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CYCLONE POWER TECHNOLOGIES INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities

August 5, 2014



ITEM 1.01 Entry into a Material Definitive Agreement

WHE Generation Corp. ("WHE GEN"), a 74% owned subsidiary of Cyclone Power Technologies Inc. (the "Company"), closed its Seed Round of funding in the amount of $350,000 on July 30, 2014. The financing was led by Laird Q. Cagan, co-founder and Managing Director of Cagan McAffee Capital Partners LLC in Cupertino, CA, and joined by 14 other individual and strategic accredited investors.

As a closing condition to the transaction and use of a material portion of the proceeds of the Seed Round funding, the Company paid the remaining balance of its senior secured debenture with TCA Global Credit Master Fund L.P. The payment fully retired that long-term liability and will release all of the Company's assets from a security interest and lien held by TCA.

The Seed Round funding was structured as several promissory notes issued by WHE GEN, bearing 6% interest and maturing in 12 months. The notes automatically convert to common stock of WHE GEN at a price of $.12 per share upon the closing of the first $1 million in the subsidiary's planned $2 million "A Round" common stock funding. The Seed Round and A Round financings were described in the Company's Separation Agreement with WHE GEN, as approved by Cyclone's Board of Directors, and filed with the Company's Current Report on Form 8-K on July 23, 2014. Assuming the full conversion of the Seed Round notes to WHE GEN common stock, Cyclone would continue to own approximately 43% of its subsidiary.

The securities offered in this financing have not been registered under the Securities Act of 1933, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

ITEM 2.03 Creation of Direct Financial Obligation

The information set forth under Item 1.01 of this Form 8-K is incorporated herein by reference.

ITEM 3.02 Unregistered Sales of Equity Securities

The information set forth under Item 1.01 of this Form 8-K is incorporated herein by reference.

The Company is relying on an exemption from the registration requirements of the Securities Act of 1933, as amended, for the private placement of securities under the Note Purchase Agreement pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder. The transaction does not involve a public offering, the investors were all "accredited investors" and/or qualified institutional buyers who all had access to information about us and their investment.

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Source: Edgar Glimpses


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