27th Mar 2008 07:01
Enova Systems, Inc.27 March 2008 27 March 2008 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 ofUnited States, Canadian, Australian, South African, Irish or Japanese securitieslaws. Equity fundraising to raise £4.2 million ($8.3 million) gross Summary of the Placing Enova today announces that it proposes to raise approximately £4.2 million(US$8.3 million), before expenses, by way of a placing (the "Placing") of2,131,274 new Common Shares of no par value ("Placing Shares") at 195p per share(the "Placing Price") with institutional and certain other investors. Furtherdetails of the Placing are set out below. Use of proceeds The net proceeds of the Placing are to be utilised to fund working capital andto strengthen the Company's balance sheet. Current trading and outlook Also today, the Company released its financial results for the year ended 31December 2007. During this period, Enova had revenue of US$9.2m and a net lossof US$9.3m. For further details of Enova's results and outlook, please refer tothe Company's results announcement. Enova continues to work with customers and potential customers with a view todeveloping these relationships and securing orders of increasing size. AlthoughEnova believes that current negotiations with several parties may result infurther development and production contracts and revenues during 2008 andbeyond, there are no assurances that such additional agreements will be realizedor when they will be realised. 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 2,131,274 new Common Shares withinstitutional and certain other investors at the Placing Price to raise £4.2million (before expenses). The Placing Price represents a discount of approximately 27 per cent. to theclosing middle market price of the Enova unrestricted common shares (Code: ENV)on 26 March 2008 on the AIM Market of the London Stock Exchange. The PlacingShares represent approximately 12 per cent. of the Company's issued sharecapital immediately prior to the Placing. The Placing Price is approximatelyequal to price of Enova common shares on the American Stock Exchange at the timeof signing of the placing agreement based on the prevailing exchange rate atthat time. The Placing Agreement contains warranties given to the Company with respect tothe Company, its business and certain matters connected with the Placing.Investec is entitled to terminate the agreement in certain circumstances priorto Admission, principally to the extent that any of the warranties containedtherein are, or become, materially untrue, inaccurate or misleading or if aforce majeure type event arises. In addition, the Company has given a customarytype indemnity to Investec in respect of, amongst other things, the performanceby Investec of its services in connection with this 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 on the restricted line (Code:ENVS) except that pursuant to Regulation Sof the US Securities Act of 1933 (as amended) the eligibility of a shareholderto transfer shares from the restricted line (Code: ENVS) to the unrestrictedline (Code: ENV) will depend on the time period that their shares have been heldand any other applicable restrictions as further described below. Applicationhas also be made to the American Stock Exchange Inc. for the Placing Shares tobe 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 3 April 2008. 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 at least a six month period, aredetailed below. In view of these restrictions, the Placing Shares will be tradedunder the Company's restricted International Securities Identification Number(ISIN) code USU292791113. For further details Enova Systems, Inc Tel: +1 310 527 2800Mike Staran, President and Chief Executive OfficerJarett Fenton, Chief Financial Officer Investec Tel: 020 7597 5970Michael Ansell / Paul Brett Transfer restrictions 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 (e.g. to a US Person) on themarket. Prior to the expiration of the Regulation S six-month 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. 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. Generally, the Company will becurrent in its public information provided the annual and quarterly reports itfiles with the SEC are timely and complete. If the Company is not current in its public information requirements, underexisting standards, that took effect by general operation of US law on 15February 2008, Rule 144 is available for US sales on the market of PlacingShares by a non-affiliate of the Company only upon the first anniversary of thepurchase of Placing Shares. To utilize Rule 144, a bona fine purchase of Placing Shares must occur upon theexpiration of the applicable holding period. In addition, the seller andpurchaser may be required to provide certain representations to the Companyrelating to time, manner, and status. PRIOR TO CONDUCTING ANY TRANSACTIONS IN THE PLACING SHARES OR EXISTING SHARES INTHE "ENVS" LINE, INVESTORS ARE CAUTIONED THAT THE ABILITY TO UTILIZE RULE 144WILL DEPEND IN PART UPON WHEN THE COMPANY INITIALLY PLACED THE SUBJECT SHARES.THE COMPANY PREVIOUSLY PLACED SHARES IN THE "ENVS" LINE ON OR ABOUT JULY 31,2007. THOSE SHARES PRESENTLY ARE ELIGIBLE FOR TO UTILIZE RULE 144. THE PLACINGSHARES TO BE ISSUED IN ACCORDANCE WITH THIS ANNOUNCEMENT, AS INDICATED ABOVE,WILL NOT BE ELIGIBLE TO UTILIZE RULE 144 UNTIL AT LEAST THE EXPIRATION OFSIX-MONTHS. The Company announced on 15 February 2008 that the Company intended to apply toAIM for all shares issued by the Company on 1 August 2008 to be moved from therestricted line (Code: ENVS) to the unrestricted line (Code: ENV). Following theissue of the Placing Shares, it may not be possible for the Company to make ablock application to move shares to the unrestricted line until at leastone-year has elapsed since the most recent placing into the restricted line.Consequently, any shareholder wishing to move its shares from the restrictedline to the unrestricted line will be required to individually followarrangements with the Company and its registrar, Computershare Investor Servicesplc. An affiliate of the Company also is subject to the six-month or one-year holdinganniversary standards of Rule 144 depending on whether the Company is current inits public information requirements. An affiliate, however, is subject toadditional requirements relating to the manner and amount of US sales under Rule144. A thorough discussion of the affiliate status is beyond the scope of thisannouncement, but as a general matter, Directors, certain executives, andbeneficial ownership of 10 per cent. or more of the voting securities of theCompany are presumed to be affiliates. 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, and generally issummarised 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 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Enova Systems Inc