UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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
):
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June 25,
2009
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ThermoEnergy Corporation
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(Exact name of registrant as
specified in its
charter)
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Delaware
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(State or other jurisdiction
of
incorporation)
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33-46104-FW
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71-00659511
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(Commission File
Number)
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(IRS Employer Identification
No.)
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124 West Capitol Avenue, Suite 880, Little Rock,
Arkansas
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72201
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(Address of principal
executive offices)
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(Zip
Code)
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(501) 376-6477
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(Registrant’s telephone
number, including area
code)
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Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (
see
General Instruction A.2.
below):
o
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 -- Entry into a Material Definitive
Agreement.
On June
25, 2009, we issued to The Quercus Trust (“Quercus”) a 10% Secured Convertible
Promissory Note (the “Quercus Note”). Under the Quercus
Note, Quercus has agreed to make advances to us, from time to time,
up to an aggregate principal amount of $150,000. The Quercus Note
provides that advances may be used only to pay legal and accounting fees and
expenses related to the investigation by the Audit Committee of our Board of
Directors of our financial affairs or other matters within the investigative
authority of the Audit Committee. On June 26, 2009, Quercus made an
initial advance under the Quercus Note in the amount of
$50,000.
Advances
under the Quercus Note bear interest at the rate of 10% per annum, payable in
arrears on the last day of each March, June, September and December, commencing
on September 30, 2009. At our election, all or any portion of the
interest due on any particular interest payment date may be paid by the issuance
to Quercus of shares of our Common Stock, par value $0.001 per share (the
“Common Stock”). The number of shares of Common Stock to be issued in
payment of interest shall be determined by dividing (i) the amount of interest
to be so paid by (ii) 80% of the volume weighted average trading price per share
of Common Stock for the 10 trading days immediately preceding date on which such
interest is to be paid.
The
Quercus Note matures on the earlier of the closing of an equity or convertible
debt investment yielding gross proceeds to us of not less than $2,000,000 (the
“Financing”) or December 31, 2009. Quercus may participate in the
Financing by converting the principal amount of the Quercus Note into shares of
the securities to be issued in the Financing at a price per share equal to 80%
of the price per share at which such securities will be issued to other
investors in the Financing.
We had
previously entered into a Security Agreement dated February 11, 2009 with
Quercus (the “Security Agreement”) securing certain of our obligations to
Quercus. In the Quercus Note we pledge all Collateral (as defined in
the Security Agreement) to secure our obligations under the Quercus
Note. The Quercus Note amends the Security Agreement to provide that
the Quercus Note shall be secured by the Security Agreement to the same extent
as the Note defined therein.
We may
not prepay the Quercus Note without the prior written consent of
Quercus.
The
Quercus Note contains other customary provisions, including events of default,
choice of law and consent to the exclusive jurisdiction of state and federal
courts in Delaware to resolve disputes arising under the Quercus
Note. The Quercus Note is filed as Exhibit 10.1 to this Current
Report on Form 8-K and the foregoing description of the Quercus Note is
qualified in its entirety by reference to such Exhibit.
In
connection with the Quercus Note, on June 25, 2009, we entered into a letter
agreement with Quercus in which we acknowledged that certain conditions to
Quercus’ obligation to invest an additional $5,000,000 in us pursuant to a
Securities Purchase Agreement dated September 15, 2008, have not been and cannot
be met, and we irrevocably released any claim we may have on Quercus to make any
further investment. We also agreed that the choice of law and choice
of forum clause in the Note shall be applicable to any and all disputes that
arise between us and Quercus and shall be deemed to amend and supersede all
contrary choice of law and choice of forum clauses previously agreed to in any
and all agreements between the parties, except only for the dispute as to late
fees for failure to file a registration statement currently pending in Arkansas
courts. The letter agreement with Quercus is filed as Exhibit 10.2 to
this Current Report on Form 8-K and the foregoing description of such letter
agreement is qualified in its entirety by reference to such
Exhibit.
On June
26, 2009, we issued to The Focus Fund, LP (“Focus”) a 10% Convertible
Promissory Note dated June 17, 2009 in the principal amount of $108,000 (the
“Focus Note”). The principal and accrued interest on the Focus Note
is due and payable on October 15, 2009 and may be prepaid without premium or
penalty. The proceeds from the Focus Note will be used by us to fund
business operations and for other general corporate purposes.
The
outstanding principal and accrued interest on the Focus Note may be converted,
at Focus’s election, into shares of Common Stock at a conversion price of $0.36
per share. The conversion price and the number of shares into which
the Focus Note may be converted are subject to proportionate adjustment in the
event of certain fundamental changes to the Common Stock, including stock
splits, subdivisions or combinations, or upon certain extraordinary transactions
affecting our corporate status, such as capital reorganizations, mergers or
dispositions of our assets.
The Focus
Note contains other customary provisions, including events of default, choice of
law and consent to the exclusive jurisdiction of state and federal courts in
Arkansas to resolve disputes arising under the Focus Note. The Focus
Note is filed as Exhibit 10.3 to this Current Report on Form 8-K and the
foregoing description of the Focus Note is qualified in its entirety by
reference to such Exhibit.
In
connection with the Focus Note, we agreed in a letter to Focus dated June 15,
2009 that, should the conversion price or the exercise price of securities
issued to Quercus (the “Quercus Securities”) be less than the conversion price
of the Focus Note and the exercise price of the Warrant (described below in Item
3.02), the conversion price of the Focus Note and/or the exercise price of the
Warrant will be adjusted to a price equal to the applicable conversion price or
exercise price of the Quercus Securities. In our letter to Focus, we
also agreed that all shares of Common Stock purchased by Focus directly from us
and all shares of Common Stock issuable upon exercise or conversion of any
convertible notes or warrants issued by us to Focus will be entitled to
piggyback registration rights entitling Focus to include, subject to the rules
and regulations of the Securities and Exchange Commission, such shares of Common
Stock in any registration statement we file with the Commission during the
period prior to the date on which such shares of Common Stock may be freely
resold by Focus without registration in reliance on the exemption from
registration provided in Rule 144.
Our
letter to Focus is filed as Exhibit 10.4 to this Current Report on Form 8-K and
the foregoing description of such letter is qualified in its entirety by
reference to such Exhibit.
Item
3.02 — Unregistered Sales of Equity
Securities.
In
connection with the Focus Note (described above in Item 1.01), on June 26, 2009
we issued to Focus a Common Stock Purchase Warrant (the “Warrant”) entitling
Focus to purchase, on or before June 17, 2014 up to 600,000 shares of Common
Stock at an exercise price of $0.54 per share. The Warrant provides
for early expiration at our election in the event the trading price for the
Common Stock exceeds 300% of the Warrant’s exercise price for a period of
30 consecutive trading days.
The
conversion price of the Warrant and the number of shares for which the Warrant
may be exercised are subject to proportionate adjustment in the event of certain
fundamental changes to the Common Stock, including stock splits, subdivisions or
combinations, or upon certain extraordinary transactions affecting our corporate
status, such as capital reorganizations, mergers or dispositions of our
assets.
The
Warrant contains other customary provisions, including provisions for giving
notice of certain events affecting the Common Stock, procedures for exercise of
the Warrant and a covenant on our part to keep reserved a sufficient number of
shares of Common Stock to permit exercise of the Warrant in full.
The
Warrant is filed as Exhibit 4.1 to this Current Report on Form 8-K and the
foregoing description of the warrant is qualified in its entirety by reference
to such Exhibit.
Item9.01
Financial Statements and Exhibits
(c)
Exhibits.
Exhibit
No.
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Description
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4.1
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Warrant
No. W09-10 for the purchase of 600,000 shares of the Common Stock of
ThermoEnergy Corporation issued to The Focus Fund, LP
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10.1
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10%
Secured Convertible Promissory Note of ThermoEnergy Corporation dated June
25, 2009 in the principal amount of $150,000 issued to The Quercus
Trust
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10.2
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Letter
Agreement between The Quercus Trust and ThermoEnergy Corporation dated
June 25, 2009
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10.3
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10%
Convertible Promissory Note of ThermoEnergy Corporation dated June 17,
2009 in the principal amount of $108,000 issued to The Focus Fund,
LP
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10.04
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Letter
Agreement between The Focus Fund, LP and ThermoEnergy Corporation dated
June 15,
2009
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SIGNATURES
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.
Date:
June 30, 2009
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ThermoEnergy
Corporation
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(Registrant)
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By:
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/s/ Andrew
T. Melton
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Name:
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Andrew
T. Melton
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Title:
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Executive
Vice President and Chief Financial Officer
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