25th Jul 2007 07:30
Enova Systems, Inc.25 July 2007 25 July 2007 Enova Systems, Inc ("Enova" or the "Company) NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ORFROM, THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OFIRELAND OR THE REPUBLIC OF SOUTH AFRICA Neither this announcement nor any copy of it may be taken, transmitted ordistributed, directly or indirectly, in or into the United States of America,Canada, Australia, the Republic of Ireland, the Republic of South Africa orJapan. Any failure to comply with this restriction may constitute a violation ofUnitied States, Canadian, Australian, South African, Irish or Japanesesecurities laws. •Proposed placing of 2,218,000 new Common Shares of no par value ("Placing Shares") at 260p per share (the "Placing Price") to raise approximately £5.8 million before expenses (US$11.9 million) ("the Placing") •Current trading and outlook Summary of the Placing Enova announces that it proposes to raise approximately £5.8 million (US$11.9million), before expenses, by way of a Placing of 2,218,000 new Common Shares ata price of 260p per Placing Share. The net proceeds of the Placing are to be utilised to fund working capital forthe next phase of the Company's growth and to strengthen the Company's balancesheet. Current trading and outlook The Directors believe that Enova's business outlook is improving and thatgreater recognition and strong engineering have allowed Enova to make severalkey strides towards sustainable revenue as the Company has continued to shiftits focus from research and development work to production contracts. Enova continues to work with customers and potential customers with a view todeveloping these relationships and securing orders of increasing size. Enova hasidentified a number of existing customers which have the potential to submitsignificant orders in the near to medium term. Although the Directors believethat current negotiations with several parties may result in further developmentand production contracts and revenues during 2007 and beyond, there are noassurances that such additional agreements will be realized or when they will berealized. Details of the Placing Enova has entered into a Placing Agreement pursuant to which Investec Bank (UK)Limited ("Investec") will act as Enova's agent to use its reasonable endeavoursto procure subscribers for the Placing Shares at the Placing Price and failingwhich to subscribe for any unsubscribed shares itself. Investec, on behalf ofEnova, has conditionally placed a total of 2,218,000 new Common Shares withinstitutional and certain other investors at the Placing Price to raise £5.8million (before expenses). The Placing Price represents a discount of approximately 5.5 per cent. to theclosing middle market price of the Enova unrestricted common shares (Code: ENV)on 24 July 2007. The Placing Shares represent approximately 14.9 per cent. ofthe Company's issued share capital immediately prior to the Placing. Application will be made to the London Stock Exchange for the Placing Shares tobe admitted to trading as restricted Common Shares on AIM ("Admission"). ThePlacing Shares will rank pari passu in all respects with the existing CommonShares except that they are restricted under Regulation S of the US SecuritiesAct of 1933 (as amended) as described below. Application will also be made tothe American Stock Exchange Inc. for the Placing Shares to be listed on AMEX("Listing"). The implementation of the Placing does not require shareholder approval. ThePlacing is conditional, inter alia, on Admission and on AMEX approving theListing. It is expected that dealings in the Placing Shares on AIM will commenceon 1 August 2007. Regulation S Due to the restrictions of the US Securities Act of 1933 (as amended)("Securities Act"), the Placing Shares will be subject to the transferrestrictions as set out in Regulation S and Rule 144 of the Securities Act. Thetransfer restrictions, which will cover a two year period, are detailed below.In view of these restrictions, the Placing Shares will be traded under theCompany's new restricted International Securities Identification Number (ISIN)code USU292791113. The Company currently intends to prepare and file a resale registrationstatement with the US SEC in respect of the Placing Shares within 60 days of theadmission to trading on AIM of the Placing Shares. Upon subsequenteffectiveness, a registration statement generally enables placees to resellshares without restriction provided a prospectus is delivered prior to or inconjunction with any offer or sale. The Company, however, provides no assurancethat it will be able to file the registration statement or have it declaredeffective by the SEC to enable resales. Any placee who seeks to sell pursuant tothe registration statement will be required to provide certain contractualrepresentations to the Company, including a selling shareholder questionnaire.The terms of the contractual representations and selling shareholderquestionnaire will be within Company's sole discretion. Providing placees theability to participate in a registration statement may also benefit the Companyby enhancing overall share liquidity and potentially eliminating a duplicative(restricted) line of trading on AIM. To the extent some placees choose toparticipate and sell in the resale registration statement, but other placees donot, then the restricted line of AIM shares will remain in existence in thenormal course and the ability to resell within the restricted line may bereduced. For further details Enova Systems, Inc Tel: +1 310 527 2800Mike Staran, President and Chief Operating Officer Investec Tel: 020 7597 5970Michael Ansell / Rupert Krefting Transfer restrictions The transfer restrictions set out below are described in greater detail in thetransfer restrictions at Part V of the AIM admission document published by theCompany on 19 July 2005. This announcement has been prepared by the Company in making offers and sales ofthe Placing Shares outside the United States to non-US Persons in reliance onRegulation S under the Securities Act. Investors are referred to the definitionof a "US Person" below. Terms used in the following description of the transferrestrictions that are defined in Regulation S are used as therein defined. The issue and sale of the Placing Shares offered hereby has not been registeredunder the Securities Act. The Placing Shares are ''restricted securities'' asdefined in Rule 144 promulgated under the Securities Act. The Placing Shares maynot be offered, sold or delivered in the United States or to, or for the accountor benefit of, any US Person, except in certain transactions specified inRegulation S. Hedging transactions in Placing Shares may not be conducted unlessin compliance with the Securities Act. The Placing Shares will bear a legend tothe following effect, unless the Company determines otherwise in compliance withapplicable law: ''THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTEREDUNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE ''SECURITIES ACT''), ANDMAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ANOFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OFREGULATION S UNDER THE SECURITIES ACT, (2) PURSUANT TO AN EFFECTIVE REGISTRATIONSTATEMENT UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN AVAILABLE EXEMPTIONFROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE INACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVINGTHE COMMON SHARES OF THE COMPANY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITHTHE SECURITIES ACT.'' Pursuant to the arrangements for the Placing, the Company will be required torefuse to register any transfer of the Placing Shares not made (i) in accordancewith the provisions of Regulation S, (ii) pursuant to an available exemptionfrom registration under the Securities Act, or (iii) pursuant to a transactionregistered under the Securities Act. Investec has agreed that, except pursuant to an effective registration statementor pursuant to an available exemption from the registration requirement of theSecurities Act, it will not offer, sell or deliver any Placing Shares within theUnited States or to, or for the account or benefit of, a US Person, as part ofits distribution at any time or otherwise until one year after the date ofclosing the Placing, and that it will not engage in hedging transactions in theCommon Shares except in compliance with the Securities Act. Each purchaser of Placing Shares offered hereby sold in reliance on Regulation Swill have represented and agreed pursuant to the terms of the Placing Agreementas follows (terms used herein that are defined in Regulation S are used hereinas therein defined): (1) the purchaser is not a US Person and is not acting for the account orbenefit of a US Person; (2) the purchaser understands that the Placing Shares have not been registeredunder the Securities Act and may not be offered, resold, pledged or otherwisetransferred by such purchaser except (a) (i) outside the United States in anoffshore transaction in compliance with the requirements of Regulation S, (ii)pursuant to an available exemption from registration requirements under theSecurities Act, or (iii) pursuant to transaction registered under the SecuritiesAct, and (b) in accordance with all applicable securities laws of the states ofthe United States and other jurisdictions; (3) the purchaser understands and agrees that, if in the future it decides toresell, pledge or otherwise transfer any Placing Shares or any beneficialinterest in any Placing Shares during the length of time that the Placing Sharesare restricted securities as defined in the Securities Act, it will do so onlyoutside the United States in an offshore transaction in compliance with Rule 903or Rule 904 under the Securities Act, pursuant to an effective registrationstatement under the Securities Act or pursuant to an available exemption fromthe registration requirements of the Securities Act and in each of such cases inaccordance with any applicable securities law of any state of the United States; (4) the purchaser agrees to, and each subsequent holder is required to, notifyany purchaser of the Placing Shares from it of the resale restrictions referredto in paragraph (3) above, if then applicable; (5) the purchaser acknowledges that prior to any proposed transfer of PlacingShares (other than pursuant to an effective registration statement) thetransferee of the Common Shares may be required to provide certifications andother documentation relating to the non-US Person status of such transferee andsuch other agreements and documentation as required by the Company or itstransfer agent; (6) the purchaser acknowledges that the Company and Investec and others willrely upon the truth and accuracy of the foregoing acknowledgements,representations and agreements and agrees that if any such acknowledgements,representations or warranties deemed to have been made by virtue of its purchaseof Placing Shares are no longer accurate, it shall promptly notify the Companyand Investec; and (7) the purchaser acknowledges that the Placing Shares will bear a restrictivelegend, unless the Company determines otherwise in compliance with applicablelaw. Shares issued pursuant to Regulation S are deemed to be restricted securitiesunder the Securities Act, therefore purchasers of Placing Shares will need tocomply with Rule 144 with respect to any US sales (i.e. to a US Person) on themarket. Prior to the expiration of the Regulation S one-year distributioncompliance period, Rule 144 currently is not available because of its holdingperiod requirement. Therefore, prior to the expiration of the Regulation Sdistribution compliance period, the purchaser may not sell the Placing Shares toUS Persons on the market except pursuant to a registration statement under theSecurities Act. The Company has filed a registration statement for the purposesof Rule 144 of the Securities Act. Under existing standards, Rule 144 may be available for US sales on the marketof Placing Shares after the expiration of the one-year Regulation S distributioncompliance period. However, for a purchaser to sell any Placing Shares on themarket to US Persons under Rule 144, the Company must comply with the currentpublic information requirements of Rule 144. Under existing standards, Rule 144(k) is available for US sales on the market ofPlacing Shares by a non-affiliate of the Company after the second anniversary ofthe purchase of Placing Shares because Rule 144(k) does not have a currentpublic information requirement. As noted above, an affiliate of the Company cannot use Rule 144(k). A thoroughdiscussion of the affiliate status is beyond the scope of this announcement, butas a general matter, Directors, certain executives, and beneficial ownership of10 per cent. or more of the voting securities of the Company are presumed to beaffiliates. PRIOR TO PURCHASING PLACING SHARES IN THE PLACING OR CONDUCTING ANY TRANSACTIONSIN THE PLACING SHARES, INVESTORS ARE ADVISED TO CONSULT PROFESSIONAL ADVISERSREGARDING THE ABOVE RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS REFERRED TOIN THIS ANNOUNCEMENT. The term a ''US Person'' is defined in Rule 902(k) of Regulation S, whichdefinition shall apply for the purposes of this announcement, as follows: (i) any natural person resident in the United States; (ii) any partnership or corporation organised or incorporated under the laws ofthe United States; (iii) any estate of which any executor or administrator is a US Person; (iv) any trust of which any trustee is a US Person; (v) any agency or branch of a foreign entity located in the United States; (vi) any non-discretionary account or similar account (other than an estate ortrust) held by a dealer or other fiduciary for the benefit or account of a USPerson; (vii) any discretionary account or similar account (other than an estate ortrust) held by a dealer or other fiduciary organised, incorporated, or (if anindividual) resident in the United States; and (viii) any partnership or corporation if: (a) organised or incorporated under the laws of any foreign jurisdiction; and (b) formed by a US Person principally for the purpose of investing in securitiesnot registered under the Securities Act, unless it is organised or incorporatedand owned, by accredited investors (as defined in Rule 501(a) under theSecurities Act) who are not natural persons, estates or trusts. * * * * * Cautionary Statement THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACTOF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED ORSOLD IN THE UNITED STATES OR TO US PERSONS ABSENT REGISTRATION OR AN APPLICABLEEXEMPTION FROM THE REGISTRATION REQUIREMENTS Forward-Looking Statements This announcement includes statements which are, or may be deemed to be,"forward-looking statements". All statements other than statements of historicalfacts included in this announcement, including, without limitation, thoseregarding Enova's financial position, business strategy, plans and objectives ofmanagement for future operations (including development plans and objectivesrelating to Enova's products and services) are forward-looking statements. Bytheir nature, such forward-looking statements involve known and unknown risks,uncertainties and other important factors that could cause the actual results,performance or achievements of Enova to be materially different from futureresults, performance or achievements expressed or implied by suchforward-looking statements. Forward-looking statements may and often do differ materially from actualresults. Any forward-looking statements in this announcement speak only as atthe date of this announcement and are subject to risks relating to future eventsand other risks, uncertainties and assumptions relation to Enova's operations,results of operations, growth strategy and liquidity. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Enova Systems Inc