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P10 Industries, Inc. 8-K 2007

Documents found in this filing:

  1. 8-K
  2. Ex-99.1
  3. Graphic
  4. Graphic
Form 8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 16, 2007

 


ACTIVE POWER, INC.

(Exact Name of Registrant as Specified in Its Charter)

000-30939

(Commission File Number)

 

Delaware   74-2961657
(State of Other Jurisdiction of Incorporation)  

(IRS Employer

Identification No.)

 

2128 W. Braker Lane, BK12, Austin, Texas   78758
(Address of Principal Executive Offices)   (Zip Code)

(512) 836-6464

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registration under any of the following provisions (see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02 Results of Operations and Financial Condition.

On March 19, 2007, Active Power, Inc. (the “Company”) issued a press release (the “Press Release”):

 

   

disclosing that the Company has filed a notification of late filing on Form 12b-25 with respect to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006;

 

   

providing an update on the Company’s ongoing internal review of the Company’s historical stock option grants and related procedures and accounting; and

 

   

disclosing the Company has formally notified The Nasdaq Global Market that it had not timely filed its Annual Report on Form 10-K for the year ended December 31, 2006 with the Securities and Exchange Commission and, therefore, the Company was not in compliance with Nasdaq’s filing requirement as set forth in Nasdaq Marketplace Rule 4310(c)(14).

As previously announced, as a result of certain preliminary determinations made in the course of the Company’s internal stock option review currently being conducted under the supervision of a special ad hoc committee of the Board of Directors (the “Special Committee”) with the assistance of legal and accounting advisors, the Company concluded on March 8, 2007 that additional accounting charges for stock-based compensation expenses resulting from potential differences in the actual accounting measurement dates of certain past stock option grants and the stated grant dates previously used by the Company in accounting for such grants are likely to be material.

While the internal review is still ongoing and the Company has not yet determined the final amount of any related charges, the Company continues to estimate that it will record additional non-cash stock-based compensation expenses ranging in the aggregate from approximately $1.5 million to $3 million and impacting amounts previously reported for the years 2001 through 2006, including quarterly reports. These non-cash charges (off-set by corresponding increases to additional paid-in capital) will have the effect of increasing reported losses and retained deficit figures contained in the Company’s historical financial statements for these prior periods. However, because the review is not yet completed and additional items remain to be reviewed, further analysis could cause this estimated amount of additional stock-based compensation expense to change materially.

The Company also previously announced that after reviewing information provided by the Special Committee and the Special Committee’s advisors, the Board of Directors, Audit Committee and management of the Company concluded on March 8, 2007 that the Company will restate certain annual and quarterly financial statements and related footnote disclosures issued during the years 2001 through 2006. Additionally, on March 8, 2007, the Board of Directors, the Special Committee, the Audit Committee and management of the Company also concluded that the Company’s previously issued financial statements for the years 2001 through 2006, including both annual and quarterly reports, and related auditor’s reports for the years 2001 through 2005 should no longer be relied upon.

 


The Company is continuing to examine the potential impact of differences in option grant measurement dates on the Company’s tax liabilities reported during these same periods. Any additional tax liabilities also would negatively impact the Company’s historical financial results as reflected in certain prior period balance sheets and income statements previously issued by the Company; however, because these amounts have not yet been estimated, they are not included in the above preliminary additional expense estimates. Furthermore, any potential tax liabilities identified likely would be cash-based expenses and any accrual of such liabilities likely would impact historical non-stock option related operating expenses for prior periods. These cash-based expenses also could negatively impact the Company’s future financial results as reflected in the Company’s future cash flow statements if and when the Company makes any payment of such expenses in future periods.

Also, the Special Committee and its advisors currently are reviewing the Company’s historical practices with respect to its Employee Stock Purchase Plan that was discontinued in 2006. To the extent they identify any issues with respect to the Employee Stock Purchase Plan there may be additional accounting, tax or other adverse financial impact to the Company. In addition, the Company is incurring significant legal and professional fees and other expenses in conducting this investigation. These expenses also could negatively impact the Company’s future financial results and financial condition.

The Company has not yet fully assessed the impact on its internal controls over financial reporting of the various issues identified in the internal review to date.

These matters have been discussed with Ernst & Young, the Company’s registered independent accounting firm, by members of the Company’s management, Board of Directors, the Audit Committee and the Special Committee. Additionally, on March 19, 2007, the Company formally notified The Nasdaq Global Marketplace that, for the reasons set forth herein, the Company had not timely filed its Annual Report on Form 10-K for the year ended December 31, 2006 with the Securities and Exchange Commission and, therefore, the Company was not in compliance with Nasdaq’s filing requirement as set forth in Nasdaq Marketplace Rule 4310(c)(14).

Because the Company’s internal investigation is still ongoing and the facts underlying the Company’s accounting determinations with respect to certain past stock option grants and other potential issues identified in the internal review are still being developed, the Company was unable to file its Form 10-K for the year ended December 31, 2006 by the required filing date of March 16, 2007. The Company intends to file the Form 10-K as soon as practicable once the Company has finalized such conclusions following the completion of the internal review and the final report of the Special Committee (and after the Company’s external auditors have completed their review of the Company’s conclusions and any additional necessary audit procedures), but at this time the Company is unable to provide an estimate for such filing date.

The Company’s results of operations for the quarter ended December 31, 2006 and the fiscal year ended December 31, 2006, to be reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, will reflect changes from prior periods, both related and unrelated to the matters described above.

 


As described above, the Company has previously announced that it expects to record additional material non-cash, stock-based compensation expense as a result of findings of the internal review. As also noted above, the Company is continuing to examine the potential impact of differences in option grant measurement dates on the Company’s tax liabilities reported during prior annual and quarterly periods. Any additional tax liabilities also would negatively impact the Company’s historical financial results, likely including cash-based, non-stock option related operating expenses for prior periods; however, these amounts have not yet been estimated because the Company’s internal review has not yet been completed and the underlying facts are still being developed. Also, as noted above, the Company’s historical practices with respect to its Employee Stock Purchase Plan are currently under review by the Special Committee and its advisors and any issues they identify may have additional accounting, tax or other adverse financial impact on the Company that cannot be estimated at this time due to the ongoing examination of the underlying facts.

On February 2, 2007, the Company issued a press release announcing selected preliminary unaudited financial information for the quarter ended December 31, 2006 and the fiscal year ended December 31, 2006, a copy of which was furnished on a Current Report on Form 8-K on February 2, 2006. The selected preliminary unaudited financial information furnished in the Current Report on Form 8-K on February 2, 2006 remains subject to adjustment as a result of the Company’s restatement of previously issued financial statements to record non-cash charges for compensation expense relating to past stock option grants as well as any cash-based charges associated with the tax impact or other financial impact of issues that may be identified in the internal review or that currently are being analyzed by the Company and its advisors, such as issues with respect to the Company’s historical Employee Stock Purchase Plan practices and the tax impact of past stock option granting practices.

The Company issued a press release concerning this matter on March 19, 2007, a copy of which is attached as Exhibit 99.1 to this report. In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 2.02 and in the attached Exhibit 99.1 shall be deemed to be “furnished” and not deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On March 19, 2007, Active Power, Inc. (the “Company”) formally notified The Nasdaq Global Market that it had not timely filed its Annual Report on Form 10-K for the year ended December 31, 2006 with the Securities and Exchange Commission and, therefore, the Company was not in compliance with Nasdaq’s filing requirement as set forth in Nasdaq Marketplace Rule 4310(c)(14). Nasdaq requires, among other things, that the Company timely file all required reports with the SEC. The Company was not able to timely file an Annual Report on Form 10-K for the year ended December 31, 2006 complying with the SEC’s rules because, as described above, the internal review of the Company’s historical stock option grants and related procedures and accounting has not been completed and the Company has determined that it must restate


certain prior historical financial statements before it can file its Annual Report on Form 10-K for the year ended December 31, 2006.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached exhibit shall be deemed to be “furnished” and not deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.

 

  Exhibit No.    Description
  99.1    Press Release of Active Power, Inc. dated March 19, 2007

The inclusion of any statement in this Current Report on Form 8-K does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

Cautionary Note Regarding Forward Looking Statements

All statements in this Current Report on Form 8-K other than statements of historical fact are forward looking statements that are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. Such forward looking statements are generally, but not necessarily, accompanied by words such as “plan,” “if,” “estimate,” “expect,” “believe,” “could,” “would,” “anticipate,” “may,” or other words that convey uncertainty of future events or outcomes. Specific examples of forward looking statements in this Current Report on Form 8-K include, but are not limited to, statements concerning the status of the internal investigation and preliminary conclusions of the Company, its management, the Board of Directors, the Audit Committee or the Special Committee; the size or effect of previously unrecorded stock-based compensation charges; specific periods for which restatement or adjustment of the Company’s previously issued financial statements or disclosures may be required; the size or effect of additional tax liabilities, if any; the impact of any issues that may be identified with respect to the Company’s internal controls over financial reporting; the impact of any issues that may be identified with respect to the Company’s Employee Stock Purchase Plan; the size or effect of additional charges or liabilities arising out of related to any issues that may be identified in other investigations arising out of or related to the Special Committee’s internal investigation, if any; the length of time it may take for the Special Committee to complete its investigation; and the length of time it may take for the Company to file its Annual Report on Form 10-K for the year ended December 31, 2006. These forward looking statements and other statements made elsewhere in this Current Report on Form 8-K are made in reliance, in part, on the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on current information and expectations, and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such forward looking statements due to various factors, including but not limited to, inability to accurately predict revenue and budget for expenses for future periods; fluctuations in


revenue and operating results; overall market performance; potential for significant losses to continue decreases and/or delays in capital spending; limited product offerings; inability to expand and integrate new distribution channels; inability to manage new and existing product distribution relationships; dependence on the Company’s relationship with Caterpillar®; competition; delays in research and development; dependence on sole or limited source suppliers; inability to increase product sales; inventory risks; dependence upon key personnel; inability to protect the Company’s intellectual property rights; potential future acquisitions; volatility of the Company’s stock price regardless of the Company’s actual financial performance; ability to successfully prosecute and defend any future litigation; additional issued identified by the Company arising out of or related to the Special Committee’s investigation into the Company’s historical stock option grants and related procedures and accounting; impact of additional tax liabilities that have not yet been estimated; future rule-making, regulatory or enforcement actions, pronouncements or guidance by the SEC, PCAOB, NASDAQ or other regulatory agencies; and other factors detailed in the Company’s filings with the Securities and Exchange Commission. Any one of these factors may cause the Company’s actual financial results to differ materially from its projected results. The forward looking statements in this Current Report on Form 8-K speak only as of the date they are made. The Company undertakes no obligation to revise or update publicly any forward looking statement for any reason, including forward looking statements made herein relating to the nature and scope of the Special Committee’s ongoing internal investigation, the preliminary conclusions reached by the Company, its management, the Board of Directors, the Audit Committee or the Special Committee and the size or effect of previously unrecorded stock based compensation charges. Readers are referred to the Company’s Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings which discuss the foregoing factors as well as other important risk factors that could affect the Company’s business, results of operations and financial condition.

 


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Active Power, Inc.
Dated: March 19, 2007     By:   /s/ John K. Penver
        John K. Penver
        Chief Financial Officer

 


EXHIBIT INDEX

 

Exhibit No.    Description
99.1    Press Release of Active Power, Inc. dated March 19, 2007

 

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