U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Earliest event reported): August 30, 2000
SOLPOWER CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
NEVADA 0-29780 87-0384678
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
7309 East Stetson Drive, Suite 102
Scottsdale, Arizona 85251
(Address of Principal/executive Offices)
480-947-6366
(Registrant's Telephone Number Including Area Code)
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ITEM 2. ACQUISITION OF ASSETS
On August 30, 2000, Solpower Corporation acquired 50% of the outstanding
stock of Protocol Resource Management Inc., a private Ontario corporation with
offices in Aurora, Ontario, Canada. PICO Holdings, Inc., a NASDAQ listed
California corporation, acquired the remaining 50% interest in Protocol under
the same agreement. Protocol and Solpower previously were engaged in a joint
venture for the manufacture and distribution of SP34E(TM) through Solpower
Canada, an Ontario corporation, owned equally by Protocol and Solpower.
The amount paid for the acquisition was $1,500,000 (Canadian) in the form
of cash and promissory notes due on the second and third anniversaries of the
closing date. The promissory notes were issued by PICO. In the event that the
annual average EBITDA of Protocol for first two years following closing is not
at least $250,000 (Canadian), the amount of the second anniversary payment will
be reduced based on a formula. In the event that the annual EBITDA of Protocol
for third year following closing is not at least $250,000 (Canadian), the amount
of the third anniversary payment will also be subject to reduction based on a
formula.
The funds used by Solpower to complete its portion of the transaction were
provided in the form of a working capital loan from PICO in the amount of
$500,000. The Protocol shares held by Solpower as a result of the transaction
described herein secure the loan. Solpower granted PICO a warrant to purchase
1,000,000 shares of its common stock at $0.385 (110% of market price on the date
funds were advanced). The term of the promissory note is for three years, with
interest at LIBOR plus 2% payable semi-annually.
The Protocol shares were acquired from James Flowers, Patricia Flowers and
Florcor, Inc., none of whom are related parties to Solpower or PICO.
The assets of Protocol consist of plant and equipment used by Protocol in
its business of refrigerant blending, recycling, repackaging, conversion and
distribution services. Protocol is the largest HFC, R134a repackaging operation
in Canada and manufactures leading technology refrigerant reclaim and blending
equipment. Protocol has a fully operational SP34E(TM) refrigerant blending plant
capable of producing over 18,000 tons per annum. This facility is currently
producing and supplying SP34E(TM) to various Canadian customers including
Canadian Tire Corp., Canada's largest automotive service retailer, CAMCO Inc., a
division of GE, and Canada's largest appliance OEM service company, and other
major Canadian HVACR wholesalers with Canada-wide distribution. Solpower and
PICO intend to continue to operate Protocol and the Solpower Canada joint
venture in the same manner and expand the business of manufacturing and selling
SP34E(TM).
ITEM 7. FINANCIAL STATEMENTS
Financial statements of Protocol will be submitted within 60 days of this
filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 12, 2000. SOLPOWER CORPORATION
By: /s/ James H. Hirst
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James H. Hirst
Secretary/Treasurer
