct our business and our ability to raise additional
capital.
The terms of our current credit facility and the class action settlement contain financial and
operating covenants that place restrictions on our activities and limit the discretion of our
management. These covenants place significant restrictions on our ability to:
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incur additional indebtedness; |
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create liens or other encumbrances; |
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issue or redeem our securities; |
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make dividend payments and investments; |
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amend our charter documents; |
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sell or otherwise dispose of our or our subsidiaries stock or assets; |
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liquidate or dissolve; |
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merge or consolidate with other companies; or |
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reorganize, recapitalize or engage in a similar business transaction. |
Any future financing arrangements will likely contain similar or more restrictive covenants.
As a result of these restrictions, we may be:
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limited in how we conduct our business; |
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unable to raise additional capital, through debt or equity financings, when needed
for our operations and growth; and |
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unable to compete effectively or to take advantage of new business opportunities. |
In addition, on several occasions during fiscal 2004, including the fourth quarter of fiscal
2004, Metretek Florida was in violation of certain financial covenants under its credit agreement.
Although in each case we received a waiver from the lender, there can be no assurance that such a
waiver will be available on acceptable terms in the event of a future default. If a default is
declared and not waived or cured, the entire indebtedness then owed under the credit facility could
be accelerated, and we may not be able to repay it. In addition, if the credit facility matures
and is not renewed, we may not be able to obtain successor financing on acceptable terms. The need
to
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comply with the terms of our debt obligations may also limit our ability to obtain additional
financing and our flexibility in planning for or reacting to changes in our business. If as a
result of these covenants, we are unable to pursue a favorable transaction or course of action or
to respond to an unfavorable event, condition or circumstance, then our business could be
materially and adversely affected.
Our dependence on third party partners and suppliers, including sole source suppliers, may
prevent us from delivering acceptable products or performing acceptable services on a timely
basis.
We rely on single source suppliers and highly in demand parts for some of the critical
components we use in our products. Our business is dependent on our ability to anticipate our needs
for components and products and our suppliers ability to deliver such components and products in
time to meet critical manufacturing and installation schedules. Our business could be adversely
affected, for example, if PowerSecure is unable to obtain, on a timely and cost-efficient basis,
sufficient generators to meet its customers installation schedules. In addition, our business
could be adversely affected if we experience supply constraints or if we experience any other
interruption or delay in the supply chain which interfere with our ability to manufacture our
products or manage our inventory levels.
Our PowerSecure business is subject to many business risks, including the risk of changes in
tariff structures and in environmental requirements, and if any of these risks materialize,
they could materially and adversely affect PowerSecures business as well as our financial
condition and results of operations.
PowerSecures business is dependent, in part, upon its ability to utilize distributed
generation to create favorable pricing for customers based on existing tariff structures. If
utility tariffs change in some regions, then PowerSecures business would become less viable in
those regions. Moreover, even if such tariffs do not change, if PowerSecure is unable to obtain
the expected benefits from those tariffs, its shared savings projects, that are dependent upon such
benefits, would be materially and adversely affected. Also, PowerSecure presently utilizes diesel
powered generators in its systems. If regulatory requirements in its business regions are modified
to either effectively ban diesel or to make diesel no longer commercially viable in those regions,
then PowerSecures business would be materially and adversely affected. While PowerSecure, in such
case, would utilize its efforts to find alternative power sources, there is no assurance those
alternative sources would be economically acceptable.
Because we are dependent upon the utility industry for a significant portion of our revenue,
continued reductions of purchases of our products and services by utilities caused by
regulatory reform may materially and adversely affect our business.
We currently derive a significant portion of our revenue from sales by Metretek Florida of its
products and services to the utility industry, and particularly the natural gas utility industry.
A key reason that we have experienced variability of operating results on both an annual and
quarterly basis has been utility purchasing patterns, including delays of purchasing decisions, as
the result of mergers and acquisitions in the utility industry and potential changes to the federal
and state regulatory framework within which the utility industry operates. The utility industry is
generally characterized by long budgeting, purchasing and regulatory process cycles that can take
up to several years to complete. Our utility customers typically issue requests for quotes and
proposals, establish committees to evaluate the purchase proposals, review different technical
options with vendors, analyze performance and cost/benefit justifications and perform a regulatory
review, in addition to applying a normal budget approval process within the utility. In addition,
utilities may defer purchases of our products and services if the utilities reduce capital
expenditures as the result of mergers and acquisitions, pending or unfavorable regulatory
decisions, poor revenues due to weather conditions, rising interest rates or general economic
downturns, among other factors. The natural gas utility industry has been virtually the sole
market for Metretek Floridas products and services. However, over the last few years, the
uncertainty in the utility industry that has resulted from the regulatory uncertainty in the
current era of deregulation has caused utilities to defer even further purchases of Metretek
Floridas products and services. The continuation of this uncertain regulatory climate will
materially and adversely affect our revenues.
The domestic utility industry is currently the focus of regulatory reform initiatives in
virtually every state. These initiatives have resulted in significant uncertainty for industry
participants and raise concerns regarding assets that would not be considered for recovery through
rate payer charges. This regulatory climate has caused many utilities to delay purchasing
decisions that involve significant capital commitments. As a result of these purchasing decision
delays, utilities have reduced their purchases of our products and services. While we expect some
states
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will act on these regulatory reform initiatives in the near future, we cannot assure you that
the current regulatory uncertainty will be resolved in the short term. In addition, new regulatory
initiatives could have a material adverse effect on our business. Moreover, in part as a result of
the competitive pressures in the utility industry arising from the regulatory reform process, many
utilities are pursuing merger and acquisition strategies. We have experienced considerable delays
in purchase decisions by utilities that have become parties to merger or acquisition transactions.
Typically, capital expenditure purchase decisions are put on hold indefinitely when merger
negotiations begin. If this pattern of merger and acquisition activity among utilities continues,
our business may be materially and adversely affected. In addition, if any of the utilities that
account for a significant portion of our revenues decide to significantly reduce their purchases of
our products and services, our financial condition and results of operations may be materially and
adversely affected.
Many of our products and services experience long and variable sales cycles, which could
have a negative impact on our results of operations for any given quarter or year.
Our products and services are often used by our customers to address critical business needs.
Customers generally consider a wide range of issues before making a decision to purchase our
products and services. In addition, the purchase of some of our products and services involves a
significant commitment of capital and other resources by a customer. This commitment often requires
significant technical review, assessment of competitive products and approval at a number of
management levels within a customers organization. Our sales cycle may vary based on the industry
in which the potential customer operates and is difficult to predict for any particular
transaction. The length and variability of our sales cycle makes it difficult to predict whether
particular sales will be concluded in any given quarter. While our customers are evaluating our
products and services before they place an order with us, we may incur substantial sales and
marketing and research and development expenses to customize our products to the customers needs.
We may also expend significant management efforts, increase manufacturing capacity and order
long-lead-time components or materials prior to receiving an order. Even after this evaluation
process, a potential customer may not purchase our products. As a result, these long sales cycles
may cause us to incur significant expenses without ever receiving revenue to offset those expenses.
We do not have long-term or recurring commitments with most of our customers and may be
unable to retain existing customers, attract new customers or replace departing customers
with new customers that can provide comparable revenues.
Because we generally do not obtain firm, long-term volume purchase commitments from our
customers, many of our contracts and commitments from our customers are short-term or
non-recurring. For example, most of PowerSecures revenues are derived on a non-recurring, project
by project basis, and there is no assurance that its revenues and business will continue to grow.
In addition, customer orders can be canceled or rescheduled and volume levels can be reduced. We
cannot assure you that our customers will continue to use our products and services or that we will
be able to replace, in a timely or effective manner, canceled, delayed or reduced orders with new
business that generates comparable revenues. Further, we cannot assure you that our current
customers will continue to generate consistent amounts of revenues over time. Our failure to
maintain and expand our customer relationships customers would materially and adversely affect our
business and results of operations.
If we are unable to develop new and enhanced products and services that achieve market
acceptance in a timely manner, our operating results and competitive position could be
harmed.
Our future success will depend on our ability to develop new and enhanced products and
services that achieve market acceptance in a timely and cost-effective manner. The development of
technology is often complex, and we occasionally have experienced delays in completing the
development and introduction of new products and services and enhancements thereof. Successful
development and market acceptance of our products and services depends on a number of factors,
including:
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changing requirements of customers; |
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accurate prediction of market requirements; |
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timely completion and introduction of new designs; |
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quality, price, performance and use of our products; |
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availability, quality, price and performance of competing products, services and technologies; |
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our customer service and support capabilities and responsiveness; |
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successful development of our relationships with existing and potential customers; and |
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changes in technology, industry standards or end-user preferences. |
We cannot provide assurance that products and services that we have recently developed or may
develop in the future will achieve market acceptance. If our new products and services fail to
achieve market acceptance, or if we fail to develop new or enhanced products and services that
achieve market acceptance, our growth prospects, operating results and competitive position could
be adversely affected.
From time to time we depend on revenues from significant purchase commitments, and any loss,
cancellation, reduction or delay in these purchase commitments could harm our business and
operating results.
From time to time, our subsidiaries have derived a material portion of their revenues from one
or more significant customers or purchase commitments. For example, in fiscal 2003 Metretek
Florida had a significant purchase order from one large customer that did not recur, which
adversely affected our operating results in fiscal 2004. In fiscal 2004, we had one customer that
was responsible for approximately 15% of our consolidated revenues. Also, PowerSecure from time to
time receives significant, non-recurring purchase orders from customers. If such commitments were
to be terminated or fail to recur, our revenues and net income would significantly decline. Our
success will depend on our continued ability to develop and manage relationships with significant
customers and generate recurring revenues from them. We cannot be sure that we will be able to
retain our largest customers, that we will be able to attract additional large customers, or that
our existing customers will continue to purchase our products and services in the same amounts as
in prior years. Our business and operating results would be adversely affected by:
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the loss of one or more large customers; |
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any reduction or delay in sales to these customers; |
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the failure of large purchase commitments to be renewed or to recur; |
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our inability to successfully develop relationships with additional customers; or |
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future price concessions that we may have to make to these customers. |
Rapid technological changes may prevent us from remaining current with our technological
resources and maintaining competitive product and service offerings.
The markets in which our businesses operate are characterized by rapid technological change,
frequent introductions of new and enhanced products and services, evolving industry standards and
changes in customer needs. Significant technological changes could render our existing and planned
new products, services and technology obsolete. Our future success will depend, in large part,
upon our ability to:
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effectively use and develop leading technologies; |
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continue to develop our technical expertise; |
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enhance our current products and services; |
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develop new products and services that meet changing customer needs; and |
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respond to emerging industry standards and technological changes in a cost-effective manner. |
If we are unable to successfully respond to these developments or if we do not respond to them
in a cost-effective manner, then our business will be materially and adversely affected. We cannot
assure you that we will be successful in responding to changing technology or market needs. In
addition, products, services and technologies developed by others may render our products, services
and technologies uncompetitive or obsolete.
Even if we do successfully respond to technological advances and emerging industry standards,
the integration of new technology may require substantial time and expense, and we cannot assure
you that we will succeed in adapting our products, services and technology in a timely and
cost-effective manner. We may
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experience financial or technical difficulties or limitations that could prevent us from
introducing new or enhanced products or services. Furthermore, any of these new or enhanced
products, services and technology could contain problems that are discovered after they are
introduced. We may need to significantly modify the design of these products and services to
correct problems. Rapidly changing technology and operating systems may impede market acceptance
of our products, services and technology. Our business could be materially and adversely affected
if we experience difficulties in introducing new or enhanced services and products or if these
products and services are not received favorably by our customers.
Development and enhancement of our products and services will require significant additional
expenses and could strain our management, financial and operational resources. The lack of market
acceptance of our products or services or our inability to generate sufficient revenues from this
development or enhancements to offset their costs could have a material adverse effect on our
business. In the past, we have experienced delays in releasing new products and services and
enhancements, and we may experience similar delays in the future. These delays or problems in the
installation of implementation of our new products and services and enhancements may cause
customers to forego purchases of our products and services to purchase those of our competitors.
If we are unable to continue to attract and retain key personnel, our business will be
materially and adversely affected.
We believe our future success will depend in large part upon our ability to attract and retain
highly qualified technical, managerial, sales, marketing, finance and operations personnel.
Competition for qualified personnel is intense, and we cannot assure you that we will be able to
attract and retain these key employees in the future. The loss of the services of any of our key
personnel could have a material adverse effect on our business. Although we have entered into
employment agreements with some of our executive officers, we generally do not have employment
contracts with our other key employees. In addition, we do not have key person life insurance for
most of our key personnel. We cannot assure you that we will be able to retain our current key
personnel or that we will be able attract or retain other highly qualified personnel in the future.
We have from time to time in the past experienced, and we expect in the future to continue to
experience, difficulty in hiring and retaining highly skilled employees with appropriate
qualifications. If we are unable to attract and retain highly qualified personnel, our business
could be materially and adversely affected.
We face intense competition in the markets for our products, services and technology, and if
we cannot successfully compete in those markets, our business will be materially and
adversely affected.
The markets for our products, services and technology are intensely competitive and subject to
rapidly changing technology, new competing products and services, frequent performance improvements
and evolving industry standards. We expect the intensity of competition to increase in the future
because the growth potential and deregulatory environment of the energy market have attracted and
are anticipated to continue to attract many new competitors, including new businesses as well as
established businesses from different industries. Competition may also increase as a result of
industry consolidation. As a result of increased competition, we may have to reduce the price of
our products and services, and we may experience reduced gross margins and loss of market share,
which could significantly reduce our future revenues and operating results.
Many of our existing competitors, as well as a number of potential new competitors, have
longer operating histories, greater name recognition, larger customer bases and significantly
greater financial, technical, marketing, manufacturing and other resources than we do. This may
enable our competitors to respond more quickly to new or emerging technologies and changes in
customer requirements or preferences and to devote greater resources to the development, promotion
and sale of their products and services than we can. Our competitors may be able to undertake more
extensive marketing campaigns, adopt more aggressive pricing policies and make more attractive
offers to potential employees, customers, strategic partners and suppliers and vendors than we can.
Our competitors may develop products and services that are equal or superior to the products and
services offered by us or that achieve greater market acceptance than our products do. In
addition, current and potential competitors have established or may establish cooperative
relationships among themselves or with third parties to improve their ability to address the needs
of our existing and prospective customers. As a result, it is possible that new competitors may
emerge and rapidly acquire significant market share or impede our ability to acquire market share
in new markets. We cannot assure you that we will have the financial resources, technical
expertise, portfolio of products and services or marketing and support capabilities to compete
successfully in the future. Our inability to compete successfully or to timely respond to market
demands or changes would have a material adverse effect on
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our business, conditions and results of operations.
Downturns in general economic and market conditions could materially and adversely affect
our business.
There is potential for a downturn in general economic and market conditions. In recent years,
some segments of the economy, including the technology industry in particular, have experienced
significant economic downturns characterized by decreased product demand, price erosion, work
slowdowns and layoffs. Moreover, there is increasing uncertainty in the energy and technology
markets attributed to many factors, including international terrorism and strife, global economic
conditions and strong competitive forces. Our future results of operations may experience
substantial fluctuations from period to period as a consequence of these factors, and such
conditions and other factors affecting capital spending may affect the timing of orders from major
customers. An economic downturn coupled with a decline in our revenues could adversely affect our
ability meet our capital requirement, support our working capital requirements and growth
objectives, maintain our existing financing arrangements, or otherwise adversely affect our
business, financial condition and results of operations. As a result, any economic downturns in
general or in our markets, particularly those affecting industrial and commercial users of natural
gas and electricity, would have a material adverse effect on our business, cash flows, financial
condition and results of operations.
If we fail to effectively manage our future growth, our ability to market and sell our
products and services and to develop new products and services may be adversely affected.
We must plan and manage our growth effectively in order to offer our products and services and
achieve revenue growth and profitability in a rapidly evolving market. Our future growth will
place a significant strain on our management systems and resources. If we are not able to
effectively manage our growth in the future, our business may be materially and adversely affected.
Changes in our product mix could materially and adversely affect our business.
The margins on our revenues from some of our product and service offerings is higher than the
margins on some of our other product and service offerings. In addition, we cannot currently
accurately estimate the margins of some of our new and developing products and services due to
their limited operating history. Our new products and services may have lower margins than our
current products and services. If in the future we derive a proportionately greater percentage of
our revenues from lower margin products and services, then our overall margins on our total
revenues will decrease and, accordingly, will result in lower net income, or higher net losses, and
less cash flow on the same amount of revenues.
Our management of MM 1995-2, a private program, presents risks to us.
MGT is our subsidiary that manages and holds a minority ownership interest in MM 1995-2, a
private program that owns and operates four oil and gas production water disposal facilities.
While MGT does not intend to form any new private programs, it may from time to time increase its
economic interest in the program or initiate or manage actions intended to expand the programs
assets or activities. This program was financed by a private placement of equity interests raising
capital to acquire the assets and business operated by the program. Our management of this program
presents risks to us, including:
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lawsuits by investors in this program who become dissatisfied with the results of
the program; |
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material adverse changes in the business, results of operations and financial
condition of the program due to events, conditions and factors outside of our control,
such as general and local conditions affecting the oil and gas market generally and the
revenues of the program specifically; |
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risks inherent in managing a program and taking significant actions that affect its investors; |
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changes in the regulatory environment relating to the program; |
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reliance upon significant suppliers and customers by the program; |
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hazards of oil production water disposal facilities, including environmental hazards; and |
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changes in technology. |
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If any of these risks materialize and we are unsuccessful in addressing these risks, our
financial condition and results of operations could be materially and adversely affected.
Our international sales activities are subject to many risks and uncertainties that could
adversely affect our operating results if they materialize.
We market and sell some of our products and services in international markets. While sales
into international markets generated only approximately 2% of our consolidated revenues in fiscal
2004 and 3% in fiscal 2003 and fiscal 2002, one component of our strategy for future growth
involves the expansion of our products and services into new international markets and the
expansion of our marketing efforts in our current international markets. This expansion will
require significant management attention and financial resources to establish additional offices,
hire additional personnel, localize and market products and services in foreign markets and develop
relationships with international service providers. However, we have only limited experience in
international operations, including in developing localized versions of our products and services
and in developing relationships with international service providers. We cannot provide any
assurance that we will be successful in expanding our international operations, or that revenues
from international operations will be sufficient to offset these additional costs. If revenues
from international operations are not adequate to offset the additional expense from expanding
these international operations, our business could be materially and adversely affected.
We are exposed to several risks inherent in conducting business on an international level that
could result in increased expenses, or could limit our ability to generate revenues, including:
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difficulties in collecting international accounts receivable and longer collection periods; |
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the impact of local economic conditions and practices; |
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difficulties in staffing and managing foreign operations; |
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difficulties in complying with foreign regulatory and commercial requirements; |
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increased costs associated with maintaining international marketing efforts; |
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fluctuations in currency exchange rates; |
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potential adverse tax consequences; |
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adverse changes in applicable laws and regulatory requirements; |
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import and export restrictions; |
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export controls relating to technology; |
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tariffs and other trade barriers; |
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political and economic instability; |
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reduced protection for intellectual property rights; |
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cultural and language difficulties; |
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the potential exchange and repatriation of foreign earnings; and |
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the localization and translation of products and services. |
Our success in expanding our international sales activities will depend in large part on our
ability to anticipate and effectively manage these and other risks, many of which are outside of
our control. Any of these risks could materially and adversely affect our international operations
and, consequently, our operating results. We cannot provide any assurance that we will be able to
successfully market, sell and deliver our products and services in foreign markets.
We may be unable to acquire other businesses, technology or companies, or to form strategic
alliances and relationships, or to successfully realize the benefits of any acquisition or
alliance.
In the past, we have grown by acquiring complimentary businesses, technologies, services and
products and entering into strategic alliances and relationships with complimentary businesses. We
evaluate potential acquisition
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opportunities from time to time, including those that could be material in size and scope. As part
of our growth strategy, we intend to continue to evaluate potential acquisitions, investment
opportunities and strategic alliances on an ongoing basis as they present themselves to facilitate
our ability to enhance our existing products, services and technology, and to introduce new
products, services and technology, on a timely basis. However, we do not know if we will be able
to identify any future opportunities that we believe will be beneficial for us. Even if we are
able to identify an appropriate acquisition opportunity, we may not be able to successfully finance
the acquisition. If we are unable to identify, finance or obtain the benefits of future
acquisitions and alliances, our growth may be impaired and our business may be adversely affected.
Any future acquisition involves risks commonly encountered in business relationships,
including:
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difficulties in assimilating and integrating the operations, personnel,
technologies, products and services of the acquired business; |
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the technologies, products or businesses that we acquire may not achieve expected
levels of revenue, profitability, benefits or productivity; |
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difficulties in retaining, training, motivating and integrating key personnel; |
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diversion of managements time and resources away from our normal daily operations; |
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difficulties in successfully incorporating licensed or acquired technology and
rights into our product and service offerings; |
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difficulties in maintaining uniform standards, controls, procedures and policies
within the combined organizations; |
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difficulties in retaining relationships with customers, employees and suppliers of
the acquired company; |
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risks of entering markets in which we have no or limited direct prior experience; |
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potential disruptions of our ongoing businesses; and |
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unexpected costs and unknown liabilities associated with the acquisitions. |
For these reasons, future acquisitions could materially and adversely affect our existing
businesses. Moreover, we cannot predict the accounting treatment of any acquisition, in part
because we cannot be certain whether current accounting regulations, conventions or interpretations
will prevail in the future.
In addition, to finance any future acquisitions, it may be necessary for us to incur
additional indebtedness or raise additional funds through public or private financings. These
financings may not be available to us at all, or if available may not be available on terms
satisfactory to us or to those whose consents are required for such financings. Available equity
or debt financings may materially and adversely affect our business and operations and, in the case
of equity financings, may significantly dilute the percentage ownership interests of our
stockholders.
We cannot assure you that we will make any additional acquisitions or that any acquisitions,
if made, will be successful, will assist us in the accomplishment of our business strategy, or will
generate sufficient revenues to offset the associated costs and other adverse effects or will
otherwise result in us receiving the intended benefits of the acquisition. In addition, we cannot
assure you that any acquisition of new businesses or technology will lead to the successful
development of new or enhanced products and services, or that any new or enhanced products and
services, if developed, will achieve market acceptance or prove to be profitable.
If we fail to adequately protect our intellectual property rights, we could lose important
proprietary technology, which could materially and adversely affect our business.
Our success and ability to compete depends, in substantial part, upon our ability to develop
and protect our proprietary technology and intellectual property rights to distinguish our
products, services and technology from those of our competitors. The unauthorized use of our
intellectual property rights and proprietary technologies by others could materially harm our
business. We rely primarily on a combination of copyright, trademark and trade secret laws, along
with confidentiality agreements, contractual provisions and licensing arrangements, to establish
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and protect our intellectual property rights. Although we hold copyrights and trademarks in our
business, and we have applied for a patent and the registration of a number of new trademarks and
service marks and intend to introduce new trademarks and service marks, we believe that the success
of our business depends more upon our proprietary technology, information, processes and know-how
than on patents or trademark registrations. In addition, much of our proprietary information and
technology may not be patentable. We may not be successful in obtaining any patents or in
registering new marks.
Despite our efforts to protect our intellectual property rights, existing laws afford only
limited protection, and our actions may be inadequate to protect our rights or to prevent others
from claiming violations of their proprietary rights. Unauthorized third parties may attempt to
copy, reverse engineer or otherwise obtain, use or exploit aspects of our products and services,
develop similar technology independently, or otherwise obtain and use information that we regard as
proprietary. We cannot assure you that our competitors will not independently develop technology
similar or superior to our technology or design around our intellectual property. In addition, the
laws of some foreign countries may not protect our proprietary rights as fully or in the same
manner as the laws of the United States.
We may need to resort to litigation to enforce our intellectual property rights, to protect
our trade secrets, and to determine the validity and scope of other companies proprietary rights
in the future. However, litigation could result in significant costs or in the diversion of
management and financial resources. We cannot assure you that any such litigation will be
successful or that we will prevail over counterclaims against us. Our failure to protect any of
our important intellectual property rights or any litigation that we resort to in order to enforce
those rights could materially and adversely affect our business.
If we face claims of intellectual property infringement by third parties, we could encounter
expensive litigation, be liable for significant damages or incur restrictions on our ability
to sell our products and services.
Although we are not aware of any present infringement of our products or technologies on the
intellectual property rights of others, we cannot be certain that our products, services and
technologies do not or in the future will not infringe on the valid intellectual property rights
held by third parties. In addition, we cannot assure you that third parties will not claim that we
have infringed their intellectual property rights. We may incur substantial expenses in litigation
defending against any third party infringement claims, regardless of their merit. Successful
infringement claims against us could result in substantial monetary liability, require us to enter
into royalty or licensing arrangements, or otherwise materially disrupt the conduct of our
business. In addition, even if we prevail on these claims, this litigation could be time-consuming
and expensive to defend or settle, and could result in the diversion of our time and attention,
which could materially and adversely affect our business.
In recent years, there has been a significant amount of litigation in the United States
involving patents and other intellectual property rights. In the future, we may be a party to
litigation as a result of an alleged infringement of others intellectual property. These claims
and any resulting lawsuits, if successful, could subject us to significant liability for damages
and invalidation of our proprietary rights. These lawsuits, regardless of their success, would
likely be time-consuming and expensive to resolve and would divert management time and attention.
Any potential intellectual property litigation also could force us to do one or more of the
following:
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stop selling, incorporating or using our products and services that use the
infringed intellectual property; |
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obtain from the owner of the infringed intellectual property right a license to sell
or use the relevant technology, which license may not be available on commercially
reasonable terms, or at all; or |
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redesign the products and services that use the technology. |
If we are forced to take any of these actions, our business may be seriously harmed. Although
we carry general liability insurance, our insurance may not cover potential claims of this type or
may not be adequate to indemnify us for all liability that may be imposed.
We face some risks that are inherent in natural gas and electrical operations.
Some of our operations are subject to the hazards and risks inherent in the servicing and
operation of
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natural gas assets, including encountering unexpected pressures, explosions, fire, natural
disasters, blowouts, cratering and pipeline ruptures, as well as in the manufacture, sale and
operation of electrical equipment such as PowerSecures distributed generation system, including
electrical shocks, which hazards and risks could result in personal injuries, loss of life,
environmental damage and other damage to our properties and the properties of others. These
operations involve numerous financial, business, regulatory, environmental, operating and legal
risks. Damages occurring as a result of these risks may give rise to product liability claims
against us. We have product liability insurance generally providing up to $6 million coverage per
occurrence and $7 million annual aggregate coverage. Although we believe that our insurance is
adequate and customary for companies of our size that are engaged in operations similar to ours,
losses due to risks and uncertainties could occur for uninsurable or uninsured risks or could
exceed our insurance coverage. Therefore, the occurrence of a significant adverse effect that is
not fully covered by insurance could have a material and adverse effect on our business. In
addition, we cannot assure you that we will be able to maintain adequate insurance in the future at
reasonable rates.
Some of PowerSecures long-term turn-key contracts subject us to risks.
Some of PowerSecures contracts for turn-key distributed generation projects have a term of
many years, during which time some risks to its business may arise due to its obligations under
those contracts, even though PowerSecure believes it has mitigated those risks. For example,
PowerSecure is responsible for full maintenance on the generators and switchgear during the term of
the contract, but it has set aside reserves expected to be sufficient to cover its maintenance
obligations and has purchased maintenance packages designed to cover maintenance on the generators.
In addition, changes in circumstances that were not contemplated at the time of the contract could
exposure PowerSecure to unanticipated risks or to protracted or costly dispute resolution.
We depend on sole source or limited source suppliers for some of the key components and
materials in our products, which makes us susceptible to supply shortages or price increases
that could adversely affect our business.
We depend on sole or limited source suppliers for key components and materials for some of our
products such as generators, and if we are unable to obtain these components on a timely basis, we
will not be able to deliver our products to customers. Also, we cannot guarantee that any of the
parts or components that we purchase, if available at all, will be of adequate quality or that the
prices we pay for these parts or components will not increase. For example, PowerSecure is
dependent upon on obtaining a timely and cost-effective supply of generators for its distributed
generation system, and from time to time these generators are in short supply, affecting the timing
and cost of the generators. We may experience delays in production if the supply of any critical
components is interrupted or reduced and we have failed to identify an alternative vendor or if
there is a significant increase in the cost of such components, which could materially and
adversely affect our business and operations.
We could become subject to burdensome government regulation that affects our ability to
offer our products and services or that affects demand for our products and services.
Our business operations are subject to varying degrees of federal, state, local and foreign
laws and regulations. Regulatory agencies may impose special requirements for implementation and
operation of our products, services or technologies that may significantly impact or even eliminate
some of our target markets. We may incur material costs or liabilities in complying with
government regulations. In addition, potentially significant laws, regulations and requirements
may be adopted or imposed in the future. Furthermore, some of our customers must comply with
numerous laws and regulations. The modification or adoption of future laws and regulations could
adversely affect our business and our ability to continually modify or alter our methods of
operations at reasonable costs. We cannot provide any assurances that we will be able, for
financial or other reasons, to comply with all applicable laws and regulations. If we fail to
comply with these laws and regulations, we could become subject to substantial penalties which
could materially and adversely affect our business.
Our business could suffer if we cannot maintain and expand our current strategic alliances
and develop new alliances.
One element of our business strategy is the development of corporate relationships such as
strategic alliances with other companies to provide products and services to existing and new
markets and to develop new products and services and enhancements to existing products and
services. We believe that our success in the future in penetrating new markets will depend in
large part on our ability to maintain these relationships and to cultivate
19
additional or alternative relationships. However, we cannot assure you that we will be able
to develop new corporate relationships, or that these relationships will be successful in achieving
their purposes. Our failure to continue our existing corporate relationships and develop new
relationships could materially and adversely affect our business.
Terrorist activities and resulting military and other actions could adversely affect our
business.
The terrorist attacks on September 11, 2001 disrupted commerce throughout the world. In
response to such attacks, the U.S. is actively using military force to pursue those behind these
attacks and initiating broader actions against global terrorism. The continued threat of terrorism
throughout the world, the escalation of military action, and heightened security measures in
response to such threats may cause significant disruption to commerce throughout the world. To the
extent that such disruptions result in reductions in capital expenditures or spending on
technology, longer sales cycles, deferral or delay of customer orders, or an inability to
effectively market our products or services, our business and results of operations could be
materially and adversely affected.
Changes in laws, regulations and financial accounting standards could cause us to incur
increased costs and expenses, materially and adversely affecting our business and our
reported results of operations.
Recently enacted changes in the laws and regulations affecting public companies,
especially those pertaining to corporate governance and public disclosure such as the
Sarbanes-Oxley Act of 2002 and related SEC regulations, have caused us to incur increased costs of
compliance and have resulted in changes in accounting standards or accepted practices within our
industry. New laws, regulations and accounting standards, as well as the questioning of, or
changes to, currently accepted accounting practices may increase our costs and thus adversely
affect our reported financial results, which could have an adverse effect on our stock price. New
laws, rules and regulations could also make it more difficult for us to obtain certain types of
insurance, including director and officer liability insurance, forcing us to accept reduced policy
limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
The impact of these events could also make it more difficult for us to attract and retain qualified
persons to serve on our board of directors or as our executive officers.
Changes in accounting rules for stock-based compensation may adversely affect our operating
results, our stock price and our competitiveness in the employee marketplace.
We have a history of using employee stock options and other stock-based compensation to
hire, motivate and retain our employees. In December 2004, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 123R, Share-Based Payment, which now
requires us, since January 1, 2006, to measure compensation costs for all stock-based compensation
(including stock options) at fair value and to recognize these costs as expenses in our statements
of income. The recognition of these expenses in our statements of income will have a negative
effect on our earnings per share, which could negatively impact our future stock price. In
addition, if we reduce or alter our use of stock-based compensation to minimize the recognition of
these expenses, our ability to recruit, motivate and retain employees may be impaired, which could
put us at a competitive disadvantage in the employee marketplace.
There is no assurance that we will be able to implement, in a timely manner, the internal
controls procedures necessary to allow our management to report on the effectiveness of our
internal controls.
Under Section 404 of the Sarbanes-Oxley Act of 2002, we will be required to furnish an
internal controls report of managements assessment of the effectiveness of our internal controls
as part of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2006, based upon our recent share price. Our
independent registered public accounting firm will then be required to attest to, and report on,
our assessment. In order to issue our report, our management must document both the design of our
internal controls and the testing processes that support managements evaluation and conclusion.
Our management has begun the necessary processes and procedures for issuing its report on our
internal controls. However, there can be no assurance that we will be able to complete the work
necessary for our management to issue its management report in a timely manner, or that management
will be able to report that our internal control over financial reporting is effective.
Risks Related to this Offering
As a result of their beneficial ownership of a large percentage of our common stock, our
directors,
20
executive officers and significant stockholders could exert significant influence over
matters requiring stockholder approval.
As of March 1, 2006, our executive officers, directors and 5% or greater stockholders
beneficially owned, in the aggregate, approximately 38% of our outstanding common stock, assuming
they exercise or convert all stock options and warrants that are exercisable or convertible within
60 days of that date. As a result, these stockholders could, as a practical matter, exercise a
significant level of control over matters requiring approval by our stockholders, including the
election of directors and the approval of mergers, sales of substantially all of our assets and
other significant corporate transactions. The interests of these stockholders may differ from your
interests, and the concentration of control may limit your ability to influence corporate matters.
In addition, this concentration of stock ownership may have the effect of discouraging, delaying or
preventing a change in control of us, adversely affecting the market price of our common stock.
Virtually all of our shares are eligible for future sale by our current stockholders, and
significant sales of these shares could result in a decline in our stock price.
If our stockholders sell a significant number of shares of our common stock in the public
market, including shares issuable upon the exercise of outstanding options, warrants and other
rights, or if there is a perception that these sales could occur, then the market price of our
common stock could fall. These sales also might make it more difficult for us to sell equity
securities in the future at a time and price that we deem appropriate, if we need to raise
additional capital.
As
of March 1, 2006, 13,428,918 shares of common stock were outstanding. On that date, options
to purchase 2,282,679 shares of common stock were outstanding, and shares that may be acquired upon
exercise of these stock options are eligible for sale on the public market from time to time
subject to vesting. Also, on that date, warrants to purchase 90,001 shares of common stock were
outstanding but not exercisable. The resale of all shares underlying these options and warrants
are covered by currently effective registration statements. The exercise or conversion of
outstanding options, warrants and other rights to purchase our common stock will dilute the
remaining ownership of other holders of our common stock. In addition, the sale in the public
market of a significant number of these shares issuable upon the exercise of options, warrants and
other rights, or the perception that such sales could occur, could cause the price of the common
stock to decline.
Our charter documents and our stockholder rights plan, as well as Delaware law, contain
anti-takeover provisions that could discourage or prevent a third-party acquisition of our
common stock, even if an acquisition would be beneficial to our stockholders.
Some provisions in our second restated certificate of incorporation, our amended and restated
by-laws, and our stockholder rights plan, as well as some provisions of Delaware law, could have
the effect of discouraging, delaying or preventing a third party from attempting to acquire us,
even if doing so would be beneficial to stockholders. These provisions could also limit the price
that investors might be willing to pay in the future for shares of our common stock. These
provisions include:
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a classified board of directors in which only approximately one-third of the total
Board members are elected at each annual meeting; |
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the existence of large amounts of authorized but unissued shares of our common stock
and our preferred stock; |
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authority for our board of directors to issue shares of our common stock and our
preferred stock, and to determine the price, voting and other rights, preferences,
privileges and restrictions of undesignated shares of preferred stock, without any vote
by or approval of our stockholders; |
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super-majority voting requirements to effect material amendments to our second
restated certificate and by-laws; |
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limiting the persons who may call special meetings of stockholders; |
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prohibiting stockholders from acting by written consent without a meeting; |
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the dilutive effects of our stockholders rights plan to a potential acquirer; |
21
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a fair price provision that sets minimum price requirements for potential acquirers
under certain conditions; |
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anti-greenmail provisions which limit our ability to repurchase shares of common
stock from significant stockholders; |
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restrictions under Delaware law on mergers and other business combinations between
us and any 15% stockholders; and |
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advance notice requirements for director nominations and for stockholder proposals. |
In addition, we have entered into employment agreements with certain executive officers and
other employees which, among other things, include severance and changes in control provisions.
Our stockholder rights agreement makes effecting a change of control more difficult, which
may discourage offers for shares of our common stock.
Our board of directors has adopted an amended and restated rights agreement. Our rights
agreement may have the effect of delaying, deterring, or preventing changes in our management or
control of us, which may discourage potential acquirers who otherwise might wish to acquire us
without the consent of the board of directors. Under the rights plan, if a person or group
acquires 15% or more of our common stock, all holders of rights (other than the acquiring
stockholder) may, upon payment of the purchase price then in effect, purchase common stock having a
value of twice the purchase price. In the event that we are involved in a merger or other similar
transaction where we are not the surviving corporation, all holders of rights (other than the
acquiring stockholder) shall be entitled, upon payment of the then in effect purchase price, to
purchase common stock of the surviving corporation having a value of twice the purchase price. The
rights will expire on November 30, 2011, unless we extend the terms of the rights agreement or we
earlier redeem or exchange the rights.
We have not in the past and we do not currently intend to pay dividends on our common stock,
and even if we change our intentions our ability to pay dividends is limited.
We have never declared or paid any cash dividends on our common stock. Therefore, a
stockholder will not experience a return on its investment in our common stock without selling its
shares, because we currently intend on retaining any future earnings to fund our growth and do not
expect to pay dividends in the foreseeable future on the common stock.
Under Delaware law, we are not permitted to make a distribution to our stockholders, including
dividends on our capital stock, if, after giving effect to the payment, we would not be able to pay
our debts as they become due in the usual course of business or if our total assets would be less
than the sum of our total liabilities plus the amount which would be needed if we were to be
dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of
stockholders whose preferential rights are superior to those receiving the distribution.
We currently intend to retain all future earnings, if any, for use in the operation and
expansion of our business and for the servicing and repayment of indebtedness. As a holding
company with no independent operations, our ability to pay dividends is dependant upon the receipt
of dividends or other payments from our subsidiaries. The terms of our credit facility limit our
ability to pay dividends by prohibiting the payment of dividends by our subsidiaries without the
consent of the lender. Future dividends, if any, will be determined by our Board of Directors,
based upon our earnings, financial condition, capital resources, capital requirements, charter
restrictions, contractual restrictions and such other factors as our board of directors deems
relevant.
Our stock price is subject to extreme price and volume fluctuations, which could adversely
affect an investment in our stock.
The market price and volume of our common stock has in the past been, and in the future is
likely to continue to be, highly volatile. The stock market in general has been experiencing
extreme price and volume fluctuations for years. The market prices of securities of technology
companies have been especially volatile. A number of factors could cause wide fluctuations in the
market price and trading volume of our common stock in the future, including:
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actual or anticipated variations in our results of operations; |
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announcements of technological innovations; |
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changes in, or the failure by us to meet, securities analysts estimates and expectations; |
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the receipt or loss of significant customer orders; |
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introduction of new products and services by us or our competitors; |
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conditions or trends in the energy and technology industries in general, and in the
particular markets we service; |
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announcements by us or our competitors of significant technical innovations,
products, services, contracts, acquisitions, strategic relationships, joint ventures or
capital commitments; |
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the lower coverage by securities analysts and the media of issuers with securities
trading on the American Stock Exchange; |
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announcements by us or our competitors of the success or status of our business; |
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changes in the market valuation of other energy or technology companies; |
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additions or departures of key personnel; |
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general economic, business and market conditions; and |
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sales of our common stock by our directors, executive officers and significant stockholders. |
Many of these factors are beyond our control. The occurrence of any one or more of these
factors could cause the market price of our common stock to fall, regardless of our operating
performance.
In addition, broad fluctuations in price and volume have been unrelated or disproportionate to
operating performance, both of the market in general and of us in particular. Any significant
fluctuations in the future might result in a material decline in the market price of our common
stock. In the past, following periods of volatility in the market price of a companys securities,
securities class action litigation has often been brought against that company. We may become
involved in this type of litigation in the future. Securities litigation is often expensive and
could divert managements attention and resources, which could have a material adverse effect on
our business, even if we ultimately prevail in the litigation.
We may issue shares of preferred stock that could dilute the interests of holders of our
common stock.
Our charter currently authorizes our board of directors to issue up to 2,000,000 shares of
preferred stock on terms to be fixed by the Board of Directors. The terms of our common stock do
not limit the issuance of shares of preferred stock. The issuance of shares of preferred stock
could dilute the interests of holders of our common stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this prospectus contain
forward-looking statements within the meaning of and made under the safe harbor provisions of
Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are all statements other than statements of historical facts, including
statements that refer to plans, intentions, objectives, goals, strategies, hopes, beliefs,
projections, expectations or other characterizations of future events or performance, and
assumptions underlying the foregoing. The words may, could, should, would, will,
project, intend, continue, believe, anticipate, estimate, forecast, expect, plan,
potential, opportunity and scheduled, variations of such words, and other similar
expressions are often, but not always, used to identify forward-looking statements. Examples of
forward-looking statements include, but are not limited to, statements about the following:
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our prospects, including our future revenues, expenses, net income, margins,
profitability, cash flow, liquidity, financial condition and results of operations; |
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our products and services and the markets therefor, including market position,
market share, market demand and benefits to customers; |
23
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our ability to successfully develop, operate and grow our businesses; |
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our business plans, strategies, goals and objectives; |
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the sufficiency of our capital resources, including our cash and cash equivalents,
funds generated from operations, available borrowings under our credit arrangements and
other capital resources, to meet our future working capital, capital expenditure, debt
service and business growth needs; |
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industry trends and customer preferences; |
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the nature and intensity of our competition, and our ability to successfully compete in our markets; |
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business acquisitions, combinations, sales, alliances, ventures and other similar
business transactions and relationships; |
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the effects on our business, financial condition and results of operations of the
resolution of litigation and claims that arise from time to time; and |
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future economic, business, market and regulatory conditions. |
Any forward-looking statements we make are based on our current plans, intentions, objectives,
goals, strategies, hopes, beliefs, projections and expectations, as well as assumptions made by and
information currently available to management. You are cautioned not to place undue reliance on
any forward-looking statements, any or all of which could turn out to be wrong. Forward-looking
statements are not guarantees of future performance or events, but are subject to and qualified by
substantial risks, uncertainties and other factors, which are difficult to predict and are often
beyond our control. Forward-looking statements will be affected by assumptions we might make that
do not materialize or prove to be incorrect and by known and unknown risks, uncertainties and other
factors that could cause actual results to differ materially from those expressed, anticipated or
implied by such forward-looking statements. These risks, uncertainties and other factors include,
but are not limited to, those described in Risk Factors, or as well as other risks, uncertainties
and factors discussed elsewhere in this prospectus, in documents that we include as exhibits to or
incorporate by reference in this prospectus, and in other reports and documents we from time to
time file with or furnish to the SEC.
Any forward-looking statements contained in this prospectus speak only as of the date of this
prospectus. We do not intend, and we undertake no duty or obligation, to update or revise any
forward-looking statement for any reason, whether as a result of changes in our expectations or the
underlying assumptions, the receipt of new information, the occurrence of future or unanticipated
events, circumstances or conditions or otherwise.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares offered under this
prospectus by the selling stockholders. All proceeds from the sale of the shares offered under
this prospectus will be for the account of the selling stockholders listed below in Selling
Stockholders.
SELLING STOCKHOLDERS
References in this prospectus to the selling stockholders include the persons listed in the
table below and any donees, pledgees, transferees or other successors-in-interest selling shares
received from a selling shareholder as a gift, pledge, partnership distribution or other transfer
after the date of this prospectus.
All of the shares of common stock offered by the selling stockholders under this prospectus
were issued to the selling stockholders in private placement transactions exempt from the
registration requirements of the Securities Act under Section 4(2) of the Securities Act and Rule
506 of Regulation D promulgated under the Securities Act.
24
On November 22, 2004, we completed the transactions contemplated by stock purchase agreements,
dated as of September 10, 2004, between us and 14 current and former employees of our PowerSecure
subsidiary. Under the stock purchase agreements, we issued 950,000 shares of our common stock in
exchange for the minority 13.9% interest in PowerSecure owned by those employee-shareholders of
PowerSecure. This prospectus covers the resale by the selling stockholders of the 833,650 shares
that remain outstanding as of the date of this prospectus.
The
actual number of shares of common stock covered by this prospectus, and included in the
registration statement of which this prospectus is a part, includes additional shares of common
stock that may be issued as a result of stock splits, stock dividends or similar transactions
relating to our securities.
The
following table sets forth, as of March 1, 2006, except as otherwise stated in the
notes to the table, the following information based on information provided to us by or on behalf
of the selling stockholders:
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the name of each selling shareholder; |
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the number of shares and the percent of common stock beneficially owned by each
selling stockholder; |
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the number of shares that may be offered for sale from time to time by each selling
stockholder under this prospectus; and |
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the number of shares and the percentage of common stock to be beneficially owned by
each selling stockholder assuming the sale of all the shares offered under this
prospectus. |
The shares offered under this prospectus may be offered, sold or otherwise disposed of from
time to time by the selling stockholders. We are not aware of any current agreement, arrangement
or understanding by the selling stockholders with respect to the sale of any shares offered under
this prospectus. Each selling shareholder may decide to sell under this prospectus all, some or
none of the shares listed in the table. Accordingly, we cannot estimate the number of shares that
the selling stockholders will beneficially own after completion of this offering. In addition, the
selling stockholders identified below may have sold, transferred or otherwise disposed of all or a
part of their common stock since the date on which they provided the information regarding their
beneficial ownership.
Beneficial ownership is determined under the rules and regulations of the SEC and generally
includes voting or investment control, but is not necessarily indicative of beneficial ownership
for any other purpose. Unless otherwise indicated below, to our knowledge, each selling
shareholder named in the table below has sole voting and investment power with respect to the
shares shown in the table, except as provided by applicable community property laws. In computing
the number of shares of common stock and the percent of outstanding common stock beneficially owned
by a selling shareholder, beneficial ownership includes any shares issuable under options,
warrants, conversion rights and other rights that are exercisable on
or within 60 days of March 1, 2006. Such shares, however, are not included for purposes of computing the beneficial
ownership of any other selling shareholder. The percentage of beneficial ownership is based upon
13,428,918 shares of common stock outstanding on March 1, 2006.
Information about the selling stockholders may change over time. Any changed information will
be contained in one or more prospectus supplements. Each of the selling stockholders is or was in
the past three years an employee of PowerSecure, including Sidney Hinton, who is the President and
Chief Executive Officer of PowerSecure. Some of this information is based on information provided
by or on behalf of the selling stockholder and, with regard to the beneficial holdings of the
selling stockholder, is accurate only to the extent beneficial holdings information was disclosed
to us by or on behalf of the selling stockholder. Unless otherwise indicated below, to our
knowledge each selling stockholder has sole voting and investment power with respect to the shares
of common stock listed below.
25
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Shares Beneficially |
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Owned |
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Shares Beneficially Owned |
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Prior to Offering |
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After Offering (1) |
Name of Selling |
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Number of Shares |
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Securityholder |
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Number |
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Percent |
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Offered (1) |
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Number |
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Percent |
Sidney Hinton LP (2) |
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805,101 |
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5.9 |
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485,401 |
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319,700 |
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2.4 |
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Mark Martyak (3) |
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94,343 |
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* |
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69,343 |
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25,000 |
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* |
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Stanley W. Timblin (4) |
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174,343 |
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1.3 |
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69,343 |
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105,000 |
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* |
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Brian L. Kisner (5) |
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107,007 |
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* |
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52,007 |
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55,000 |
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* |
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Rhett Ward (6) |
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49,673 |
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* |
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34,673 |
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15,000 |
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* |
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Bill Nantz (7) |
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29,402 |
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* |
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10,402 |
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15,000 |
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* |
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Chris Ellis (8) |
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20,402 |
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* |
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10,402 |
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10,000 |
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* |
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George Williamson (9) |
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16,934 |
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* |
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6,934 |
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10,000 |
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* |
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Ron Gray (10) |
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26,006 |
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* |
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6,934 |
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19,072 |
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* |
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Martin Leibold (11) |
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44,434 |
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* |
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6,934 |
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37,500 |
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* |
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Brian Cail (11) |
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12,094 |
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* |
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6,934 |
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12,160 |
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* |
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Jeffrey W. Timblin |
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129,343 |
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* |
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69,343 |
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60,000 |
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* |
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Greg Kreuziger |
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5,000 |
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* |
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5,000 |
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0 |
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* |
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* |
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Less than 1% |
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(1) |
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Assumes the sale of all of the shares of common stock offered in this prospectus. However,
the selling stockholders may sell all, some or none of the shares offered in this prospectus. |
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(2) |
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Includes 195,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(3) |
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Includes 25,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(4) |
|
Includes 15,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(5) |
|
Includes 55,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(6) |
|
Includes 15,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(7) |
|
Includes 15,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(8) |
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Includes 10,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(9) |
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Includes 10,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(10) |
|
Includes 10,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(11) |
|
Includes 25,000 shares that may be acquired upon the exercise of currently exercisable
stock options. |
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(12) |
|
Includes 5,000 shares that may be acquired upon the exercise of currently exercisable stock
options. |
26
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledgees, donees, transferees, assignees and other
successors-in-interest may, from time to time, offer and sell any or all of the shares of common
stock offered under this prospectus:
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directly; or |
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through underwriters, broker-dealers or agents, who may
receive compensation in the form of discounts,
commissions or concessions from the selling stockholder or from the
purchasers of the shares for whom
it may act as agent. |
The shares may be sold from time to time in one or more transactions at:
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fixed prices, which may be changed; |
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prevailing market prices at the time of sale; |
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varying prices determined at the time of sale; or |
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negotiated prices. |
These sales of the shares may be effected:
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on any national securities exchange or quotation service on which the shares of
our common stock may
be listed or quoted at the time of sale, including the American Stock Exchange; |
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in the over-the-counter market; or |
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otherwise than on such exchanges or services or in the over-the-counter market. |
The selling stockholders may use any of the following methods when selling shares:
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ordinary brokerage transactions and transactions in which the broker-dealer solicits investors; |
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block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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to cover short sales made after the date that the registration statement of which
this prospectus is a part is declared effective by the SEC; |
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through the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise; |
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broker-dealers may agree with the selling stockholders to sell a specified number of
such shares at a stipulated price per share; |
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a combination of any such methods of sale; and |
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any other method permitted by applicable law. |
27
The selling stockholders may also sell any of the shares offered under this prospectus that
qualify for sale under Rule 144 under the Securities Act, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions involved.
The selling stockholders may from time to time pledge or grant a security interest in some or
all of the shares owned by them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell shares of common stock from time to
time under this prospectus, or under a supplement or an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act supplementing or amending the list of
selling stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.
In connection with the sale of our shares, the selling stockholders may enter into hedging
transactions with broker-dealers or other financial institutions, which may in turn engage in short
sales of the shares in the course of hedging the positions they assume. The selling stockholders
may also sell shares of our common stock short and deliver these securities to close out their
short positions, or loan or pledge the shares to broker-dealers that in turn may sell these
securities. The selling stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of shares offered
by this prospectus, which shares such broker-dealer or other financial institution may resell
pursuant to this prospectus (as supplemented or amended to reflect such transaction).
Upon being notified in writing by a selling stockholders that any material arrangement has
been entered into with a broker-dealer for the sale of shares through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, we
will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
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the name of each such selling stockholders and of the participating broker-dealer(s); |
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the number of shares involved; |
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the price at which such the shares were sold; |
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the commissions paid or discounts or concessions allowed to such broker-dealer where applicable; |
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that such broker-dealer did not conduct any investigation to verify the information
set out or incorporated by reference in this prospectus; and |
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other facts material to the transaction. |
In addition, upon being notified in writing by a selling stockholders that a donee, pledgee,
transferee or other successor in interest intends to sell more than 500 shares of common stock, we
will file a supplement to this prospectus, if then required in accordance with applicable
securities law. Any prospectus supplement may also add, update or change any information contained
in this prospectus, including information with the respect to the distribution of the shares.
The selling stockholders also may transfer the shares of common stock in other circumstances,
in which case the donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.
The selling stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be underwriters within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by
28
them may be deemed to be underwriting commissions or discounts under the Securities Act.
Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to
the sale of securities will be paid by the selling stockholders and/or the purchasers. Each
selling shareholder has represented and warranted to us that it acquired the securities subject to
this registration statement in the ordinary course of such selling shareholders business and, at
the time of its purchase of such securities such selling stockholders had no agreements or
understandings, directly or indirectly, with any person to distribute any such securities.
We have advised each selling shareholder that it may not use shares registered on the
registration statement of which this prospectus is a part to cover short sales of common stock made
prior to the date on which the registration statement of which this prospectus is a part shall have
been declared effective by the SEC.
The selling stockholders and any other person participating in in a distribution of the shares
offered under this prospectus will be subject to the applicable provisions of the Securities Act
and Exchange Act, and the rules and regulations thereunder promulgated, including, without
limitation, the anti-manipulation provisions of Regulation M, as applicable to such selling
stockholders in connection with resales of their respective shares under this prospectus, which
provisions may restrict activities of the selling stockholders and limit the timing of purchases
and sales of shares by the selling stockholders. In addition, Regulation M may restrict the
ability of any person engaged in the distribution of the shares to engage in market-making
activities with respect to the particular shares being distributed for a period of up to five
business days prior to the commencement of the distribution. This may affect the marketability of
the shares and the ability of any person or entity to engage in market-making activities with
respect to the shares.
If the selling stockholders use this prospectus for any sale of shares, they will be subject
to the prospectus delivery requirements of the Securities Act. We do not intend, and we assume no
obligation, to deliver any copies of this prospectus.
The shares will be sold only through registered or licensed brokers or dealers if required by
applicable state securities laws. In addition, in some states the shares may not be sold unless
they have been registered or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.
We will pay all expenses related to the registration of the sale of the shares offered under
this prospectus by the selling stockholders. The selling stockholders will pay all commissions,
discounts, concessions and other compensation and selling expenses attributable to the sale of the
shares. The selling stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against liabilities related to the offer
and sale of the shares, including liabilities arising under the Securities Act, or to contribute to
payments a broker-dealer or agent may be required to make in respect of these liabilities.
To our knowledge, there are currently no plans, arrangements or understandings between the
selling stockholder and any underwriter, broker-dealer or agent regarding the sale of the shares by
the selling stockholders. The selling stockholders will act independently of us and each other,
except as discussed in the notes to the table in Selling stockholders, in making decisions
regarding the timing, manner and size of each sale. The selling stockholders are not obligated to,
and we cannot assure you that the selling stockholders will, sell all or any of the shares offered
under this prospectus.
LEGAL MATTERS
The validity of the common stock offered under this prospectus has been passed upon for us by
Kegler, Brown, Hill & Ritter Co., L.P.A., Columbus, Ohio.
29
EXPERTS
Our consolidated financial statements and the related financial statement schedule as of
December 31, 2004 and for each of the three years in the period ended December 31, 2004, and the
consolidated financial statements of MM 1995-2 as of December 31, 2004 and for each of the three
years in the period ended December 31, 2004, are incorporated in this prospectus by reference from
our Annual Report on Form 10-K for the year ended December 31, 2004.
Our consolidated financial statements as of December 31, 2004 and for the year then ended and
the related financial statement schedule, and the consolidated financial statements of MM 1995-2 as
of December 31, 2004 and for each of the three years in the period ended December 31, 2004,
incorporated in this prospectus by reference from our Annual Report on Form 10-K for the year ended
December 31, 2004 have been audited by Hein & Associates LLP, independent registered public
accounting firm, as stated in their report, which is incorporated by reference herein, and is
incorporated in reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
The consolidated financial statements as of December 31, 2003 and for each of the two years in
the period then ended and the related financial statement schedule incorporated in this prospectus
by reference from our Annual Report on Form 10-K for the year ended December 31, 2004 have been
audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in
their report, which is incorporated by reference herein, and is incorporated in reliance upon the
report of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with respect to the shares offered by this
prospectus with the SEC under the Securities Act. This prospectus is only part of the registration
statement and does not include all of the information contained in the registration statement and
the exhibits to the registration statement. You can obtain a copy of the registration statement,
including the exhibits filed with it, from the SEC as indicated above.
We are a reporting company and file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any document we file with the SEC at the
SECs public reference room at 100 F Street, N.E, Washington, D.C. 20549. You can request copies
of these documents by writing to the SEC and paying a fee for the copying cost. Please call the
SEC at 1-800-SEC-0330 for further information about the operation of the public reference room.
Our filings with the SEC are also available to the public on the Internet at the SECs website at
http://www.sec.gov. In addition, our shares are listed for trading on the American Stock
Exchange. You can read and copy reports and other information concerning us at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference in this prospectus the information contained
in documents that we file with the SEC. This means that we can disclose important information to
you by referring you to those documents. The information that we incorporate by reference is
considered a part of this prospectus, and information contained in documents that we file later
with the SEC will automatically update and supersede this information.
We incorporate by reference in this prospectus the documents listed below, which we have filed
with the SEC (in each case, File No. 0-19793):
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed
with the SEC on March 22, 2005; |
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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, filed with
the SEC on May 16, 2005; |
30
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our Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed with
the SEC on August 12, 2005; |
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our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed
with the SEC on November 14, 2005; |
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our Current Reports on Form 8-K filed with the SEC on January 5, 2005, February 9,
2005, February 16, 2005 (as amended February 22, 2005), March 21, 2005, March 28,
2005, March 29, 2005, April 26, 2005, May 3, 2005, May 16, 2005, August 8, 2005, August
12, 2005, September 6, 2005, September 9, 2005, September 30, 2005, October 5, 2005,
November 14, 2005, November 21, 2005, November 22, 2005, December 8, 2005, January 20,
2006, February 10, 2006, February 21, 2006 and
February 27, 2006 (but, in each case, excluding information furnished under
Item 7.01); and |
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the description of our common stock, including the description of our preferred
share purchase rights, contained in our registration statement on Form 8-A filed with
the SEC on August 5, 2005, which incorporates by reference the description of our
common stock contained in our registration statement on Form 8-A filed with the SEC on
January 10, 1993, which was amended in Form 8-A/A Amendment No. 5 filed with the SEC
on November 30, 2001 and Form 8-A/A Amendment No. 6 filed with the SEC on May 21, 2004,
and any amendments or reports filed with the SEC for the purpose of updating such
descriptions. |
We also incorporate by reference information contained in any reports and other documents that
we file with the SEC in the future under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this prospectus and prior to the termination of this
offering, other than information that is furnished but not filed with the SEC under those filings.
Any statement contained in a document incorporated by reference in this prospectus will be
deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any subsequently filed document which is also incorporated or
deemed to be incorporated by reference in this prospectus modifies or supersedes that previous
statement. Any statement so modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.
The information relating to us contained in this prospectus should be read together with the
information in the documents incorporated or deemed to be incorporated by reference in this
prospectus.
We will provide without charge to each person, including any beneficial owner to whom a copy
of this prospectus is delivered, upon written or oral request of any such person, a copy of any and
all of the documents that have been or may be incorporated by reference in this prospectus, other
than exhibits to such documents. You may request a copy of these filings by writing or telephoning
us at the following address:
Metretek Technologies, Inc.
303 East Seventeenth Avenue, Suite 660
Denver, Colorado 80203
Attention: Corporate Secretary
Telephone: (303) 785-8080
You should rely only on the information contained or incorporated by reference in this
prospectus. Neither we nor any selling shareholder have authorized anyone to provide you with any
information that is different. The selling stockholders are making an offer to sell or seeking an
offer to buy these shares in any state where the offer or sale is not permitted. You should not
assume that the information in this prospectus is accurate as of any date other than the date on
the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of
the shares.
31
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table set forth the costs and expenses, other than underwriting and other
broker, dealer and other selling discounts and commissions, payable by the Registrant in connection
with the registration and offering of the shares being registered in this registration statement.
All amounts shown in the table below, other than the SEC registration fee, are estimates:
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SEC registration fee |
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$ |
1,251.93 |
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Legal fees and expenses |
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4,000.00 |
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Accounting fees and expenses |
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3,000.00 |
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Miscellaneous |
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748.07 |
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Total |
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$ |
9,000.00 |
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Item 15. Indemnification of Directors and Officers
The Registrant is a Delaware corporation. Section 145 of the General Corporation Law of the
State of Delaware (DGCL) provides for indemnification of the directors, officers, employees and
agents of a corporation under certain conditions and subject to certain limitations.
As permitted by Section 145 of the DGCL, the Registrants Second Restated Certificate of
Incorporation (Second Restated Certificate) permits the Registrant to indemnify any person who
was or is threatened to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, other than an action by or in
the right of the Registrant, by reason of the fact such person is or was an officer of director of
the Registrant, or is or was serving at the Registrants request as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise, against
expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or proceeding, provided
that such person acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Registrant, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such persons conduct was unlawful. The Registrant
is also permitted to indemnify the same persons against expenses, including attorneys fees,
actually and reasonably incurred by such persons in connection with the defense or settlement of
any threatened, pending or completed action or suit by or in the right of the Registrant under the
same conditions, except that no indemnification will be made in respect to any claim, issue or
matter as to which such person has been adjudged to be liable to the Registrant unless, and only to
the extent that, the adjudicating court determines that such indemnification is proper under the
circumstances. To the extent such persons are successful on the merits or otherwise in defense of
any such action, suit or proceeding, such indemnification is mandatory. The Registrant may also
pay the expenses incurred in any such action, suit or proceeding in advance of its final
disposition, upon receipt of an appropriate undertaking by such person. Such rights are not
exclusive of any other right which any person may have or hereafter acquire under any statute, or
under any provision of the Registrants Second Restated Certificate, By-Laws, or under any
agreement, vote of stockholders or disinterested directors or otherwise. No repeal or modification
of these provisions of the Registrants Second Restated Certificate will in any way diminish or
adversely affect the rights of any person to indemnification thereunder in respect of any
occurrences or matters arising before any such repeal or modification.
The Registrants Amended and Restated By-Laws provide that the Registrant shall indemnify its
directors, officers, employees and agents to the extent permitted by the DGCL.
As permitted by Section 102(b)(7) of the DGCL, the Registrants Second Restated Certificate
also eliminates the personal liability of the Registrants directors to Metretek or its
stockholders for monetary damages for breach of fiduciary duty as a director, except for liability
(i) for any breach of the directors duty of loyalty to us
II-1
or our stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the DCGL, relating to unlawful payments of
dividends or unlawful stock purchases or redemptions; and (iv) for any transaction from which a
director derived an improper personal benefit.
The Registrants Second Restated Certificate also specifically authorizes the Registrant to
maintain insurance and to grant similar indemnification rights to employees or agents of the
Registrant. The directors and officers of the Registrant are covered by insurance policies
indemnifying them against certain liabilities, including certain liabilities arising under the
Securities Act, which might be incurred by them in such capacity.
The Registrant has also entered into indemnification agreements with each of its directors
that require the Registrant to indemnify its directors against certain liabilities, including
certain liabilities arising under the Securities Act, which might be incurred by them in such
capacity.
Item 16. Exhibits
The following exhibits are filed herewith or incorporated herein by reference:
(2) |
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Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession: |
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(2.1) |
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Form of Stock Purchase Agreement, dated as of September 10, 2004, by and between
Metretek Technologies, Inc. and the employee-shareholders of PowerSecure, Inc.
(Incorporated by reference to Exhibit 10.1 to Registrants Current Report on Form 8-K dated
September 10, 2004.) |
(3) |
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Articles of Incorporation and Bylaws: |
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(3.1) |
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Second Restated Certificate of Incorporation of Metretek Technologies, Inc.
(Incorporated by reference to Exhibit 4.1 to Registrants Registration Statement on
Form S-3, Registration No. 333-96369.) |
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(3.2) |
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Amended and Restated By-Laws of Metretek Technologies, Inc. (Incorporated by
reference to Exhibit 4.2 to Registrants Registration Statement on Form S-8,
Registration No. 333-62714.) |
(4) |
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Instruments Defining the Rights of Security Holders, Including Indentures: |
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(4.1) |
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Specimen Common Stock Certificate. (Incorporated by reference to Exhibit 4.1
to Registrants Registration Statement on Form S-18, Registration No. 33-44558.) |
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(4.2) |
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Amended and Restated Rights Agreement, dated as of November 30, 2001, between
Metretek Technologies, Inc. and ComputerShare Investor Services, LLC. (Incorporated by
reference to Exhibit 4.1 to Registrants Registration Statement on Form 8-A/A,
Amendment No. 5, filed November 30, 2001.) |
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(4.3) |
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Amendment No. 1 to Amended and Restated Rights Agreement, dated as of April
22, 2004, between Metretek Technologies, Inc. and ComputerShare Investor Services, LLC.
(Incorporated by reference to Exhibit 1 to Registrants Form 8-A/A, Amendment No. 6
filed May 21, 2004). |
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(5.1) |
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Opinion of Kegler, Brown, Hill & Ritter Co., L.P.A.* |
(23) |
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Consents of Experts and Counsel: |
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(23.1) |
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Consent of Hein & Associates LLP* |
II-2
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(23.2) |
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Consent of Deloitte & Touche LLP* |
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(23.3) |
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Consent of Kegler, Brown, Hill & Ritter Co. L.P.A.
(Included in Exhibit 5.1).* |
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(24.1) |
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Powers of Attorney of officers and directors of Metretek Technologies, Inc. (Included
on Signature Page).* |
Item 17. Undertakings.
(a) |
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The undersigned Registrant hereby undertakes: |
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(1) |
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To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: |
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(i) |
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To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933; |
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(ii) |
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To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the Calculation of
Registration Fee table in the effective Registration Statement; and |
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(iii) |
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To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; |
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Provided, however, That: |
(A) Paragraphs (a)(1)(i) and (a)(1) (ii) of this section do not apply if
the registration statement is on Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement; and
(B) Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do
not apply if the registration statement is on Form S-3 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed pursuant to Rule
424(b) that is pat of the registration statement.
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(2) |
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That, for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities |
II-3
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offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof. |
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(3) |
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To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering. |
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(4) |
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That for the purpose of determining liability under the Securities Act of 1933
to any purchaser: |
(i) If the registrant is relying on Rule 430B:
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(A) |
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Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be
deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and |
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(B) |
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Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act of 1933
shall be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or the
date of the first contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new
effective date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no
statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or modify any statement that was
made in the registration statement or prospectus that was part of the registration statement or
made in any such document immediately prior to such effective date. |
(ii) If the registrant is subject to Rule 430C, each prospectus filed by the registrant pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used
after effectiveness; provided, however, that
no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first us, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
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That, for the purpose of determining liability of the registrant under the Securities Act
of 1933 to any purchaser in the initial distribution of the securities: |
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The undersigned registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser: |
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the
offering required to be filed pursuant to Rule 424; |
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(ii) |
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Any free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned registrant; |
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(iii) |
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The portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided by or on behalf of
the undersigned registrant; and |
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Any other communication that is an offer in the offering made by the undersigned
registrant to the purchaser. |
II-4
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrants annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plans annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and
has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado on March 1, 2006.
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METRETEK TECHNOLOGIES, INC. |
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By:
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/s/ W. Phillip Marcum
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W. Phillip Marcum, President and |
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Chief Executive Officer |
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby
constitutes and appoints W. Phillip Marcum, A. Bradley Gabbard and Paul R. Hess, and each of them,
with full power to act without the joinder of others, as his true and lawful attorney-in-fact and
agents, with full power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, or any registration statement for the same offering
that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and
to file the same, with all exhibits thereto and all other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorney-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and
each of them, or his or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on
Form S-3 has been signed below by the following persons in the capacities and on the dates
indicated:
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Signature |
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Title |
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Date |
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/s/ W. Phillip Marcum
W. Phillip Marcum
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President, Chief Executive Officer
and Director (Principal Executive
Officer)
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March 1, 2006 |
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/s/ A. Bradley Gabbard
A. Bradley Gabbard
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Executive Vice President, Chief Financial
Officer, Treasurer and Director
(Principal Financial Officer)
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March 1, 2006 |
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/s/ Gary J. Zuiderveen
Gary J. Zuiderveen
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Vice President, Principal Accounting
Officer, Controller and Secretary
(Principal Accounting Officer)
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March 1, 2006 |
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/s/ Basil M. Briggs
Basil M. Briggs
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Director
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March 1, 2006 |
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/s/ Anthony D. Pell
Anthony D. Pell
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Director
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March 1, 2006 |
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/s/ Kevin P. Collins
Kevin P. Collins
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Director
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March 1, 2006 |
II-6
METRETEK TECHNOLOGIES, INC.
Form S-3
Exhibit Index
(2) |
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Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession: |
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(2.1) |
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Form of Stock Purchase Agreement, dated as of September 10, 2004, by and between
Metretek Technologies, Inc. and the employee-shareholders of PowerSecure, Inc.
(Incorporated by reference to Exhibit 10.1 to Registrants Current Report on Form 8-K dated
September 10, 2004.) |
(3) |
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Articles of Incorporation and Bylaws: |
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(3.3) |
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Second Restated Certificate of Incorporation of Metretek Technologies, Inc.
(Incorporated by reference to Exhibit 4.1 to Registrants Registration Statement on
Form S-3, Registration No. 333-96369.) |
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(3.4) |
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Amended and Restated By-Laws of Metretek Technologies, Inc. (Incorporated by
reference to Exhibit 4.2 to Registrants Registration Statement on Form S-8,
Registration No. 333-62714.) |
(4) |
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Instruments Defining the Rights of Security Holders, Including Indentures: |
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(4.4) |
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Specimen Common Stock Certificate. (Incorporated by reference to Exhibit 4.1
to Registrants Registration Statement on Form S-18, Registration No. 33-44558.) |
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(4.5) |
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Amended and Restated Rights Agreement, dated as of November 30, 2001, between
Metretek Technologies, Inc. and ComputerShare Investor Services, LLC. (Incorporated by
reference to Exhibit 4.1 to Registrants Registration Statement on Form 8-A/A,
Amendment No. 5, filed November 30, 2001.) |
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(4.6) |
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Amendment No. 1 to Amended and Restated Rights Agreement, dated as of April
22, 2004, between Metretek Technologies, Inc. and ComputerShare Investor Services, LLC.
(Incorporated by reference to Exhibit 1 to Registrants Form 8-A/A, Amendment No. 6
filed May 21, 2004). |
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(5.1) |
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Opinion of Kegler, Brown, Hill & Ritter Co., L.P.A.* |
(23) |
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Consents of Experts and Counsel: |
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(23.1) |
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Consent of Hein & Associates LLP* |
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(23.2) |
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Consent of Deloitte & Touche LLP* |
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(23.3) |
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Consent of Kegler, Brown, Hill & Ritter Co. L.P.A.
(Included in Exhibit 5.1).* |
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(24.1) |
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Powers of Attorney of officers and directors of Metretek Technologies, Inc. (Included
on Signature Page).* |
X-1