Unassociated Document
Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-156603
PROSPECTUS
SUPPLEMENT
(To Prospectus Dated January 30,
2009)
Series G
Warrants to Purchase 1,275,000 Shares
AKEENA SOLAR,
INC.
We are offering warrants to purchase up
to 1,275,000 shares of our common stock at an exercise price of $1.12 per share
(the “Series G
Warrants”). The
Series G Warrants are exercisable immediately following the
closing. Under the Series G Warrants, we have a right to require
the mandatory exercise of up to one-third of the shares underlying the warrant
if the VWAP of our common stock for each of at least four out of five
consecutive trading days exceeds $1.30, and the daily trading volume for each of
these five trading days exceeds $175,000. Concurrently with
the issuance of these additional Series G Warrants, we plan to amend the
provisions of the outstanding Series G Warrants we issued on March 3, 2009
to extend their date of termination until August 10, 2009. The
investors holding our outstanding Series G Warrants must partially exercise
those warrants, for a total exercise of 425,000 shares, as consideration for the
extension of the term of their remaining Series G Warrants and the issuance to
them of the additional Series G Warrants being offered hereby.
Our
common stock is listed on the NASDAQ Capital Market under the ticker symbol
“AKNS.” On April 17, 2009, the last reported sale price of our
common stock was $1.24 per share.
As of
March 31, 2009, there were 23,738,799 shares of our common stock held by
non-affiliates. Based on the $1.49 per share closing price of our
common stock on February 24, 2009, the aggregate market value of our outstanding
common equity pursuant to General Instruction I.B.6 of Form S-3 was
$35,828,842. Taking into account the conversion of preferred stock
and the termination or exercise of portions of warrants we previously issued,
the value of all securities we have offered pursuant to that Instruction in the
last 12 calendar months (including those offered hereby) is
$9,605,411.
Our
business and an investment in our securities involves risks. These
risks are described under the caption “Risk Factors” beginning on page S-4 of
this prospectus supplement and page 6 of the accompanying
prospectus.
|
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Per
Exercised Share
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|
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Total
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Public
offering price
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$ |
1.12 |
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$ |
476,000.00 |
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Placement
agent fees
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$ |
0.07 |
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|
$ |
28,560.00 |
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Proceeds,
before expenses, to us
|
|
$ |
1.05 |
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|
$ |
447,440.00 |
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We are
offering the additional Series G Warrants directly to the
investors. However, we agreed to pay a commission to the placement
agents through whom we offered units of our securities, including the original
Series G Warrants, in connection with the offering we consummated on March 3,
2009. The placement agents are not purchasing or selling any of the
warrants or underlying shares of our common stock. Because there is
no minimum offering amount required as a condition to closing in this offering,
the actual public offering amount, placement agent fees, and proceeds to us, if
any, are not presently determinable and may be substantially less than the total
maximum offering amounts set forth above.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy of this
prospectus supplement and the accompanying prospectus. Any
representation to the contrary is a criminal offense.
April 20,
2009
TABLE
OF CONTENTS
PROSPECTUS
SUPPLEMENT
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PROSPECTUS
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Page
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Page
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Prospectus
Supplement Summary
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S-1
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Table
of Contents
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2
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Risk
Factors
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S-4
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About
This Prospectus
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3
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Disclosure
Regarding Forward-Looking Statements
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S-9
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Prospectus
Summary
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4
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Use
of Proceeds
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S-9
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Securities
We May Offer
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4
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Dividend
Policy
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S-9
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Risk
Factors
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6
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Capitalization
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S-10
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Disclosure
Regarding Forward-Looking Information
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6
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Dilution
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S-11
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Use
of Proceeds
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6
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Description
of Series G Warrants
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S-12
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Ratio
of Earnings to Fixed Charges
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6
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Overview
of Financial Condition, Liquidity and Capital
Resources
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S-13
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Securities
We May Offer
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7
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Plan
of Distribution
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S-13
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Description
of Common Stock and Preferred Stock
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7
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Legal
Matters
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S-14
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Description
of Debt Securities |
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10
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Where
You Can Find Additional Information
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S-14
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Description
of Warrants
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18
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Description
of Units
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20
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Plan
of Distribution
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20
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Where
You Can Find Additional Information
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23
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Information
Incorporated by Reference
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23
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Experts
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25
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Legal
Matters
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25
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You
should rely only on the information contained in this prospectus supplement, the
accompanying prospectus and the documents incorporated or deemed incorporated by
reference herein or therein. We have not authorized anyone to provide
you with information different from and in addition to that contained in this
prospectus supplement, the accompanying prospectus or the documents incorporated
or deemed incorporated by reference herein or therein. We are not
making an offer to sell or seeking an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
The
information contained in this prospectus supplement, the accompanying prospectus
and the documents incorporated or deemed incorporated by reference herein or
therein is complete and accurate as of their respective dates, and may have
changed since those dates.
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying prospectus are part of a “shelf”
registration statement on Form S-3 that we filed with the Securities and
Exchange Commission, or the SEC. This prospectus supplement describes
the specific details regarding this offering, including the price, the amount of
warrants and underlying securities being offered and the risks of investing in
our securities. The accompanying prospectus provides general
information about us, some of which, such as the section entitled “Plan of
Distribution,” may not apply to this offering. If information in this
prospectus supplement is inconsistent with the accompanying prospectus, you
should rely on this prospectus supplement. You should read both this
prospectus supplement and the accompanying prospectus together with the
additional information about us described in the accompanying prospectus in the
section entitled “Where You Can Find Additional Information.” The
information incorporated by reference is considered part of this prospectus
supplement, and information we file later with the SEC may automatically update
and supersede this information.
PROSPECTUS
SUPPLEMENT SUMMARY
The
items in the following summary are described in more detail in this
prospectus supplement, the accompanying prospectus and in the documents
incorporated or deemed incorporated by reference herein or
therein. This summary provides an overview of selected
information and does not contain all of the information that you should
consider before investing in the warrants and the underlying shares of
common stocks subject to this offering. Therefore, you should
also read this entire prospectus supplement, the accompanying prospectus
and the documents incorporated by reference herein or
therein. All references to “Akeena Solar,” “the Company,” “we,”
“us,” “our,” and similar terms refer to Akeena Solar, Inc. and its
subsidiaries on a consolidated basis.
Overview
We
are a leading designer and integrator of solar power systems. We market,
sell, design and install systems for residential and commercial customers,
sourcing components (such as solar modules and inverters) from
manufacturers such as Suntech, Kyocera, SMA and Fronius. We currently
service customers in California, Colorado, Connecticut, Hawaii, New
Jersey, New York, and Pennsylvania. According to data compiled
by the California Energy Commission and the New Jersey Clean Energy
Program, over the past three years Akeena Solar has been one of the
largest national integrators of residential and small commercial solar
power systems in the United States. To date, we have installed
approximately 3,000 solar power systems. Since the commencement
of our operations in 2001, our sales have steadily grown, reaching
approximately $7.2 million in 2005, $13.4 million in 2006,
$32.2 million in 2007 and $40.8 million in
2008.
We
provide marketing, sales, design, construction, installation, maintenance,
support and related solar power system services to residential and small
commercial customers in the United States in locations in which the
economics are favorable to solar power. We provide our customers with a
single point of contact for their system design, engineering work,
building permit, rebate approval, utility hookup and subsequent
maintenance. We use our own crews or contractors, and perform engineering
and design work with in-house staff and outside engineering
firms.
We
concentrate on the design and installation of grid-tied solar power
systems. These systems are electrically connected to the utility grid so
that excess energy produced during the day flows backwards through the
utility’s electric meter, actually running the electric meter backwards.
The meter will run backwards when the power produced by the solar system
is greater than the power needs of the building. During the evenings or on
cloudy days, energy is drawn from the grid normally and the meter runs
forwards. Most utilities serving the areas in which we install systems
allow for “net metering.” Customers on net metering only pay for the net
amount of energy they consume during the year, essentially getting full
retail credit for the energy they transmit back onto the utility grid
during the day. We typically do not install off-grid systems (systems in
which there is no utility service, such as a remote cabin), nor do we
typically install battery backup systems or solar thermal
systems.
Based
on our experience as a solar power designer and integrator over the past
seven years, we have identified certain areas in which installation costs
can be significantly reduced. Our Andalay product line is a
“plug and play” solar panel technology that significantly reduces the
installation time, parts and costs, and provides superior reliability
and aesthetics for customers, when compared to other solar panel mounting
products and technology. Andalay offers the following features:
(i) mounts closer to the roof with less space in between panels; (ii) no
unsightly racks underneath or beside panels; (iii) built-in wiring
connections; (iv) 70% fewer roof-assembled parts and 50% less labor
required; (v) 25% fewer roof attachment points; and (vi) complete
compliance with the National Electric Code and UL wiring and grounding
requirements. We have applied for U.S. and international patents for
Andalay. Installation costs for a solar power system are
generally proportional to the area of panels installed. Thin
film and amorphous solar cell technologies, although less expensive on a
cost per watt basis, are generally less efficient (producing fewer watts
per square foot) and more expensive to install. Therefore, we
believe that Andalay becomes even more useful for the new generation of
less expensive but lower efficiency solar panels. Andalay solar
panel technology is generally applicable to all framed rooftop solar cell
technologies, including silicon, amorphous silicon, thin film and
concentrators.
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We have
existing supply relationships with Suntech Power Holdings Co. Ltd. (“Suntech”)
and Kyocera Solar, Inc. (“Kyocera”) to provide us with volume manufacturing and
delivery of our Andalay product used in our solar system
installations. In January 2008, we entered into a licensing agreement
with Suntech to distribute our Andalay product in Europe, Japan and
Australia. We announced in early February 2009 an OEM relationship
with Enphase Energy (“Enphase”) under which Enphase agreed to supply its
proprietary micro-inverters to us for integration with our Andalay
panels. We plan to introduce new versions of our Andalay product that
include the integrated micro-inverter in the second half of 2009.
Corporate
Information
Akeena
Solar was formed on February 23, 2001 as a California corporation and
reincorporated as a Delaware corporation on June 2, 2006. Our
corporate headquarters are located at 16005 Los Gatos Boulevard, Los Gatos,
California 95032. Additional offices are located in Fresno (Clovis),
Lake Forest, Palm Springs, San Diego, Santa Rosa and Thousand Oaks, California,
Denver, Colorado, and Milford, Connecticut. We maintain installation
offices at all of these facilities. Our telephone number is (408)
402-9400. Additional information about Akeena Solar is available on
our website at http://www.akeena.com. The information on our web site
is not incorporated herein by reference.
Securities
offered by us:
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·
Series G
Warrants to purchase common stock
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1,275,000
Warrant Shares
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Common
stock to be outstanding after this offering
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32,037,799
Shares
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Use
of proceeds
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As
a condition to receiving the additional Series G Warrants offered
hereby, investors must partially exercise the previously issued Series G
Warrants, with respect to at least 425,000 shares of our common stock at
an exercise price of $1.12, for total gross proceeds to us of
$476,000. We intend to use the net proceeds for general
corporate purposes. General corporate purposes may include
capital expenditures, future acquisitions, working capital and repayment
of other debt.
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Series G
Warrant
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The
Series G Warrants will be exercisable immediately after the date of
issuance, through and until August 10, 2009, at an exercise price of $1.12
per share of common stock.
If,
during the period commencing on June 3, 2009 and ending on August 10,
2009, the VWAP per share of our common stock for each of at least 4 out of
5 consecutive trading days during such five day period (the “Measurement
Period”) exceeds $1.30, and the daily volume for each trading day during
the Measurement Period of our common stock exceeds $175,000, then we can
call for the mandatory exercise of these warrants, but not in an amount
exceeding up to one-third of the original number of warrant shares
issuable under such Series G Warrant for any single mandatory
exercise.
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NASDAQ
Capital Market symbol
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AKNS
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Risk
factors
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See
“Risk Factors” and other information included or incorporated into this
prospectus supplement and the accompanying prospectus for a discussion of
the factors you should carefully consider before deciding to invest in our
securities.
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The total number of shares of
common stock outstanding after this offering is based on 31,612,799 shares
outstanding as of March 31, 2009 (which includes 791,480 unvested shares of
restricted stock granted to our employees), and excludes:
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2,050,597
shares of common stock issuable upon exercise of outstanding stock options
at a weighted average exercise price of $3.84 per share, under our stock
plans;
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7,181,406
additional shares of common stock reserved for issuance under various
outstanding warrant agreements, at a weighted average exercise price of
$2.35; and
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1,344,319
additional shares of common stock reserved for future issuance under our
2006 Incentive Stock Plan and 4,000,000 shares of common stock reserved
for future issuance under our 2001 Stock Option
Plan.
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Of the
warrants to purchase shares of our common stock that are outstanding as of March
31, 2009, there are warrants outstanding to purchase 2,618,943 shares of our
common stock, at an exercise price of $0.86 per share, which were originally
issued in March 2007 and May 2007, and for which the exercise price had an
antidilution adjustment as a result of our issuance of common stock, preferred
stock and warrants on March 3, 2009. Those warrants are subject to
further antidilution adjustment in the event we were to issue additional shares
of common stock at an effective price below $0.86 per
share.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. You should consider
the following risk factors, as well as other information contained or
incorporated by reference in this prospectus supplement and the accompanying
prospectus, before deciding to purchase any warrants or any underlying shares of
our common stock offered herein. The risks and uncertainties
described are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may
also affect our business operations. If any of these risks occur, our
business, financial condition or results of operations could suffer, the market
price of our common stock could decline and you could lose all or part of your
investment in our securities.
Risks
Related to Our Business
We are exposed to risks associated with
the ongoing financial crisis and weakening global economy, which increase the
uncertainty of project financing for commercial solar installations and the risk
of non-payment from both commercial and residential
customers.
The recent severe tightening of the
credit markets, turmoil in the financial markets, and weakening global economy
are contributing to slowdowns in the solar industry, which slowdowns may worsen
if these economic conditions are prolonged or deteriorate
further. The market for installation of solar power systems depends
largely on commercial and consumer capital spending. Economic uncertainty
exacerbates negative trends in these areas of spending, and may cause our
customers to push out, cancel, or refrain from placing orders, which may reduce
our net sales. Difficulties in obtaining capital and deteriorating
market conditions may also lead to the inability of some customers to obtain
affordable financing, including traditional project financing and tax-incentive
based financing and home equity based financing, resulting in lower sales to
potential customers with liquidity issues, and may lead to an increase of
incidents where our customers are unwilling or unable to pay for systems they
purchase, and additional bad debt expense for Akeena. Further, these
conditions and uncertainty about future economic conditions make it challenging
for us to forecast our operating results, make business decisions, and identify
the risks that may affect our business, financial condition and results of
operations. If we are unable to timely and appropriately adapt to
changes resulting from the difficult macroeconomic environment, our business,
financial condition or results of operations may be materially and adversely
affected.
We
are dependent upon our suppliers for the components used in the systems we
design and install; and our major suppliers are dependent upon the continued
availability and pricing of silicon and other raw materials used in solar
modules.
The
components used in our systems are purchased from a limited number of
manufacturers. We source components (such as solar panels and inverters) from
manufacturers such as Fronius, Kyocera, SMA and Suntech. We are subject to
market prices for the components that we purchase for our installations, which
are subject to fluctuation. We cannot ensure that the prices charged by our
suppliers will not increase because of changes in market conditions or other
factors beyond our control. An increase in the price of components used in our
systems could result in an increase in costs to our customers and could have a
material adverse effect on our revenues and demand for our services. Our
suppliers are dependent upon the availability and pricing of silicon, one of the
main materials used in manufacturing solar panels. In the past, the
world market for solar panels experienced a shortage of supply due to
insufficient availability of silicon. This shortage caused the prices for solar
modules to increase. Interruptions in our ability to procure needed components
for our systems, whether due to discontinuance by our suppliers, delays or
failures in delivery, shortages caused by inadequate production capacity or
unavailability, financial failure, or for other reasons, would adversely affect
or limit our sales and growth. In addition, increases in the prices of modules
could make systems that have been sold but not yet installed unprofitable for
us. There is no assurance that we will continue to find qualified manufacturers
on acceptable terms and, if we do, there can be no assurance that product
quality will continue to be acceptable, which could lead to a loss of sales and
revenues.
Geographical
business expansion efforts we make could result in difficulties in successfully
managing our business and consequently harm our financial
condition.
As part
of our business strategy, we may seek to expand into other geographic markets.
We face challenges in managing expanding product and service offerings and in
integrating acquired businesses with our own. During 2007, we commenced
operations at our Bakersfield, Manteca and Santa Rosa offices in California. We
commenced operations in Fresno (Clovis), California, through the purchase of
customer contracts, and additionally, we opened offices in Lake Forest, Palm
Springs, San Diego and Thousand Oaks (Westlake Village), California. During
2008, we opened offices in Connecticut and Colorado. We may seek additional
locations for expansion. We cannot accurately predict the timing, size and
success of our expansion efforts and the associated capital commitments that
might be required. In addition, expansion efforts involve a number of
other risks, including:
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Failure
of the expansion efforts to achieve expected
results;
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Diversion
of management’s attention and resources to expansion efforts;
and
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Risks
associated with unanticipated events, liabilities or
contingencies.
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Client dissatisfaction or performance
problems at a single location could negatively affect our reputation. The
inability to integrate and manage a new location could result in dilution,
unfavorable accounting charges and difficulties in successfully managing our
business.
Our
Andalay technology may encounter unexpected problems, which could adversely
affect our business and results of operations.
Our
Andalay technology is relatively new and has not been tested in installation
settings for a sufficient period of time to prove its long-term effectiveness
and benefits. Problems may occur with Andalay that are unexpected and could have
a material adverse effect on our business or results of operations. We have been
issued U.S. Patent #7,406,800 from the United States Patent and Trademark Office
which covers key claims of our Andalay solar panel technology. Several other of
our patent applications covering Andalay are currently pending. Ultimately, we
may not be able to realize the benefits from any patent that is
issued.
Because
our industry is highly competitive and has low barriers to entry, we may lose
market share to larger companies that are better equipped to weather a
deterioration in market conditions due to increased competition.
Our
industry is highly competitive and fragmented, is subject to rapid change and
has low barriers to entry. We may in the future compete for potential customers
with solar and HVAC systems installers and servicers, electricians, utilities
and other providers of solar power equipment or electric power. Some of these
competitors may have significantly greater financial, technical and marketing
resources and greater name recognition than we have.
We believe that our ability to compete
depends in part on a number of factors outside of our control,
including:
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the
ability of our competitors to hire, retain and motivate qualified
technical personnel;
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the
ownership by competitors of proprietary tools to customize systems to the
needs of a particular customer;
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the
price at which others offer comparable services and
equipment;
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the
extent of our competitors’ responsiveness to client needs;
and
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installation
technology.
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Competition in the solar power services
industry may increase in the future, partly due to low barriers to entry, as
well as from other alternative energy sources now in existence or developed in
the future. Increased competition could result in price reductions, reduced
margins or loss of market share and greater competition for qualified technical
personnel. There can be no assurance that we will be able to compete
successfully against current and future competitors. If we are unable to compete
effectively, or if competition results in a deterioration of market conditions,
our business and results of operations would be adversely affected.
Our
profitability depends, in part, on our success and brand recognition and we
could lose our competitive advantage if we are not able to protect our
trademarks and patents against infringement, and any related litigation could be
time-consuming and costly.
We
believe our brand has gained substantial recognition by customers in certain
geographic areas. We have registered the “Akeena” and “Andalay” trademarks with
the United States Patent and Trademark Office. Use of our trademarks or similar
trademarks by competitors in geographic areas in which we have not yet operated
could adversely affect our ability to use or gain protection for our brand in
those markets, which could weaken our brand and harm our business and
competitive position. In addition, any litigation relating to protecting our
trademarks and patents against infringement could be time consuming and
costly.
The
success of our business depends on the continuing contributions of Barry
Cinnamon and other key personnel who may terminate their employment with us at
any time, and we will need to hire additional qualified personnel.
We rely
heavily on the services of Barry Cinnamon, our Chief Executive Officer, as well
as several other management personnel. Loss of the services of any such
individuals would adversely impact our operations. In addition, we believe our
technical personnel represent a significant asset and provide us with a
competitive advantage over many of our competitors and that our future success
will depend upon our ability to retain these key employees and our ability to
attract and retain other skilled financial, engineering, technical and
managerial personnel. None of our key personnel are party to any employment
agreements with us and management and other employees may voluntarily terminate
their employment at any time. We do not currently maintain any “key man” life
insurance with respect to any of such individuals.
If
we are unable to attract, train and retain highly qualified personnel, the
quality of our services may decline and we may not successfully execute our
internal growth strategies.
Our
success depends in large part upon our ability to continue to attract, train,
motivate and retain highly skilled and experienced employees, including
technical personnel. Qualified technical employees periodically are in great
demand and may be unavailable in the time frame required to satisfy our
customers’ requirements. While we currently have available technical expertise
sufficient for the requirements of our business, expansion of our business could
require us to employ additional highly skilled technical personnel. We expect
competition for such personnel to increase as the market for solar power systems
expands.
There can
be no assurance that we will be able to attract and retain sufficient numbers of
highly skilled technical employees in the future. The loss of personnel or our
inability to hire or retain sufficient personnel at competitive rates of
compensation could impair our ability to secure and complete customer
engagements and could harm our business.
Unexpected
warranty expenses or service claims could reduce our profits.
We
maintain a warranty reserve on our balance sheet for potential warranty or
service claims that could occur in the future. This reserve is adjusted based on
our ongoing operating experience with equipment and installations. It is
possible, perhaps due to bad supplier material or defective installations, that
we would have actual expenses substantially in excess of the reserves we
maintain. Our failure to accurately predict future warranty claims could result
in unexpected profit volatility.
Our
Chief Executive Officer, Barry Cinnamon, beneficially owns a significant number
of shares of our common stock, which gives him significant influence over
decisions on which our stockholders may vote and which may discourage an
acquisition of the Company.
Barry
Cinnamon, our Chief Executive Officer, beneficially owns, in the aggregate,
approximately 25.6% of our outstanding
common stock before this offering. The interests of our Chief Executive Officer
may differ from the interests of other stockholders. As a result, Mr. Cinnamon’s
voting power may have a significant influence on the outcome of virtually all
corporate actions requiring stockholder approval, irrespective of how our other
stockholders may vote, including the following actions:
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election
of our directors;
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the
amendment of our Certificate of Incorporation or
By-laws;
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·
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the
merger of our company or the sale of our assets or other corporate
transaction; and
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controlling
the outcome of any other matter submitted to the stockholders for
vote.
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Mr.
Cinnamon’s stock ownership may discourage a potential acquirer from seeking to
acquire shares of our common stock or otherwise attempting to obtain control of
our company, which in turn could reduce our stock price or prevent our
stockholders from realizing a premium over our stock price.
Risks
Related to This Offering
We
may need additional capital in the future to fund the growth of our business,
and financing may not be available.
Our
currently available capital resources, combined with the net cash proceeds from
this offering, cash flows from operations and expected interest income, may be
insufficient to meet our working capital and capital expenditure
requirements. Our cash requirements will depend on numerous factors,
including the rate of growth of our sales, the timing and levels of products
purchased, payment terms and credit limits from manufacturers, the availability
and terms of asset-based credit facilities, the timing and level of our accounts
receivable collections, and our ability to manage our business
profitability.
We may
need to raise additional funds through public or private debt or equity
financings or enter into new asset-based or other credit facilities, but such
financings may dilute our stockholders. We cannot assure you that any
additional financing that we may need will be available on terms favorable to
us, or at all. If adequate funds are not available or are not
available on acceptable terms, we may not be able to take advantage of
unanticipated opportunities, develop new products or otherwise respond to
competitive pressures. In any such case, our business, operating
results, or financial condition could be materially adversely
affected.
Our
management team will have broad discretion over the use of the net proceeds from
this offering.
Our
management will use their discretion to direct the net proceeds from this
offering. We intend to use the net proceeds for general corporate
purposes. General corporate purposes may include capital
expenditures, future acquisitions, working capital and repayment of other
debt. Our management’s judgments may not result in positive returns
on your investment and you will not have an opportunity to evaluate the
economic, financial or other information upon which our management bases its
decisions.
Investors
in this offering will experience immediate and substantial dilution
The
public offering price of the securities offered pursuant to this prospectus
supplement is substantially higher than the net tangible book value per share of
our common stock. Therefore, if you purchase any shares of our common
stock upon exercise of the warrants in this offering, you will incur immediate
and substantial dilution in the pro forma net tangible book value per share of
common stock from the price per share that you pay for the common
stock. If the holders of outstanding options or warrants exercise
those options or warrants at prices below the public offering price, you will
incur further dilution.
There
is no public market for the preferred stock or the warrants to purchase common
stock in this offering.
There is
no established public trading market for the preferred stock or the warrants
being offered in this offering, and we do not expect a market to develop. In
addition, we do not intend to apply for listing the preferred stock or the
warrants on any securities exchange or for quotation on the NASDAQ Capital
Market. Without an active market, the liquidity of the preferred stock or the
warrants will be limited.
Our
stock price is volatile, and you may not be able to resell your shares at or
above the offering price.
The
market price of our common stock has been, and we expect will continue to be,
subject to significant volatility. The value of our common stock may
decline regardless of our operating performance or prospects. Factors
affecting our market price include:
·
|
our
perceived prospects;
|
·
|
variations
in our operating results and whether we have achieved key business
targets;
|
·
|
changes
in, or our failure to meet, revenue
estimates;
|
·
|
changes
in securities analysts’ buy/sell
recommendations;
|
·
|
differences
between our reported results and those expected by investors and
securities analysts;
|
·
|
announcements
of new contracts by us or our
competitors;
|
·
|
reaction
to any acquisitions, joint ventures or strategic investments announced by
us or our competitors; and
|
·
|
general
economic, political or stock market
conditions.
|
If
the trading price of our common stock falls, our common stock could be delisted
from the Nasdaq Capital Market.
We must
meet Nasdaq’s continuing listing requirements in order for our common stock to
remain listed on the Nasdaq Capital Market. The listing criteria we must meet
include, but are not limited to, a minimum bid price for our common stock of
$1.00 per share. The recent trading price of our common stock has
fallen below that level, and has been as low as $0.58 per share within the last
twelve months. The closing price on April 17, 2009 was $1.24 per
share. Failure to meet Nasdaq’s continued listing criteria may result
in the delisting of our common stock from the Nasdaq Capital
Market. A delisting from the Nasdaq Capital Market will make the
trading market for our common stock less liquid, and will also make us
ineligible to use Form S-3 to register the sale of shares of our common stock or
to register the resale of our securities held by certain of our security holders
with the SEC, thereby making it more difficult and expensive for us to register
our common stock or other securities and raise additional capital.
Our
stockholders may be diluted by the exercise of outstanding warrants to purchase
common stock.
As of March 31, 2009, we have
certain outstanding warrants to purchase 2,618,943 shares of our common stock at
an exercise price of $0.86 per share, that were originally issued in connection
with previous equity financing transactions in March 2007 and May
2007. When originally issued, those warrants represented the right to
purchase 588,010 shares of our common stock, with a weighted average exercise
price of $3.83 per share. The number of shares of our common stock
issuable upon exercise of those warrants was increased, and the exercise price
per share was reduced, as a result of antidilution adjustments following our
sale of common stock, preferred stock and warrants on March 3,
2009. The exercise of those warrants would result in ownership
dilution of our existing common stockholders. Those warrants are
subject to further antidilution adjustment in the event we were to issue
additional shares of common stock at an effective price below $0.86 per
share.
Future
sales of common stock by our existing stockholders may cause our stock price to
fall.
The
market price of our common stock could decline as a result of sales by our
existing stockholders of shares of common stock in the market, or the perception
that these sales could occur. These sales might also make it more difficult for
us to sell equity securities at a time and price that we deem appropriate. As of
March 31, 2009, we have approximately 31,612,799 shares of common stock
outstanding (which includes 791,480 unvested shares of restricted stock granted
to our employees), and we have warrants to purchase 7,181,406 shares of common
stock (of which warrants to purchase 2,618,943 shares are subject to adjustment
as described above) and options to purchase 2,050,597 shares of common stock
outstanding. All of the shares of common stock issuable upon exercise
of our outstanding warrants and any vested options will be freely tradable
without restriction under the federal securities laws unless purchased by our
affiliates.
We
do not anticipate declaring any cash dividends on our common stock.
We have
never declared or paid cash dividends on our common stock and do not plan to pay
any cash dividends in the near future. Our current policy is to
retain all funds and earnings for use in the operation and expansion of our
business. In addition, our debt agreement prohibits the payment of
cash dividends or other distributions on any of our capital stock except
dividends payable in additional shares of capital stock.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement and the accompanying prospectus (including any document
incorporated by reference herein or therein) include forward-looking statements.
We have based these forward-looking statements on our current expectations and
projections about future events. Forward-looking statements involve
risks and uncertainties including, without limitation, our ability to raise
capital to finance our operations, the effectiveness, profitability and the
marketability of our services, our ability to protect our proprietary
information, general economic and business conditions, the impact of
technological developments and competition, adverse results of any legal
proceedings, the impact of current, pending or future legislation and regulation
of the solar power industry, our ability to enter into acceptable relationships
with one or more manufacturers for solar panel components and the ability of
such contract manufacturers to manufacture products or components of an
acceptable quality on a cost-effective basis, our ability to attract or retain
qualified senior management personnel, including sales and marketing and
technical personnel and other risks detailed from time to time in our filings
with the SEC. We make such forward-looking statements pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. In this prospectus supplement and the accompanying prospectus
(including any documents incorporated by reference herein or therein), words
such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “projects,” “predicts,” “intends,”
“potential,” and similar expressions (as well as other words or expressions
referencing future events, conditions or circumstances) are intended to identify
forward-looking statements.
Our
actual results and the timing of certain events may differ materially from the
results discussed, projected, anticipated or indicated in any forward-looking
statements. Any forward-looking statement should be considered in
light of factors discussed under “Risk Factors” and elsewhere in this prospectus
supplement and the accompanying prospectus (including any documents incorporated
by reference herein or therein).
We
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date they are made. We
disclaim any obligation, except as specifically required by law and the
rules of the Securities and Exchange Commission, to publicly update or
revise any such statements to reflect any change in company expectations or in
events, conditions or circumstances on which any such statements may be based,
or that may affect the likelihood that actual results will differ from those set
forth in the forward-looking statements.
USE
OF PROCEEDS
We estimate that the net proceeds to us from the
sale of securities to be offered by this prospectus supplement will be
approximately $407,000, after deducting the placement
agents’ fees and estimated expenses of this
offering. In
addition, if all of the warrants offered by this prospectus supplement are fully
exercised for cash, we will receive additional proceeds of approximately
$1.4 million. There can be no assurance that
we will be successful in selling any or all of the securities offered hereby.
Because there is no minimum offering amount required as a condition to closing
in this offering, we may sell less than all of the securities offered hereby,
which may significantly reduce the amount of proceeds received by
us.
We intend
to use the net proceeds for general corporate purposes. General
corporate purposes may include capital expenditures, future acquisitions,
working capital and repayment of other debt. We may invest the net
proceeds temporarily until we use them for their stated purpose.
DIVIDEND
POLICY
To date,
we have paid no cash dividends to our shareholders and we do not intend to pay
cash dividends in the foreseeable future.
CAPITALIZATION
The
following table summarizes our cash position and capitalization as of
December 31, 2008 on an actual basis and as adjusted to reflect the sale of
425,000 shares of our common stock as a result of the partial
exercise of outstanding Series G Warrants at a price $1.12 per share in
connection with our issuance of the additional Series G Warrants offered
hereby, after deducting the related placement agent fees and estimated expenses
of this offering, and reflecting the amendment of our line of credit facility in
early March 2009. You should read this information in conjunction
with our consolidated financial statements and the related notes beginning on
page 29 of our Annual Report on Form 10-K for the year ended December 31,
2008, which we have filed with the SEC.
|
|
As of December 31, 2008
|
|
|
|
Actual (1)
|
|
|
As Adjusted
|
|
|
|
|
|
|
(unaudited)
|
|
Cash and cash
equivalents
|
|
$
|
148,230
|
|
|
$
|
1,201,156
|
|
Restricted
cash
|
|
|
17,500,000
|
|
|
|
—
|
|
Total cash
position
|
|
$
|
17,648,230
|
|
|
$
|
1,201,156
|
|
|
|
|
|
|
|
|
|
|
Long term debt, including current
portion and & including warrant liability
|
|
$
|
19,545,526
|
|
|
$
|
2,908,245
|
|
Stockholders’
equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value;
1,000,000 shares authorized; none issued
|
|
$
|
—
|
|
|
$
|
-
|
|
Common stock, $0.001 par value,
50,000,000 shares authorized; 28,460,837 shares issued and outstanding,
actual; 31,211,418 shares issued and outstanding, as
adjusted
|
|
|
28,460
|
|
|
|
31,211
|
|
Additional paid-in
capital
|
|
|
52,821,104
|
|
|
|
53,008,560
|
|
Accumulated
deficit
|
|
|
(36,975,231
|
)
|
|
|
(36,975,231
|
)
|
Total
capitalization
|
|
$
|
35,419,859
|
|
|
$
|
18,972,785
|
|
(1) As
derived from our audited financial statements as of December 31,
2008.
|
Amounts
representing common stock outstanding on December 31, 2008 exclude the
following:
·
|
1,366,931
shares of common stock issuable upon exercise of stock options outstanding
under our stock option plans, at a weighted average exercise price of
$5.14 per share;
|
·
|
3,645,588
additional shares of common stock reserved for issuance under various
outstanding warrant agreements, at a weighted average exercise price of
$3.46;
|
·
|
1,974,210
additional shares of common stock reserved for future issuance under our
2006 Incentive Stock Plan and 4,000,000 shares of common stock reserved
for future issuance under our 2001 Stock Option Plan;
and
|
·
|
879,581
unvested shares of restricted stock granted under our 2006 Incentive Stock
Plan.
|
As of
December 31, 2008, there are warrants outstanding to purchase 1,614,655 shares
of our common stock. Of these warrants, warrants outstanding to
purchase 588,010 shares of our common stock at a weighted average exercise price
of $3.83, which were issued in March 2007 and May 2007, are subject to
adjustment as a result of the issuance of the common stock, preferred stock and
warrants being offered hereby, such that these outstanding warrants will become
exercisable for an aggregate of 2,618,943 shares of our common stock with an
exercise price of $0.86 per share upon the issuance of the units
we issued on March 3, 2009 (including the adjustment as a result of
the conversion of the preferred stock).
DILUTION
If you
invest in our common stock through exercise of our Series G Warrants, your
ownership interest will be diluted by the difference between the price per share
you pay and the net tangible book value per share of our common stock
immediately after this offering. Our net tangible book value as of
December 31, 2008 was approximately $15,499,833 or $0.54 per share of our
common stock. Our net tangible book value per share represents our
total tangible assets less total liabilities, divided by the number of shares of
our common stock outstanding as of December 31, 2008. After
giving effect to the sale of 425,000 shares of our common stock at the price of
$1.12 per share upon the partial exercise of outstanding Series G Warrants
in connection with the issuance of the additional Series G Warrants we are
offering hereby (and excluding shares of common stock issued and any proceeds
that we may receive upon exercise of the newly issued warrants), after deducting
the related placement agents’ fees and estimated offering expenses payable by
us, our net tangible book value as of December 31, 2008 would have been
approximately $15,690,040, or $0.52 per share of our common
stock. This amount represents a decrease in net tangible book value
of $0.02 per share to our existing stockholders and an immediate dilution in net
tangible book value of $0.60 per share to new investors purchasing securities in
this offering. We determine dilution by subtracting the adjusted net
tangible book value per share after this offering from the assumed public
offering price per share of common stock upon exercise of Series G
Warrants. The following table illustrates the dilution in net
tangible book value per share to new investors.
Assumed public offering price per
share
|
|
|
|
|
$
|
1.12
|
|
|
|
|
|
|
|
|
|
Net tangible book value per share
as of December 31, 2008
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in net tangible book
value per share attributable to this offering
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net tangible book value
per share as of December 31, 2008 after giving effect to this
offering
|
|
|
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
Dilution in net tangible book
value per share to new investors
|
|
|
|
|
|
$
|
0.60
|
|
The
foregoing table is based on 28,460,837 shares of common stock outstanding as of
December 31, 2008 and does not take into effect further dilution to new
investors that could occur as follows:
·
|
1,366,931
shares of common stock issuable upon exercise of stock options outstanding
under our stock option plans, at a weighted average exercise price of
$5.14 per share;
|
·
|
3,645,588
additional shares of common stock reserved for issuance under various
outstanding warrant agreements, at a weighted average exercise price of
$3.46;
|
·
|
1,974,210
additional shares of common stock reserved for future issuance under our
2006 Incentive Stock Plan and 4,000,000 shares of common stock reserved
for future issuance under our 2001 Stock Option Plan;
and
|
·
|
879,581
unvested shares of restricted stock granted under our 2006 Incentive Stock
Plan.
|
As of
December 31, 2008, there are warrants outstanding to purchase 1,614,655 shares
of our common stock. Of these warrants, warrants outstanding to
purchase 588,010 shares of our common stock at a weighted average exercise price
of $3.83, which were issued in March 2007 and May 2007, are subject to
adjustment as a result of the issuance of the common stock, preferred stock and
warrants being offered hereby, such that these outstanding warrants will become
exercisable for an aggregate of 2,618,943 shares of our common stock with an
exercise price of $0.86 per share upon the issuance of the units
we issued on March 3, 2009 (including the adjustment as a result of
the conversion of the preferred stock).
To the
extent options or warrants outstanding as of December 31, 2008 have been or
may be exercised or other shares are issued, there may be further dilution to
new investors.
DESCRIPTION
OF SERIES G WARRANTS
The
warrants in this offering will be issued pursuant to an Amendment Agreement
between each of the investors and us. You should review a copy of the Amendment
Agreement, and the form of Series G Warrant, which have been filed as an exhibit
to a Current Report on Form 8-K dated April 20, 2009 and filed with the
Securities and Exchange Commission in connection with this offering, for a
complete description of the terms and conditions applicable to the Series G
Warrants. The following is a brief summary of the warrants and is subject in all
respects to the provisions contained in the Series G Warrants.
Each
Series G Warrant represents the right to purchase up to one share of common
stock at an exercise price equal to $1.12 per share, subject to adjustment as
described below. Each Series G Warrant is immediately
exercisable, through and including August 10, 2009.
If,
during the period commencing on June 3, 2009 and ending on August 10, 2009, (i)
the volume weighted average price (“VWAP”) per share of our common stock for
each of at least 4 out of 5 consecutive trading days during such 5 day period
(the “Measurement Period”) exceeds $1.30, (ii) the daily trading volume in our
common stock for each trading day during the Measurement Period exceeds
$175,000, and (iii) the holder of the Series G Warrant is not in possession
of any material non-public information regarding us, then we can call for the
mandatory exercise of these warrants, but not in an amount exceeding up to
one-third of the original number of warrant shares issuable under such
Series G Warrant for any single mandatory exercise (the “Put”), so long as
we have honored all notices of exercise, the registration statement covering
such shares remains effective and our common stock continues to be listed or
traded on an accepted trading market. We cannot exercise the Put
within four days of a prior Put, within two days of receipt of a notice of
exercise, or on a date when the VWAP is less than $1.30.
We will
not effect any exercise if after giving effect to the issuance after exercise,
the holder, together with its affiliates and any person acting as a group with
such holder, would beneficially own in excess of 4.99% of our outstanding common
stock, except as otherwise elected by a warrant holder s provided in the warrant
agreement.
The
exercise price and the number of shares underlying the Series G Warrants
are subject to appropriate adjustment in the event of stock splits, stock
dividends on our common stock, stock combinations, subsequent rights offerings,
pro rata distributions, or similar events affecting our common stock. In
addition, in the event we consummate any transaction effecting a disposition of
all or substantially all of our assets, purchase offer, tender offer or exchange
offer accepted by the holders of 50% or more of our outstanding common stock,
reclassification, reorganization or recapitalization, spin off event or other
stock or share purchase agreement or other business combination, whereby more
than 50% of our outstanding shares are acquired (each a “Fundamental
Transaction”), in which our common stock is converted into or exchanged for
securities, cash or other property, then following such event, the holders of
the Series G Warrants will be entitled to receive upon exercise of such
warrants the kind and amount of securities, cash or other property which the
holders would have received had they exercised such warrants immediately prior
to such reorganization event. In addition, in the event of any
Fundamental Transaction completed for cash, as a transaction under Rule 13e-3 of
the Securities Exchange Act of 1934, or involving a person not trading on a
national securities exchange, then the holder of the warrant has the right to
require us to purchase the warrant for an amount of cash equal to the
Black-Scholes value of the remaining unexercised portion of the
warrant.
No
fractional shares of common stock will be issued in connection with the exercise
of a Series G Warrant. In lieu of fractional shares, we will at our
election either pay the holder an amount in cash equal to the fractional amount
multiplied by the exercise price or round up to the next whole
share. If we fail to timely deliver certificates following exercise
of a Series G Warrant, we will be obligated for liquidated damages and
compensation for any purchases made by the holder to cover any shares not timely
delivered.
A
Series G Warrant may be transferred by a holder so long as the transferee
is reasonably acceptable to us, upon surrender of the warrant to us, properly
endorsed (by the holder executing an assignment in the form attached to the
warrant) and upon payment of any necessary tax or other governmental charge
imposed upon such transfer.
The
Series G Warrants will not be listed on any securities exchange or
automated quotation system and we do not intend to arrange for any exchange or
quotation system to list or quote the warrants.
OVERVIEW
OF FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our
primary capital requirement is to fund purchases of solar panels and inverters.
Significant sources of liquidity are cash on hand, cash flows from operating
activities, working capital and proceeds from equity
financings. Additional information regarding our financial condition,
liquidity and capital resources is included in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2008 filed with the SEC, as well as any
amendments thereto reflected in subsequent filings with the SEC, which are
incorporated herein by reference in their entirety.
We are
offering the additional Series G Warrants directly to the
investors. The Amendment Agreement under which the additional
Series G Warrants will be issued provides that the obligations of the
investors are subject to certain conditions precedent, including the absence of
any material adverse change in our business and the receipt of certain opinions,
letters and certificates from our counsel and us.
Confirmations
and definitive prospectuses will be distributed to all investors who agree to
acquire additional Series G Warrants informing investors of the closing
date as to such warrants. We currently anticipate that closing of the
sale of all such additional warrants will take place on or about April 20, 2009.
Investors will also be informed of the date and manner in which they must
transmit the purchase price for the related partial exercise of the
Series G Warrants they previously acquired.
Although
there is no involvement by any placement agents in connection with this offering
of additional Series G Warrants, we have previously entered into a
placement agent agreement dated February 26, 2009 under which Cowen and Company,
LLC agreed to act as lead placement agent and Roth Capital Partners, LLC agreed
to act as a co-placement agent for the sale of 1,785,714 units consisting of an
aggregate of 1,785,714 shares of our common stock, 2,000 shares of our Series A
preferred stock, and warrants to purchase up to 4,075,685 shares of our common
stock, which was completed on March 3, 2009. The placement agents are not
purchasing or selling any shares or warrants by this prospectus supplement or
accompanying prospectus, nor are they required to arrange for the purchase or
sale of any specific number or dollar amount of shares or warrants by
us.
In
accordance with the terms of our existing agreements, for the first six months
following the March 3, 2009 closing date of the earlier offering, we agreed that
we will pay the placement agents on the one month anniversary of such closing
date a commission of 8.9% of the amount of gross proceeds we receive pursuant to
the cash exercise of any warrants during each such period. We may
also reimburse the placement agents for certain expenses incurred by them up to
a maximum amount of $75,000. We have granted to Cowen and Company,
LLC a right to participate in specified transactions that may occur within
twelve months from the closing date of that offering. The placement
agents will not receive any commission with respect to the shares of common
stock issuable upon exercise of the warrants, except as previously
disclosed. The following table shows the per share and total
placement agent fees to be paid to the placement agents by us in connection with
this offering. These amounts are shown assuming the exercise of
previously issued Series G Warrants for 425,000 shares of our common
stock.
|
|
|
|
|
|
|
Placement
agent fees
|
|
$ |
0.07 |
|
|
$ |
28,560.00 |
|
There is no minimum offering amount
required as a condition to closing in this offering. Accordingly, we
may issue additional Series G Warrants to purchase substantially less than
1,275,000 shares, and we may receive proceeds for the exercise previously issued
Series G Warrants for fewer than 425,000 shares, in which case our net
proceeds would be substantially reduced and the total placement agent fees may
be substantially less than the maximum total set forth above. The
estimated offering expenses payable by us, in addition to the placement agents’
fee of $28,560, are approximately $40,000, which includes legal, accounting and
printing costs and various other fees associated with registering and listing
the shares of common stock. After deducting certain fees due to the
placement agents and our estimated offering expenses, we expect the net proceeds
from this offering to be up to approximately $407,000.
We have
agreed to indemnify the placement agents against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, and liabilities
arising from breaches of representations and warranties contained in the
placement agent agreement. We have also agreed to contribute to
payments the placement agents may be required to make in respect of such
liabilities.
We, and
our directors and executive officers, have agreed, subject to limited
exceptions, that we and they will not offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, or announce the intention to
otherwise dispose of, any shares of our common stock or securities convertible
into or exchangeable or exercisable for any shares of our common stock, enter
into any swap, hedge or similar agreement or arrangement that transfers, in
whole or in part, any of the economic consequences of ownership of our common
stock, without, in each case, the prior written consent of Cowen and Company,
LLC for a period of 90 days after the March 3, 2009, offering as set forth in
the placement agent agreement. If, however, (i) we issue an earnings
release or material news or a material event relating to us occurs during the
last 17 days of the “lock-up” period, or (ii) prior to the expiration of the
“lock-up” period, we announce that we will release earnings results during the
16-day period beginning on the last day of the “lock-up” period, the “lock-up”
period shall be extended and the foregoing restrictions will continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material
event. Cowen and Company, LLC, may, in its sole discretion and at any
time without notice, release all or any portion of the securities subject to
these “lock-up” agreements.
The
transfer agent for our common stock is Empire Stock Transfer, Inc.
Our
common stock is quoted on the NASDAQ Capital Market under the symbol
“AKNS.”
LEGAL
MATTERS
Certain
legal matters relating to the validity of the warrants and the underlying shares
of common stock offered by this prospectus supplement and the accompanying
prospectus will be passed upon for us by DLA Piper LLP (US).
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We have
filed with the SEC a registration statement on Form S-3, of which this
prospectus supplement and the accompanying prospectus are a part, under the
Securities Act of 1933, as amended, to register the securities offered by this
prospectus supplement. However, this prospectus supplement and the
accompanying prospectus do not contain all of the information contained in the
registration statement and the exhibits and schedules to the registration
statement. We encourage you to carefully read the registration
statement and the exhibits and schedules to the registration
statement.
As
a public company, we are required to file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and
copy any of our materials on file with the SEC at the SEC’s Public Reference
Room at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
DC 20549, as well as at the SEC’s regional office at 5757 Wilshire
Boulevard, Suite 500, Los Angeles, California 90036. Our
filings are available to the public over the Internet at the SEC’s website at
http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room.
AKEENA
SOLAR, INC.
COMMON
STOCK
PREFERRED
STOCK
DEBT
SECURITIES
WARRANTS
TO PURCHASE COMMON STOCK, PREFERRED STOCK OR DEBT SECURITIES
UNITS
We may
from time to time in one or more offerings offer and sell up to $30,000,000
aggregate dollar amount of common stock, preferred stock, debt securities,
warrants to purchase common stock, preferred stock or debt securities, or any
combination of the foregoing, either individually or as units comprised of one
or more of the other securities. We will provide the specific terms
for each of these securities in supplements to this prospectus. We
may sell these securities to or through underwriters or dealers and also to
other purchasers or through agents. We will set forth the names of
any underwriters, dealers or agents in the accompanying prospectus supplement
applicable to the sale of such securities. You should read carefully
this prospectus and any supplement before you invest.
Where
necessary, the applicable prospectus supplement will contain information about
certain United States Federal income tax considerations relating to, and any
listing on a securities exchange of, the securities covered by such prospectus
supplement.
Our
common stock is listed on the NASDAQ Capital Market under the symbol
“AKNS.” On January 26, 2009, the last reported sale price of our
common stock on the NASDAQ Capital Market was $2.00.
Investing
in any of our securities involves risk. You should carefully consider
the discussion regarding risk factors beginning on page 6 of this prospectus
before you make an investment in the securities.
This
prospectus may not be used to offer or sell any securities unless it is
accompanied by the applicable prospectus supplement.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus if
truthful or complete. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is January 30, 2009.
TABLE
OF CONTENTS
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ABOUT
THIS PROSPECTUS
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3 |
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PROSPECTUS
SUMMARY
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4 |
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SECURITIES
WE MAY OFFER
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4 |
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RISK
FACTORS
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6 |
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DISCLOSURE
REGARDING FORWARD-LOOKING INFORMATION
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6 |
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USE
OF PROCEEDS
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|
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6 |
|
RATIO
OF EARNINGS TO FIXED CHARGES
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|
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6 |
|
SECURITIES
WE MAY OFFER
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7 |
|
DESCRIPTION
OF COMMON STOCK AND PREFERRED STOCK
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7 |
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DESCRIPTION
OF DEBT SECURITIES
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10 |
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DESCRIPTION
OF WARRANTS
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18 |
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DESCRIPTION
OF UNITS
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20 |
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PLAN
OF DISTRIBUTION
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20 |
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WHERE
YOU CAN FIND ADDITIONAL INFORMATION
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23 |
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INFORMATION
INCORPORATED BY REFERENCE
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23 |
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EXPERTS
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25 |
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LEGAL
MATTERS
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25 |
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ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission, or the “SEC”, using a “shelf” registration
process. Under this shelf registration process, we may from time to
time in one or more offerings sell common stock, preferred stock, debt
securities or warrants to purchase common stock, preferred stock or debt
securities, or any combination of the foregoing, either individually or as units
comprised of one or more of the other securities, in one or more offerings up to
a total dollar amount of $30,000,000. We have provided to you in this
prospectus a general description of the securities we may offer. Each
time we sell securities, we will, to the extent required by law, provide a
prospectus supplement that will contain specific information about the terms of
the offering. We may also add, update or change in any accompanying
prospectus supplement or any related free writing prospectus we may authorize to
be delivered to you any of the information contained in this
prospectus. To the extent there is a conflict between the information
contained in this prospectus and any prospectus supplement or any related free
writing prospectus, you should rely on the information in the prospectus
supplement or the related free writing prospectus, provided that if any
statement in one of these documents is inconsistent with a statement in another
document having a later date — for example, a document incorporated by reference
in this prospectus or any prospectus supplement or any related free writing
prospectus — the statement in the document having the later date modifies or
supersedes the earlier statement.
You
should rely only on the information contained or incorporated by reference in
this prospectus and any prospectus supplement. We have not authorized any
dealer, salesman or any other person to provide you with additional or different
information. This prospectus and any prospectus supplement are not an offer to
sell or the solicitation of an offer to buy any securities other than the
securities to which they relate and are not an offer to sell or the solicitation
of an offer to buy securities in any jurisdiction to any person to whom it is
unlawful to make an offer or solicitation in that jurisdiction. You should not
assume that the information in this prospectus or any prospectus supplement or
in any document incorporated by reference in this prospectus or any prospectus
supplement is accurate as of any date other than the date of the document
containing the information. We will disclose any material changes in our affairs
in a post-effective amendment to the registration statement of which this
prospectus is a part, a prospectus supplement, or a future filing with the
Securities and Exchange Commission incorporated by reference in this
prospectus.
The terms
“Akeena Solar,” “we,” “us,” “our,” and the “Company” refer only to Akeena Solar,
Inc.
As
permitted by the rules and regulations of the SEC, the registration statement,
of which this prospectus forms a part, includes additional information not
contained in this prospectus. You may read the registration statement
and the other reports we file with the SEC at the SEC’s web site or at the SEC’s
offices described below under the heading “Where You Can Find Additional
Information.”
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere in this
prospectus. We urge you to read this entire prospectus carefully and
any accompanying documents incorporated by reference before making an investment
decision.
About
Akeena Solar, Inc.
Akeena
Solar is a leading designer and integrator of solar power systems. We market,
sell, design and install systems for residential and commercial customers,
sourcing components (such as solar modules and inverters) from manufacturers
such as Suntech, Kyocera, SMA and Fronius. We currently service customers in
California, Colorado, Connecticut, Hawaii, New York, New Jersey and
Pennsylvania. According to data compiled by the California Energy
Commission and the New Jersey Clean Energy Program, over the past three years
Akeena Solar has been one of the largest national integrators of residential and
small commercial solar power systems in the United States. To date,
we have installed approximately 3,000 solar power systems. Since the
commencement of our operations in 2001, our sales have steadily grown, reaching
approximately $7.2 million in 2005, $13.4 million in 2006,
$32.2 million in 2007 and $29.9 million in the first three
quarters of 2008.
Akeena
Solar was formed on February 23, 2001 as a California corporation under the
name “Akeena, Inc.” and reincorporated as a Delaware corporation on June
2, 2006, at which time its name was changed to “Akeena Solar, Inc.” On
August 11, 2006, we entered into a reverse merger transaction (the
“Merger”) with Fairview Energy Corporation, Inc.
(“Fairview”). Fairview had been in the development stage and had not
commenced business operations prior to the Merger. Since the
stockholders of Akeena Solar owned a majority of the outstanding shares of
Fairview common stock immediately following the Merger, and the management and
board of Akeena Solar became the management and board of Fairview immediately
following the Merger, the Merger was accounted for as a reverse merger
transaction and Akeena Solar was deemed to be the acquirer.
Our
corporate headquarters are located at 16005 Los Gatos Boulevard, Los Gatos,
California 95032. Additional offices are located in Fresno (Clovis),
Lake Forest, Palm Springs, San Diego, Santa Rosa and Thousand Oaks, California,
Denver, Colorado, and Milford, Connecticut. We maintain installation
offices at all of these facilities. Our telephone number is (408)
402-9400. Additional information about Akeena Solar is available on
our website at http://www.akeena.com. The information on our web site
is not incorporated herein by reference.
SECURITIES
WE MAY OFFER
With this
prospectus, we may offer common stock, preferred stock, debt securities and
warrants, or any combination of the foregoing, either individually or as units
comprised of one or more of the other securities. The aggregate
initial offering price of all securities we sell in the primary offering under
this prospectus will not exceed $30,000,000. If we issue debt
securities at a discount from their original stated principal amount, then, for
purposes of calculating the total dollar amount of all securities issued under
this prospectus, we will treat the initial offering price of the debt securities
as the total original principal amount of the debt securities. Each
time we offer securities with this prospectus, we will provide offerees with a
prospectus supplement that will contain the specific terms of the securities
being offered. The following is a summary of the securities we may
offer with this prospectus.
We may
sell the securities to or through underwriters, dealers or agents or directly to
purchasers. We, as well as any agents acting on our behalf, reserve
the sole right to accept and to reject in whole or in part any proposed purchase
of securities. Each prospectus supplement will set forth the names of
any underwriters, dealers or agents involved in the sale of securities described
in that prospectus supplement and any applicable fee, commission or discount
arrangements with them.
Common
Stock
We may
offer shares of our common stock, par value $0.001 per share, either alone or
underlying other registered securities convertible into or exercisable for our
common stock. Holders of our common stock are entitled to such
dividends as our board of directors may declare from time to time out of legally
available funds, subject to the preferential rights of the holders of any shares
of our preferred stock that are outstanding or that we may issue in the
future. Currently, we do not pay any dividends. Each
holder of our common stock is entitled to one vote per share. Holders
of our common stock have no preemptive rights. In this prospectus, we
provide a general description of, among other things, our dividend policy and
the rights and restrictions that apply to holders of our common
stock.
Preferred
Stock
We may
issue shares of preferred stock in one or more classes or series. Our
board of directors or a committee designated by our board of directors will
determine the dividend, voting and conversion rights and other provisions at the
time of sale. The particular terms of each class or series of
preferred stock, including redemption privileges, liquidation preferences,
voting rights, dividend rights and/or conversion rights, will be more fully
described in the applicable prospectus supplement relating to the preferred
stock offered thereby.
Debt
Securities
We may
offer general debt obligations, which may be secured or unsecured, senior or
subordinated and convertible into shares of our common stock. In this
prospectus, we refer to the senior debt securities and the subordinated debt
securities together as the “debt securities.” We may issue debt
securities under a note purchase agreement or under an indenture to be entered
between us and a trustee; forms of the indentures are included as exhibits to
the registration statement of which this prospectus is a part. The
indenture does not limit the amount of securities that may be issued under it
and provides that debt securities may be issued in one or more
series. The senior debt securities will have the same rank as all of
our other indebtedness that is not subordinated. The subordinated
debt securities will be subordinated to our senior debt on terms set forth in
the applicable prospectus supplement. In addition, the subordinated
debt securities will be effectively subordinated to creditors and preferred
stockholders of our subsidiaries. Our board of directors will
determine the terms of each series of debt securities being
offered. This prospectus contains only general terms and provisions
of the debt securities. The applicable prospectus supplement will
describe the particular terms of the debt securities offered
thereby.
Warrants
We may
offer warrants for the purchase of debt securities, shares of preferred stock or
shares of common stock. We may issue the warrants by themselves or
together with debt securities, preferred stock or common stock and the warrants
may be attached to or separate from any offered securities. Each
series of securities warrants will be issued under a separate warrant agreement
to be entered into between us and the investors or a warrant
agent. Our board of directors will determine the terms of the
warrants. This prospectus contains only general terms and provisions
of the warrants. The applicable prospectus supplement will describe
the particular terms of the warrants being offered thereby.
RISK
FACTORS
Investment
in our securities involves risks. Prior to making a decision about
investing in our securities, you should consider carefully the risk factors,
together with all of the other information contained or incorporated by
reference in this prospectus and any prospectus supplement, including any
additional specific risks described in the section entitled “Risk Factors”
contained in any supplements to this prospectus and in our Annual Report on Form
10-KSB for the fiscal year ended December 31, 2007 and in our quarterly reports
on Form 10-Q for the quarterly periods ended March 31, 2008, June 30, 2008 and
September 30, 2008 filed with the SEC, as well as any amendments thereto
reflected in subsequent filings with the SEC, which are incorporated herein by
reference in their entirety. Each of these risk factors could have a
material adverse affect on our business, results of operations, financial
position or cash flows, which may result in the loss of all or part of your
investment.
DISCLOSURE
REGARDING FORWARD-LOOKING INFORMATION
This
prospectus, any prospectus supplement and the information incorporated by
reference in this prospectus and any prospectus supplement contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934
(collectively, the Private Securities Litigation Reform Act of
1995). These forward-looking statements are based on our current
expectations and beliefs, including estimates and projections about our
industry. Forward-looking statements may be identified by use of
terms such as “anticipates,” “expects,” “intends,” “plans,” “seeks,”
“estimates,” “believes” and similar expressions, although some forward-looking
statements are expressed differently. Statements concerning our
financial position, business strategy and plans or objectives for future
operations are forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict and may cause actual results to
differ materially from management’s current expectations. Such risks
and uncertainties include those referenced herein under “Risk Factors.” The
forward-looking statements in this prospectus speak only as of the time they are
made and do not necessarily reflect our outlook at any other point in
time.
Except as
may be required under the federal securities laws, we undertake no obligation to
publicly update forward-looking statements, whether as a result of new
information, future events or otherwise. You are advised, however, to
read any further disclosures we make on related subjects in our Form 10-K, Form
10-Q and Form 8-K reports to the Securities and Exchange
Commission. For any forward-looking statements contained in any
document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995.
USE
OF PROCEEDS
Except as
described in any prospectus supplement, we currently intend to use the net
proceeds from the sale of the securities for general corporate purposes, which
may include the repayment or refinancing of indebtedness or the acquisition of
complementary products or businesses. We will have significant
discretion in the use of any net proceeds. Investors will be relying
on the judgment of our management regarding the application of the proceeds of
any sale of the securities. We may invest the net proceeds
temporarily until we use them for their stated purpose.
When we
offer a particular series of securities, we will describe the intended use of
the net proceeds from that offering in a prospectus supplement. The
actual amount of net proceeds we spend on a particular use will depend on many
factors, including, our future revenue growth, if any, our future capital
expenditures and the amount of cash required by our operations. Many
of these factors are beyond our control. Therefore, we will retain
broad discretion in the use of the net proceeds.
RATIO
OF EARNINGS TO FIXED CHARGES
We
present below our ratio of earnings to fixed charges. Earnings
available to cover fixed charges consist of income (loss) from continuing
operations before income taxes plus fixed charges. Fixed charges
consist of interest expense, including amortization of debt issuance costs, and
the portion of rental expense we believe to be representative of
interest.
|
|
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Year Ended
December 31,
|
|
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Nine months ended September 30,
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
|
|
|
Earnings available to cover fixed
charges
|
|
$ |
(14,739,788 |
) |
|
$ |
(10,757,960 |
) |
|
$ |
(1,712,693 |
) |
|
$ |
42,041 |
|
|
$ |
180,047 |
|
|
$ |
27,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Fixed charges(1)
|
|
$ |
430,410 |
|
|
$ |
288,819 |
|
|
$ |
96,548 |
|
|
$ |
40,189 |
|
|
$ |
24,036 |
|
|
$ |
18,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Ratio of earnings to fixed
charges
|
|
|
(2)
|
|
|
|
(2)
|
|
|
|
(2)
|
|
|
|
1.0 |
|
|
|
7.5 |
|
|
|
1.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Consists
of interest expense on all indebtedness (including amortization of
deferred financing costs) and the portion of operating lease rental
expense that is representative of the interest
factor.
|
SECURITIES
WE MAY OFFER
We may
offer shares of common stock, shares of preferred stock, debt securities or
warrants to purchase common stock, preferred stock or debt securities, or any
combination of the foregoing, either individually or as units comprised of one
or more of the other securities. We may offer up to $30,000,000 of
securities under this prospectus. If securities are offered as units,
we will describe the terms of the units in a prospectus supplement.
DESCRIPTION
OF COMMON STOCK AND PREFERRED STOCK
The
following description of our common stock and preferred stock, together with the
additional information we include in any applicable prospectus supplement,
summarizes the material terms and provisions of the common stock and the
preferred stock that we may offer pursuant to this prospectus. While
the terms we have summarized below will apply generally to any future common
stock or preferred stock that we may offer, we will describe the particular
terms of any class or series of these securities in more detail in the
applicable prospectus supplement. For the complete terms of our
common stock and preferred stock, please refer to our certificate of
incorporation and our By-Laws that are incorporated by reference into the
registration statement of which this prospectus is a part or may be incorporated
by reference in this prospectus or any prospectus supplement. The
terms of these securities may also be affected by the General Corporation Law of
the State of Delaware. The summary below and that contained in any
prospectus supplement are qualified in their entirety by reference to our
certificate of incorporation and our By-Laws.
Authorized
Capitalization
We have
51,000,000 shares of capital stock authorized under our certificate of
incorporation, consisting of 50,000,000 shares of common stock and 1,000,000
shares of preferred stock. As of January 5, 2009, we had 29,345,993
shares of common stock outstanding and no shares of preferred stock
outstanding. The authorized shares of common stock and preferred
stock are available for issuance without further action by our stockholders,
unless such action is required by applicable law or the rules of any stock
exchange on which our securities may be listed or traded. If the
approval of our stockholders is not so required, our board of directors may
determine not to seek stockholder approval.
Common
Stock
Holders
of our common stock are entitled to such dividends as may be declared by our
board of directors out of funds legally available for such purpose, subject to
any preferential dividend rights of any then outstanding preferred
stock. The shares of common stock are neither redeemable nor
convertible. Holders of common stock have no preemptive or
subscription rights to purchase any of our securities.
Each
holder of our common stock is entitled to one vote for each such share
outstanding in the holder’s name. No holder of common stock is
entitled to cumulate votes in voting for directors.
In the
event of our liquidation, dissolution or winding up, the holders of our common
stock are entitled to receive pro rata our assets which are legally available
for distribution, after payments of all debts and other liabilities and subject
to the prior rights of any holders of preferred stock then
outstanding. All of the outstanding shares of our common stock are,
and the shares of common stock issued upon the conversion of any securities
convertible into our common stock will be, fully paid and
non-assessable. The shares of common stock offered by this prospectus
or upon the conversion of any preferred stock or debt securities or exercise of
any warrants offered pursuant to this prospectus, when issued and paid for, will
also be, fully paid and non-assessable.
Our
common stock is listed on the NASDAQ Capital Market under the symbol
“AKNS.” Empire Stock Transfer, Inc. is the transfer agent and
registrar for our common stock. Empire Stock Transfer, Inc.’s address
is 2470 St. Rose Parkway, Suite 304, Henderson, NV 89074, and their telephone
number is (702) 818-5898.
Preferred
Stock
Our
certificate of incorporation permits us to issue up to 1,000,000 shares of
preferred stock in one or more series and with rights and preferences that may
be fixed or designated by our board of directors without any further action by
our stockholders. Although it has no present intention to do so, our
board of directors may issue preferred stock with terms that could adversely
affect the voting power of the holders of common stock. If we issue
preferred stock, it may have the effect of delaying, deferring or preventing a
change of control.
Preferred
stock could thus be issued quickly with terms calculated to delay or prevent a
change in control of our company or to make removal of management more
difficult. Additionally, the issuance of preferred stock may decrease
the market price of our common stock. The number of authorized shares
of preferred stock may be increased or decreased, but not decreased below the
number of shares then outstanding, by the affirmative vote of the holders of a
majority of the common stock without a vote of the holders of preferred stock,
or any series of preferred stock, unless a vote of any such holder is required
pursuant to the terms of such series of preferred stock.
The
following description sets forth certain general terms and provisions of the
preferred stock we may issue. If we offer convertible preferred
stock, such stock will be convertible into shares of our common
stock. With respect to any convertible preferred stock or preferred
stock (each referred to herein as preferred stock) we may choose to offer, the
specific designations and rights will be described in the prospectus supplement
relating to the preferred stock offered, including the following
terms. Each time that we issue a new series of preferred stock, we
will file with the Delaware Secretary of State and with the SEC a definitive
certificate of designations which will state the designation, powers,
preferences, rights and qualifications, limitations and restrictions of that
series of preferred stock. In addition, the prospectus supplement
relating to that new series of preferred stock will specify the particular
amount, price and other terms of that new series. These terms may
include:
·
|
the
designation of the series, which may be by distinguishing number, letter
or title;
|
·
|
the
number of shares of the series, which number the board of directors may
thereafter (except where otherwise provided in the preferred stock
designation) increase or decrease (but not below the number of shares
thereof then outstanding);
|
·
|
the
price at which the preferred stock will be
issued;
|
·
|
the
dividend rate, the dates on which the dividends will be payable, if any,
whether dividends shall be cumulative or noncumulative and other terms
relating to the payment of dividends on the preferred
stock;
|
·
|
the
redemption rights and price or prices, if any, for shares of the
series;
|
·
|
whether
the preferred stock is redeemable or subject to a sinking fund, and the
terms and amount of such sinking fund provided for the purchase or
redemption of shares of the series;
|
·
|
the
amounts payable on shares of the series, and the special or relative
rights of such shares, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of our
company;
|
·
|
whether
the shares of the series shall be convertible into shares of any other
class or series, or any other security, of our company or any other
corporation, and, if so, the specification of such other class or series
or such other security, the conversion price or prices or rate or rates,
any adjustments thereof, the date or dates as of which such shares shall
be convertible and all other terms and conditions upon which such
conversion may be made;
|
·
|
any
listing of the preferred stock on any securities
exchange;
|
·
|
the
relative ranking and preferences of the preferred stock as to dividend
rights and rights upon liquidation and dissolution or winding
up;
|
·
|
restrictions
on the issuance of shares of the same series or of any other class or
series;
|
·
|
the
voting rights, if any, of the holders of shares of the series, provided
that no share of preferred stock of any series will be entitled to more
than one vote per share of preferred stock;
and
|
·
|
any
additional rights, preferences, qualifications, limitations and
restrictions of the preferred
stock.
|
Any
prospectus supplement that we file in connection with an offering of preferred
stock will describe all material terms of such series of preferred stock,
including the rights to obtain common stock, if any, issuable upon conversion of
such preferred stock. However, the description of the terms of the
preferred stock to be set forth in an applicable prospectus supplement will not
be complete and will be subject to and qualified in its entirety by reference to
the certificate of amendment to our certificate of incorporation relating to the
applicable series of preferred stock, together with our By-Laws. The
registration statement of which this prospectus forms a part currently does or
will in the future include the certificate of amendment and our By-Laws as
exhibits or incorporate them by reference.
The
preferred stock will, if and when issued, be fully paid and
non-assessable. The holders of the preferred stock will not have
preemptive rights.
Anti-Takeover
Effects of Certain Provisions of Delaware Law and Our Charter
Documents
The
following is a summary of certain provisions of Delaware law, our certificate of
incorporation and our By-Laws. This summary does not purport to be
complete and is qualified in its entirety by reference to the corporate law of
Delaware and our certificate of incorporation and By-Laws.
Effect of Delaware Anti-Takeover
Statute. We are subject to Section 203 of the Delaware General
Corporation Law, an anti-takeover law. In general, Section 203
prohibits a Delaware corporation from engaging in any business combination with
any interested stockholder for a period of three years following the date that
the stockholder became an interested stockholder, unless:
·
|
prior
to that date, the board of directors of the corporation approved either
the business combination or the transaction that resulted in the
stockholder becoming an interested
stockholder;
|
·
|
upon
consummation of the transaction that resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85%
of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares of voting stock outstanding (but not the voting stock owned by the
interested stockholder) those shares owned by persons who are directors
and officers and by excluding employee stock plans in which employee
participants do not have the right to determine whether shares held
subject to the plan will be tendered in a tender or exchange offer;
or
|
·
|
on
or subsequent to that date, the business combination is approved by the
board of directors of the corporation and authorized at an annual or
special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66-2⁄3% of the outstanding voting stock that
is not owned by the interested
stockholder.
|
Section
203 defines “business combination” to include the following:
·
|
any
merger or consolidation involving the corporation and the interested
stockholder;
|
·
|
any
sale, transfer, pledge or other disposition of 10% or more of the assets
of the corporation involving the interested
stockholder;
|
·
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subject
to certain exceptions, any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the
interested stockholder;
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any
transaction involving the corporation that has the effect of increasing
the proportionate share of the stock of any class or series of the
corporation beneficially owned by the interested stockholder;
or
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the
receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation.
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In
general, Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation, or who beneficially owns 15% or more of the outstanding voting
stock of the corporation at anytime within a three year period immediately prior
to the date of determining whether such person is an interested stockholder, and
any entity or person affiliated with or controlling or controlled by any of
these entities or persons.
Our Charter Documents. Our charter
documents include provisions that may have the effect of discouraging, delaying
or preventing a change in control or an unsolicited acquisition proposal that a
stockholder might consider favorable, including a proposal that might result in
the payment of a premium over the market price for the shares held by our
stockholders. Certain of these provisions are summarized in the
following paragraphs.
“Blank check” Preferred
Stock. Our certificate of incorporation permits us to issue up
to 1,000,000 shares of preferred stock in one or more series and with rights and
preferences that may be fixed or designated by our board of directors without
any further action by our stockholders. Although it has no present
intention to do so, our board of directors may issue preferred stock with
special voting rights or terms that could adversely affect the voting power of
the holders of common stock. Preferred stock could thus be issued
quickly with terms calculated to delay or prevent a change in control of our
company or to make removal of management more difficult. If we issue
preferred stock, it may have the effect of delaying, deferring or preventing a
change of control.
Stockholder Action by Written
Consent. Our By-Laws provide that a special meeting of
stockholders may be called only by the chairman of the board, a majority of the
entire board of directors or any officer instructed by the directors to call the
meeting. Stockholders are not permitted to call, or to require that
the board of directors call, a special meeting of
stockholders. Moreover, the business permitted to be conducted at any
special meeting of stockholders is limited to the business brought before the
meeting pursuant to the notice of the meeting given. Our By-Laws
establish an advance notice procedure for stockholders to nominate candidates
for election as directors or to bring other business before meetings of our
stockholders.
DESCRIPTION
OF DEBT SECURITIES
General
The debt
securities that we may issue may constitute debentures, notes, bonds or other
evidences of indebtedness of Akeena Solar, to be issued in one or more series,
which may include senior debt securities, and subordinated debt
securities. The particular terms of any series of debt securities we
offer, including the extent to which the general terms set forth below may be
applicable to a particular series, will be described in a prospectus supplement
relating to such series.
Debt
securities that we may issue may be issued under a senior indenture between us
and a trustee, or a subordinated indenture between us and a
trustee. We have filed forms of the indentures as exhibits to the
registration statement of which this prospectus is a part. For ease
of reference in this section, we refer to the indentures collectively as the
“indenture.” If
we enter into any revised indenture or indenture supplement, we will file a copy
of that supplement with the SEC.
THE
FOLLOWING DESCRIPTION IS A SUMMARY OF THE MATERIAL PROVISIONS OF THE
INDENTURE. IT DOES NOT RESTATE THE INDENTURE IN ITS
ENTIRETY. THE INDENTURE IS GOVERNED BY THE TRUST INDENTURE ACT OF
1939. THE TERMS OF THE DEBT SECURITIES INCLUDE THOSE STATED IN THE
INDENTURE AND THOSE MADE PART OF THE INDENTURE BY REFERENCE TO THE TRUST
INDENTURE ACT. WE URGE YOU TO READ THE INDENTURE BECAUSE IT, AND NOT
THIS DESCRIPTION, DEFINES YOUR RIGHTS AS A HOLDER OF THE DEBT
SECURITIES.
The
indenture contains no covenant or provision which affords debt holders
protection in the event of a highly leveraged transaction.
Information
You Will Find in the Prospectus Supplement
The
indenture provides that we may issue debt securities from time to time in one or
more series by resolution of our board of directors or by means of a
supplemental indenture and that we may denominate the debt securities and make
them payable in foreign currencies. The indenture does not limit the
aggregate principal amount of debt securities that can be issued
thereunder. The prospectus supplement for a series of debt securities
will provide information relating to the terms of the series of debt securities
being offered, which may include:
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the
title and denominations of the debt securities of the
series;
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any
limit on the aggregate principal amount of the debt securities of the
series;
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the
date or dates on which the principal and premium, if any, with respect to
the debt securities of the series are payable or the method of
determination thereof;
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the
rate or rates, which may be fixed or variable, at which the debt
securities of the series shall bear interest, if any, or the method of
calculating and/or resetting such rate or rates of
interest;
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the
dates from which such interest shall accrue or the method by which such
dates shall be determined and the basis upon which interest shall be
calculated;
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the
interest payment dates for the series of debt securities or the method by
which such dates will be determined, the terms of any deferral of interest
and any right of ours to extend the interest payments
periods;
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the
place or places where the principal and interest on the series of debt
securities will be payable;
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the
terms and conditions upon which debt securities of the series may be
redeemed, in whole or in part, at our option or
otherwise;
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our
obligation, if any, to redeem, purchase, or repay debt securities of the
series pursuant to any sinking fund or other specified event or at the
option of the holders and the terms of any such redemption, purchase, or
repayment;
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the
terms, if any, upon which the debt securities of the series may be
convertible into or exchanged for other securities, including, among other
things, the initial conversion or exchange price or rate and the
conversion or exchange period;
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if
the amount of principal, premium, if any, or interest with respect to the
debt securities of the series may be determined with reference to an index
or formula, the manner in which such amounts will be
determined;
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if
any payments on the debt securities of the series are to be made in a
currency or currencies (or by reference to an index or formula) other than
that in which such securities are denominated or designated to be payable,
the currency or currencies (or index or formula) in which such payments
are to be made and the terms and conditions of such
payments;
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any
changes or additions to the provisions of the indenture dealing with
defeasance, including any additional covenants that may be subject to our
covenant defeasance option;
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the
currency or currencies in which payment of the principal and premium, if
any, and interest with respect to debt securities of the series will be
payable, or in which the debt securities of the series shall be
denominated, and the particular provisions applicable thereto in
accordance with the indenture;
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the
portion of the principal amount of debt securities of the series which
will be payable upon declaration of acceleration or provable in bankruptcy
or the method by which such portion or amount shall be
determined;
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whether
the debt securities of the series will be secured or guaranteed and, if
so, on what terms;
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any
addition to or change in the events of default with respect to the debt
securities of the series;
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the
identity of any trustees, authenticating or paying agents, transfer agents
or registrars;
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the
applicability of, and any addition to or change in, the covenants
currently set forth in the
indenture;
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the
subordination, if any, of the debt securities of the series and terms of
the subordination;
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any
other terms of the debt securities of the series;
and
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whether
securities of the series shall be issuable as registered securities or
bearer securities (with or without interest coupons), and any restrictions
applicable to the offering, sale or delivery of such bearer securities and
the terms upon which such bearer securities of a series may be exchanged
for registered securities, and vice
versa.
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Holders
of debt securities may present debt securities for exchange in the manner, at
the places, and subject to the restrictions set forth in the debt securities,
the indenture, and the prospectus supplement. We will provide these
services without charge, other than any tax or other governmental charge payable
in connection therewith, but subject to the limitations provided in the
indenture, any board resolution establishing such debt securities and any
applicable indenture supplement. Debt securities in bearer form and
the coupons, if any, appertaining thereto will be transferable by
delivery.
Senior
Debt
We may
issue senior debt securities under the indenture and any coupons that will
constitute part of our senior debt. Unless otherwise set forth in the
applicable indenture supplement or in any board resolution establishing such
debt securities and described in a prospectus supplement, the senior debt
securities will be senior unsecured obligations, ranking equally with all of our
existing and future senior unsecured debt. The senior debt securities
will be senior to all of our subordinated debt and junior to any secured debt we
may incur as to the assets securing such debt.
Subordinated
Debt
We may
issue subordinated debt securities under the indenture and any coupons that will
constitute part of such subordinated debt. These subordinated debt
securities will be subordinate and junior in right of payment, to the extent and
in the manner set forth in the indenture and any applicable indenture
supplement, to all of our senior indebtedness.
If this
prospectus is being delivered in connection with a series of subordinated debt
securities, the accompanying prospectus supplement or the information
incorporated by reference will set forth the approximate amount of senior
indebtedness, if any, outstanding as of the end of our most recent fiscal
quarter.
Interest Rate
Debt
securities that bear interest will do so at a fixed rate or a floating
rate. We may sell, at a discount below the stated principal amount,
any debt securities which bear no interest or which bear interest at a rate that
at the time of issuance is below the prevailing market rate. The
relevant prospectus supplement will describe the special United States federal
income tax considerations applicable to:
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any
discounted debt securities; and
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any
debt securities issued at par which are treated as having been issued at a
discount for United States federal income tax
purposes.
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Registered
Global Securities
We may
issue registered debt securities of a series in the form of one or more fully
registered global securities. We will deposit the registered global
security with a depositary or with a nominee for a depositary identified in the
prospectus supplement relating to such series. The global security or
global securities will represent and will be in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding registered debt securities of the series to be represented by the
registered global security or securities. Unless it is exchanged in
whole or in part for debt securities in definitive registered form, a registered
global security may not be transferred, except as a whole in three
cases:
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by
the depositary for the registered global security to a nominee of the
depositary;
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by
a nominee of the depositary to the depositary or another nominee of the
depositary; and
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by
the depositary or any nominee to a successor of the depositary or a
nominee of the successor.
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The
prospectus supplement relating to a series of debt securities will describe the
specific terms of the depositary arrangement concerning any portion of that
series of debt securities to be represented by a registered global
security. We anticipate that the following provisions will generally
apply to all depositary arrangements.
Upon the
issuance of a registered global security, the depositary will credit, on its
book-entry registration and transfer system, the principal amounts of the debt
securities represented by the registered global security to the accounts of
persons that have accounts with the depositary. These persons are
referred to as “participants.” Any underwriters, agents or debtors participating
in the distribution of debt securities represented by the registered global
security will designate the accounts to be credited. Only
participants or persons that hold interests through participants will be able to
beneficially own interests in a registered global security. The
depositary for a global security will maintain records of beneficial ownership
interests in a registered global security for
participants. Participants or persons that hold through participants
will maintain records of beneficial ownership interests in a global security for
persons other than participants. These records will be the only means
to transfer beneficial ownership in a registered global security.
The laws
of some states may require that specified purchasers of securities take physical
delivery of the securities in definitive form. These laws may limit
the ability of those persons to own, transfer or pledge beneficial interests in
global securities.
So long
as the depositary, or its nominee, is the registered owner of a registered
global security, the depositary or its nominee will be considered the sole owner
or holder of the debt securities represented by the registered global security
for all purposes under the indenture. Except as set forth below,
owners of beneficial interests in a registered global security:
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may
not have the debt securities represented by a registered global security
registered in their names;
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will
not receive or be entitled to receive physical delivery of debt securities
represented by a registered global security in definitive form;
and
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will
not be considered the owners or holders of debt securities represented by
a registered global security under the
indenture.
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Accordingly,
each person owning a beneficial interest in a registered global security must
rely on the procedures of the depositary for the registered global security and,
if the person is not a participant, on the procedures of the participant through
which the person owns its interests, to exercise any rights of a holder under
the indenture applicable to the registered global security.
We
understand that, under existing industry practices, if we request any action of
holders, or if an owner of a beneficial interest in a registered global security
desires to give or take any action which a holder is entitled to give or take
under the indenture, the depositary for the registered global security would
authorize the participants holding the relevant beneficial interests to give or
take the action, and the participants would authorize beneficial owners owning
through the participants to give or take the action or would otherwise act upon
the instructions of beneficial owners holding through them.
Payment
of Interest on and Principal of Registered Global Securities
We will
make principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee to the depositary or its nominee as the registered
owner of the registered global security. None of Akeena Solar, the
trustee, or any paying agent for debt securities represented by a registered
global security will have any responsibility or liability for:
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any
aspect of the records relating to, or payments made on account of,
beneficial ownership interests in such registered global
security;
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maintaining,
supervising, or reviewing any records relating to beneficial ownership
interests;
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the
payments to beneficial owners of the global security of amounts paid to
the depositary or its nominee; or
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any
other matter relating to the actions and practices of the depositary, its
nominee or any of its participants.
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We expect
that the depositary, upon receipt of any payment of principal, premium or
interest in respect of the global security, will immediately credit
participants’ accounts with payments in amounts proportionate to their
beneficial interests in the principal amount of a registered global security as
shown on the depositary’s records. We also expect that payments by
participants to owners of beneficial interests in a registered global security
held through participants will be governed by standing instructions and
customary practices. This is currently the case with the securities
held for the accounts of customers registered in “street name.” Such
payments will be the responsibility of participants.
Exchange
of Registered Global Securities
We may
issue debt securities in definitive form in exchange for the registered global
security if both of the following occur:
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the
depositary for any debt securities represented by a registered global
security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency registered under the Exchange Act;
and
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we
do not appoint a successor depositary within 90
days.
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In
addition, we may, at any time, determine not to have any of the debt securities
of a series represented by one or more registered global
securities. In this event, we will issue debt securities of that
series in definitive form in exchange for all of the registered global security
or securities representing those debt securities.
Our
Covenants
The
indenture includes covenants by us, including among other things that we will
make all payments of principal and interest at the times and places
required. The board resolution or supplemental indenture establishing
each series of debt securities may contain additional covenants, including
covenants which could restrict our right to incur additional indebtedness or
liens and to take certain actions with respect to our businesses and
assets.
Events of
Default
Unless
otherwise indicated in the applicable prospectus supplement, the following will
be events of default under the indenture with respect to each series of debt
securities issued under the indenture:
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failure
to pay when due any interest on any debt security of that series that
continues for 30 days;
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failure
to pay when due the principal of, or premium, if any, on, any debt
security of that series;
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default
in the payment of any sinking fund installment with respect to any debt
security of that series when due and
payable;
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failure
to perform any other covenant or agreement of ours under the indenture or
the supplemental indenture with respect to that series or the debt
securities of that series, continued for 90 days after written notice to
us by the trustee or holders of at least 25% in aggregate principal amount
of the outstanding debt securities of the series to which the covenant or
agreement relates;
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certain
events of bankruptcy, insolvency or similar proceedings affecting us and
our subsidiaries; and
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any
other event of default specified in any supplemental indenture under which
such series of debt securities is
issued.
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Except as
to certain events of bankruptcy, insolvency or similar proceedings affecting us
and except as provided in the applicable prospectus supplement, if any event of
default shall occur and be continuing with respect to any series of debt
securities under the indenture, either the trustee or the holders of at least
25% in aggregate principal amount of outstanding debt securities of such series
may accelerate the maturity of all debt securities of such
series. Upon certain events of bankruptcy, insolvency or similar
proceedings affecting us, the principal, premium, if any, and interest on all
debt securities of each series shall be immediately due and
payable.
After any
such acceleration, but before a judgment or decree based on acceleration has
been obtained by the trustee, the holders of a majority in aggregate principal
amount of each affected series of debt securities may waive all defaults with
respect to such series and rescind and annul such acceleration if all events of
default, other than the non-payment of accelerated principal, have been cured,
waived or otherwise remedied.
No holder
of any debt securities will have any right to institute any proceeding with
respect to the indenture or for any remedy under the indenture, unless such
holder shall have previously given to the trustee written notice of a continuing
event of default and the holders of at least 25% in aggregate principal amount
of the outstanding debt securities of the relevant series shall have made
written request and offered indemnity satisfactory to the trustee to institute
such proceeding as trustee, and the trustee shall not have received from the
holders of a majority in aggregate principal amount of the outstanding debt
securities of such series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. However,
such limitations do not apply to a suit instituted by a holder of a debt
security for enforcement of payment of the principal of and premium, if any, or
interest on such debt security on or after the respective due dates expressed in
such debt security.
Supplemental
Indentures
We and
the trustee may, at any time and from time to time, without prior notice to or
consent of any holders of debt securities after issuance of such debt
securities, enter into one or more supplemental indentures to, among other
things:
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secure
any series of debt securities;
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add
any additional Events of Default;
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to
evidence for the succession of another corporation to us and the
assumption by such successor of our covenants and obligations in the
indenture and the debt securities;
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surrender
any right or power conferred upon us under the indenture or to add to our
covenants for the protection of the holders of all or any series of debt
securities;
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cure
any ambiguity or to correct or supplement any provision contained in the
indenture, in any supplemental indenture or in any debt securities that
may be defective or inconsistent with any other provision contained
therein, so long as any such action does not adversely affect the
interests of the holders of debt securities of any series in any material
respect;
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add
or change or eliminate any of the provisions of the indenture to the
extent necessary to permit or facilitate the issuance of debt securities
in bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
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change
or eliminate any of the provisions of the indenture; provided that any
such change or elimination shall become effective only when there are no
debt securities outstanding of any series created prior to the execution
of such supplemental indenture;
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evidence
and provide for the acceptance of appointment by a successor or separate
trustee; and
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establish
the form or terms of debt securities of any series, in accordance with the
indenture.
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With the
consent of the holders of at least a majority in principal amount of debt
securities of each series affected by such supplemental indenture (each series
voting as one class), we and the trustee may enter into one or more supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the indenture or modifying in any manner
the rights of the holders of debt securities of each such series.
Notwithstanding
our rights and the rights of the trustee to enter into one or more supplemental
indentures with the consent of the holders of debt securities of the affected
series as described above, no such supplemental indenture to be entered into
after issuance of the debt securities shall, without the consent of the holder
of each outstanding debt security of the affected series, among other
things:
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change
the final maturity of the principal of, or any installment of interest on,
any debt securities;
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reduce
the principal amount of any debt securities or the rate of interest on any
debt securities;
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change
the currency in which any debt securities are
payable;
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release
any security interest that may have been granted with respect to such debt
securities;
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impair
the right of the holders to conduct a proceeding for any remedy available
to the trustee;
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reduce
the percentage in principal amount of any series of debt securities whose
holders must consent to an amendment or supplemental
indenture;
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modify
the ranking or priority of the
securities;
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reduce
any premium payable upon the redemption of any debt securities or change
the time at which any debt security may be redeemed;
or
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make
any change that adversely affects the relative rights of holders of
subordinated debt securities with respect to senior debt
securities.
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Satisfaction
and Discharge of the Indenture; Defeasance
Except to
the extent set forth in a supplemental indenture with respect to any series of
debt securities, we, at our election, may discharge the indenture and the
indenture shall generally cease to be of any further effect with respect to that
series of debt securities if (a) we have delivered to the trustee for
cancellation all debt securities of that series (with certain limited
exceptions) or (b) all debt securities of that series not previously delivered
to the trustee for cancellation shall have become due and payable, or are by
their terms to become due and payable within one year or are to be called for
redemption within one year, and we have deposited with the trustee the entire
amount sufficient to pay at maturity or upon redemption all such debt
securities.
In
addition, we have a “legal defeasance option” (pursuant to which we may
terminate, with respect to the debt securities of a particular series, all of
our obligations under such debt securities and the indenture with respect to
such debt securities) and a “covenant defeasance option” (pursuant to which we
may terminate, with respect to the debt securities of a particular series, our
obligations with respect to such debt securities under certain specified
covenants contained in the indenture). If we exercise our legal
defeasance option with respect to a series of debt securities, payment of such
debt securities may not be accelerated because of an event of
default. If we exercise our covenant defeasance option with respect
to a series of debt securities, payment of such debt securities may not be
accelerated because of an event of default related to the specified
covenants.
We may
exercise our legal defeasance option or our covenant defeasance option with
respect to the debt securities of a series only if we irrevocably deposit in
trust with the trustee cash or U.S. government obligations (as defined in the
indenture) for the payment of principal, premium, if any, and interest with
respect to such debt securities to maturity or redemption, as the case may
be. In addition, to exercise either of our defeasance options, we
must comply with certain other conditions, including the delivery to the trustee
of an opinion of counsel to the effect that the holders of debt securities of
such series will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred (and, in the case of legal
defeasance only, such opinion of counsel must be based on a ruling from the
Internal Revenue Service or other change in applicable Federal income tax
law).
The
trustee will hold in trust the cash or U.S. government obligations deposited
with it as described above and will apply the deposited cash and the proceeds
from deposited U.S. government obligations to the payment of principal, premium,
if any, and interest with respect to the debt securities of the defeased
series. In the case of subordinated debt securities, the money and
U.S. government obligations held in trust will not be subject to the
subordination provisions of the indenture.
Mergers,
Consolidations and Certain Sales of Assets
Under the
proposed form of indenture, we may not (1) consolidate with or merge into any
other person or entity or permit any other person or entity to consolidate with
or merge into us in a transaction in which we are not the surviving entity, or
(2) transfer, lease or dispose of all or substantially all of our assets to any
other person or entity unless:
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the
resulting, surviving or transferee entity shall be a corporation organized
and existing under the laws of the United States or any state thereof and
such resulting, surviving or transferee entity shall expressly assume, by
supplemental indenture, all of our obligations under the debt securities
and the indenture;
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immediately
after giving effect to such transaction (and treating any indebtedness
which becomes an obligation of the resulting, surviving or transferee
entity as a result of such transaction as having been incurred by such
entity at the time of such transaction), no default or event of default
would occur or be continuing; and
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we
shall have delivered to the trustee an officers’ certificate and an
opinion of counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with the
indenture.
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Governing
Law
The
indenture and the debt securities will be governed by the laws of the State of
New York.
No
Personal Liability of Directors, Officers, Employees and
Stockholders
No
director, officer, incorporator or stockholder of Akeena Solar, as such, shall
have any liability for any obligations of Akeena Solar under the debt securities
or the indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation, solely by reason of his, her, or its status as
director, officer, incorporator or stockholder of Akeena Solar. By
accepting a debt security, each holder waives and releases all such liability,
but only such liability. The waiver and release are part of the
consideration for issuance of the debt securities. Nevertheless, such
waiver may not be effective to waive liabilities under the federal securities
laws and it has been the view of the SEC that such a waiver is against public
policy.
Conversion or Exchange
Rights
Any debt
securities issued under the indenture may be convertible into or exchangeable
for shares of our equity securities. The terms and conditions of such
conversion or exchange will be set forth in the applicable prospectus
supplement. Such terms may include, among others, the
following:
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the
conversion or exchange price;
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the
conversion or exchange period;
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provisions
regarding our ability or that of the holder to convert or exchange the
debt securities;
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events
requiring adjustment to the conversion or exchange price;
and
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provisions
affecting conversion or exchange in the event of our redemption of such
debt securities.
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Concerning
the Trustee
The
indenture provides that there may be more than one trustee with respect to one
or more series of debt securities. If there are different trustees
for different series of debt securities, each trustee will be a trustee of a
trust under a supplemental indenture separate and apart from the trust
administered by any other trustee under such indenture. Except as
otherwise indicated in this prospectus or any prospectus supplement, any action
permitted to be taken by a trustee may be taken by the trustee only with respect
to the one or more series of debt securities for which it is the trustee under
an indenture. Any trustee under the indenture or a supplemental
indenture may resign or be removed with respect to one or more series of debt
securities. All payments of principal of, premium, if any, and
interest on, and all registration, transfer, exchange, authentication and
delivery of (including authentication and delivery on original issuance of the
debt securities), the debt securities of a series will be effected by the
trustee with respect to such series at an office designated by the
trustee.
The
indenture contains limitations on the right of the trustee, should it become a
creditor of Akeena Solar, to obtain payment of claims in certain cases or to
realize on certain property received in respect of any such claim as security or
otherwise. If the trustee acquires an interest that conflicts with
any duties with respect to the debt securities, the trustee is required to
either resign or eliminate such conflicting interest to the extent and in the
manner provided by the indenture.
Limitations
on Issuance of Bearer Debt Securities
Debt
securities in bearer form are subject to special U.S. tax requirements and may
not be offered, sold, or delivered within the United States or its possessions
or to a U.S. person, except in certain transactions permitted by U.S. tax
regulations. Investors should consult the relevant prospectus
supplement, in the event that bearer debt securities are issued for special
procedures and restrictions that will apply to such an offering.
DESCRIPTION
OF WARRANTS
We may
issue securities warrants for the purchase of debt securities, preferred stock
or common stock. Securities warrants may be issued independently or
together with debt securities, preferred stock or common stock and may be
attached to or separate from any offered securities. Each series of
securities warrants will be issued under a separate warrant agreement to be
entered into between us and a securities warrant agent. The
securities warrant agent will act solely as our agent in connection with the
securities warrants and will not assume any obligation or relationship of agency
or trust for or with any registered holders of securities warrants or beneficial
owners of securities warrants. This summary of some provisions of the
securities warrants is not complete. You should refer to the
securities warrant agreement, including the forms of securities warrant
certificate representing the securities warrants, relating to the specific
securities warrants being offered for the complete terms of the securities
warrant agreement and the securities warrants. The securities warrant
agreement, together with the terms of securities warrant certificate and
securities warrants, will be filed with the SEC in connection with the offering
of the specific securities warrants.
The
particular terms of any issue of securities warrants will be described in the
prospectus supplement relating to the issue. Those terms may
include:
·
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the
title of such warrants;
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·
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the
aggregate number of such warrants;
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·
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the
price or prices at which such warrants will be
issued;
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·
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the
currency or currencies (including composite currencies) in which the price
of such warrants may be payable;
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·
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the
terms of the securities purchasable upon exercise of such warrants and the
procedures and conditions relating to the exercise of such
warrants;
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·
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the
price at which the securities purchasable upon exercise of such warrants
may be purchased;
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the
date on which the right to exercise such warrants will commence and the
date on which such right shall
expire;
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any
provisions for adjustment of the number or amount of securities receivable
upon exercise of the warrants or the exercise price of the
warrants;
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if
applicable, the minimum or maximum amount of such warrants that may be
exercised at any one time;
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if
applicable, the designation and terms of the securities with which such
warrants are issued and the number of such warrants issued with each such
security;
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if
applicable, the date on and after which such warrants and the related
securities will be separately
transferable;
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information
with respect to book-entry procedures, if any;
and
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any
other terms of such warrants, including terms, procedures and limitations
relating to the exchange or exercise of such
warrants.
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The
prospectus supplement relating to any warrants to purchase equity securities may
also include, if applicable, a discussion of certain U.S. federal income tax and
ERISA considerations.
Securities
warrants for the purchase of preferred stock and common stock will be offered
and exercisable for U.S. dollars only. Securities warrants will be
issued in registered form only.
Each
securities warrant will entitle its holder to purchase the principal amount of
debt securities or the number of shares of preferred stock or common stock at
the exercise price set forth in, or calculable as set forth in, the applicable
prospectus supplement.
After the
close of business on the expiration date, unexercised securities warrants will
become void. We will specify the place or places where, and the
manner in which, securities warrants may be exercised in the applicable
prospectus supplement.
Upon
receipt of payment and the warrant certificate properly completed and duly
executed at the corporate trust office of the warrant agent or any other office
indicated in the applicable prospectus supplement, we will, as soon as
practicable, forward the purchased securities. If less than all of
the warrants represented by the warrant certificate are exercised, a new warrant
certificate will be issued for the remaining warrants.
Prior to
the exercise of any securities warrants to purchase debt securities, preferred
stock or common stock, holders of the securities warrants will not have any of
the rights of holders of the debt securities, preferred stock or common stock
purchasable upon exercise, including (i) in the case of securities warrants
for the purchase of debt securities, the right to receive payments of principal
of, any premium or interest on the debt securities purchasable upon exercise or
to enforce covenants in the applicable indenture, or (ii) in the case of
securities warrants for the purchase of preferred stock or common stock, the
right to vote or to receive any payments of dividends on the preferred stock or
common stock purchasable upon exercise.
DESCRIPTION
OF UNITS
General
We may
issue units comprised of one or more debt securities, shares of common stock,
shares of preferred stock and warrants in any combination. Each unit
will be issued so that the holder of the unit is also the holder of each
security included in the unit. Thus, the holder of a unit will have
the rights and obligations of a holder of each included security. The
unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately, at any time or
at any time before a specified date.
We will
describe in the applicable prospectus supplement the terms of the series of
units, including, but not limited to:
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the
designation and terms of the units and of the securities comprising the
units, including whether and under what circumstances those securities may
be held or transferred separately;
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any
provisions of the governing unit agreement that differ from those
described below; and
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any
provisions for the issuance, payment, settlement, transfer or exchange of
the units or of the securities comprising the
units.
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The
provisions described in this section, as well as those described under
“Description of Common Stock and Preferred Stock,” “Description of Debt
Securities” and “Description of Warrants” will apply to each unit and to any
common stock, preferred stock, debt security or warrant included in each unit,
respectively.
Issuance
in Series
We may
issue units in such amounts and in numerous distinct series as we
determine.
Enforceability
of Rights by Holders of Units
Each unit
agent will act solely as our agent under the applicable unit agreement and will
not assume any obligation or relationship of agency or trust with any holder of
any unit. A single bank or trust company may act as unit agent for
more than one series of units. A unit agent will have no duty or
responsibility in case of any default by us under the applicable unit agreement
or unit, including any duty or responsibility to initiate any proceedings at law
or otherwise, or to make any demand upon us. Any holder of a unit
may, without the consent of the related unit agent or the holder of any other
unit, enforce by appropriate legal action its rights as holder under any
security included in the unit.
We, the
unit agents and any of their agents may treat the registered holder of any unit
certificate as an absolute owner of the units evidenced by that certificate for
any purpose and as the person entitled to exercise the rights attaching to the
units so requested, despite any notice to the contrary.
PLAN
OF DISTRIBUTION
We may
sell the securities being offered hereby in one or more of the following ways
from time to time:
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through
agents to the public or to
investors;
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to
underwriters for resale to the public or to
investors;
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directly
to investors; or
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through
a combination of any of these methods of
sale.
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We will
set forth in a prospectus supplement the terms of that particular offering of
securities, including:
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the
name or names of any agents or
underwriters;
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the
purchase price of the securities being offered and the proceeds we will
receive from the sale;
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any
over-allotment options under which underwriters may purchase additional
securities from us;
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any
agency fees or underwriting discounts and other items constituting agents’
or underwriters’ compensation;
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any
initial public offering price;
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any
discounts or concessions allowed or reallowed or paid to dealers;
and
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any
securities exchanges or markets on which such securities may be
listed.
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The
maximum commission or discount to be received by any agent or underwriter will
not be greater than eight percent (8%) of the maximum gross proceeds of the
securities that may be sold under this prospectus.
Agents
We may
designate agents who agree to use their reasonable efforts to solicit purchases
of our securities for the period of their appointment or to sell our securities
on a continuing basis.
Underwriters
If we use
underwriters for a sale of securities, the underwriters will acquire the
securities for their own account. The underwriters may resell the
securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The obligations of the underwriters to purchase the securities
will be subject to the conditions set forth in the applicable underwriting
agreement. The underwriters will be obligated to purchase all the
securities of the series offered if they purchase any of the securities of that
series. We may change from time to time any initial public offering
price and any discounts or concessions the underwriters allow or reallow or pay
to dealers. We may use underwriters with whom we have a material
relationship. We will describe the nature of any such relationship in
any prospectus supplement naming any such underwriter. Only
underwriters we name in the prospectus supplement are underwriters of the
securities offered by the prospectus supplement.
Direct
Sales
We may
also sell securities directly to one or more purchasers without using
underwriters or agents. Underwriters, dealers and agents that
participate in the distribution of the securities may be underwriters as defined
in the Securities Act, and any discounts or commissions they receive from us and
any profit on their resale of the securities may be treated as underwriting
discounts and commissions under the Securities Act. We will identify
in the applicable prospectus supplement any underwriters, dealers or agents and
will describe their compensation. We may have agreements with the
underwriters, dealers and agents to indemnify them against specified civil
liabilities, including liabilities under the Securities
Act. Underwriters, dealers and agents may engage in transactions with
or perform services for us in the ordinary course of their
businesses.
Trading
Markets and Listing of Securities
Unless
otherwise specified in the applicable prospectus supplement, each class or
series of securities will be a new issue with no established trading market,
other than our common stock, which is listed on the NASDAQ Capital
Market. We may elect to list any other class or series of securities
on any exchange or market, but we are not obligated to do so. It is
possible that one or more underwriters may make a market in a class or series of
securities, but the underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. We cannot
give any assurance as to the liquidity of the trading market for any of the
securities.
Stabilization
Activities
Any
underwriter may engage in overallotment, stabilizing transactions, short
covering transactions and penalty bids in accordance with Regulation M under the
Exchange Act. Overallotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit
bids to purchase the underlying security so long as the stabilizing bids do not
exceed a specified maximum. Short covering transactions involve
purchases of the securities in the open market after the distribution is
completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a covering transaction to cover
short positions. Those activities may cause the price of the
securities to be higher than it would otherwise be. If commenced, the
underwriters may discontinue any of these activities at any time.
Passive
Market Making
Any
underwriters who are qualified market makers on the NASDAQ Capital Market may
engage in passive market making transactions in the securities on the NASDAQ
Capital Market in accordance with Rule 103 of Regulation M, during the business
day prior to the pricing of the offering, before the commencement of offers or
sales of the securities. Passive market makers must comply with
applicable volume and price limitations and must be identified as passive market
makers. In general, a passive market maker must display its bid at a
price not in excess of the highest independent bid for such
security. If all independent bids are lowered below the passive
market maker’s bid, however, the passive market maker’s bid must then be lowered
when certain purchase limits are exceeded.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We have
filed a registration statement on Form S-3 under the Securities Act with the
Securities and Exchange Commission to register the securities offered by this
prospectus. This prospectus, which constitutes a part of the
registration statement, does not contain all of the information set forth in the
registration statement or the exhibits and schedules which are a part of the
registration statement. For further information with respect to us
and our securities, please refer to the registration statement and the exhibits
and schedules filed with it. You may read and copy any document which
we file with the Securities and Exchange Commission at the Securities and
Exchange Commission’s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. You may obtain information on the operation of Public
Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330. We file annual, quarterly and current reports, proxy
statements, and other information with the Securities and Exchange Commission
and these reports, proxy statements, and other information can be inspected on
the Internet site maintained by the SEC at http://www.sec.gov and at
http://akeena.net/cm/Investor%20Relations/Home.html.
We are
also subject to the information and periodic reporting requirements of the
Exchange Act of 1934. We file annual, quarterly and current reports,
proxy statements, and other information with the Securities and Exchange
Commission to comply with the Exchange Act.
INFORMATION
INCORPORATED BY REFERENCE
The
Securities and Exchange Commission allows us to incorporate by reference the
information we file with them under certain conditions, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to
be a part of this prospectus and any information that we file subsequent to this
prospectus with the Securities and Exchange Commission will automatically update
and supersede this information. Our Exchange Act reports are filed
under Securities and Exchange Commission file number 0001347452. The
documents we are incorporating by reference are as follows:
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Our
Annual Report on Form 10-KSB for the year ended December 31, 2007 filed
with the Securities and Exchange Commission on March 19, 2008 and as
amended on Form 10-KSB/A filed on September 12,
2008;
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Our
Quarterly Report on Form 10-Q for the period ended March 31, 2008 filed
with the Securities and Exchange Commission on May 14,
2008;
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Our
Quarterly Report on Form 10-Q for the period ended June 30, 2008 filed
with the Securities and Exchange Commission on August 12,
2008;
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Our
Quarterly Report on Form 10-Q for the period ended September 30, 2008
filed with the Securities and Exchange Commission on November 14,
2008;
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The
description of our common stock contained in our registration statement on
Form 8-A filed with the Securities and Exchange Commission on September
21, 2007;
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Our
definitive proxy statement filed with the Securities and Exchange
Commission on September 11, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 16, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on March 19, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on April 25, 2008.
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 8, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on August 6, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on October 1, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on October 9, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on November 6, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on November 25, 2008;
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Our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 9, 2008; and
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Our
Current Report on Form 8-K filed with the Securities Exchange Commission
on December 16, 2008.
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All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the initial filing date of this prospectus, through the date
declared effective, until the termination of the offering of securities
contemplated by this prospectus shall be deemed to be incorporated by reference
into this prospectus. These documents that we file later with the
Securities and Exchange Commission and that are incorporated by reference in
this prospectus will automatically update information contained in this
prospectus or that was previously incorporated by reference into this
prospectus. You will be deemed to have notice of all information
incorporated by reference in this prospectus as if that information was included
in this prospectus.
We will
provide to any person, including any beneficial owner, to whom this prospectus
is delivered, a copy of any or all of the information that has been incorporated
by reference in this prospectus but not delivered with this prospectus, at no
cost to the requesting party, upon request to us in writing or by telephone
using the following information:
Akeena
Solar, Inc.
Attention:
General Counsel
16005 Los
Gatos Boulevard
Los
Gatos, California 95032
(408)
402-9400
EXPERTS
The
consolidated financial statements of Akeena Solar, Inc. as of December 31,
2007 and 2006 and for the years then ended have been included in this prospectus
in reliance upon the report of Burr, Pilger & Mayer LLP, independent
registered public accounting firm, included herein, given on the authority of
said firm as experts in accounting and auditing.
LEGAL
MATTERS
DLA Piper
LLP (US) has passed on the validity of the securities being offered in this
prospectus and counsel named in the applicable prospectus supplement will pass
upon legal matters for any underwriters, dealers or agents.
Akeena
Solar, Inc.
COMMON
STOCK
PREFERRED
STOCK
DEBT
SECURITIES
WARRANTS
PROSPECTUS
January
30, 2009
Series
G Warrants to Purchase 1,275,000 Shares
AKEENA
SOLAR, INC.
Common
Stock
Series
G Warrants
PROSPECTUS
SUPPLEMENT
April 20,
2009