SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 30, 1998
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Energy Research Corporation
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(Exact Name Of Registrant As Specified In Its Charter)
New York
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(State or Other Jurisdiction of Incorporation)
1-14204 06-0853042
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(Commission File Number) (I.R.S. Employer Identification No.)
3 Great Pasture Road, Danbury, Connecticut 06813
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(Address of Principal Executive Offices) (Zip Code)
(203) 825-6000
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
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On October 1, 1998, the Company issued a press release announcing that its
Board of Directors has approved a plan to effect a spin-off to its stockholders
of 100% of the shares of Evercel, Inc. ("Evercel"), a newly-formed, wholly-owned
subsidiary of the Company. The Company will transfer to Evercel the principal
assets and liabilities related to the Company's battery business group,
effective on or about October 31, 1998. Following the transfer, the Company will
distribute to its stockholders in a tax-free distribution one share of Evercel
Common Stock for each share of Common Stock of the Company held. The Company
will continue to operate its fuel cell business, and Evercel will own and
operate the battery business group. The transaction is subject to certain
conditions.
The press release is filed as an exhibit to this report and is incorporated
by reference herein.
Item 7. Financial Statements and Exhibits.
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Exhibit 99 Energy Research Corporation Press Release dated October 1, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: October 1, 1998 ENERGY RESEARCH CORPORATION
By:
\s\ Joseph G. Mahler
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Joseph G. Mahler
Senior Vice President, CFO
Treasurer/Corporate Secretary
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Contact: Rick Teller
The Teller Group, LLP
(781)545-3600
e-mail: [email protected]
FOR IMMEDIATE RELEASE
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ENERGY RESEARCH CORPORATION ANNOUNCES
SPIN-OFF OF ITS BATTERY BUSINESS GROUP TO SHAREHOLDERS
Danbury, Connecticut, October 1, 1998 -- Energy Research Corporation (AMEX:ERC)
announced today that its Board of Directors has approved a plan to effect a
spin-off to its stockholders of 100% of the shares of Evercel, Inc., a
newly-formed, wholly-owned subsidiary of ERC. ERC will transfer to Evercel the
principal assets and liabilities related to ERC's battery business group,
effective on or about October 31, 1998. Following the transfer, ERC will
distribute to its stockholders in a tax-free distribution one share of Evercel
Common Stock for each share of ERC Common Stock held. ERC will continue to
operate its fuel cell business, and Evercel will own and operate the battery
business group. The transaction is subject to certain conditions.
Jerry D. Leitman, ERC's President and Chief Executive Officer, said, "The
battery business group and the fuel cell business of ERC have distinctly
different investment, operating and financial characteristics. The spin-off of
Evercel will allow each company to more appropriately undertake capital
requirements and investment decisions and to pursue separate business
strategies. The spin-off will also allow investors to invest in either business
without consideration of the other."
The spin-off will be reflected in ERC's financial statements as a charge against
stockholders' equity. The anticipated pro forma consolidated effect on ERC of
the spin-off, if it had occurred on July 31, 1998, would have been to reduce
ERC's assets by approximately $3.6 million and stockholders' equity by
approximately $0.3 million.
Immediately after the distribution of Evercel's shares to ERC's stockholders, in
order to fund its commercialization efforts, Evercel plans to conduct a rights
offering to its stockholders. As described more fully in a Registration
Statement filed by Evercel with the Securities and Exchange Commission on
September 30, 1998, Evercel will grant at no cost to holders of its Common
Stock, transferable subscription rights ("Rights") to subscribe for and purchase
an additional share of Evercel's Common Stock. Each holder of Evercel's Common
Stock will receive one Right for each share of Common Stock held on the record
date (which has not yet been determined). Each Right will be exercisable, for a
period of approximately 30 days, to purchase one share of Common Stock of
Evercel at a purchase price of $2.00 per share. The Rights Offering will be made
only by means of a Prospectus which will be delivered to stockholders
concurrently with the distribution.
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Jerry D. Leitman will continue as President and Chief Executive Officer of the
Company and as Acting President and Chief Executive Officer of Evercel. ERC and
Evercel anticipate completing the spin-off and rights offering by the end of the
year.
Energy Research Corporation, located in Danbury and Torrington, Connecticut, is
an internationally recognized leader in the field of electrochemical technology
for electric power generation and storage. ERC is developing its Direct Fuel
Cells and batteries through funding from and in cooperation with government,
electric utility and major international industrial organizations.
This press release contains forward-looking statements concerning the transfer
of ERC's battery business group to Evercel, the completion of the spin-off of
Evercel to ERC's stockholders and the rights offering to Evercel's stockholders.
There are a variety of factors which could cause actual events to differ
materially from those projected in the forward-looking statements, including
without limitation, (i) the risk that the transfer of the battery business group
to Evercel, the spin-off or the rights offering may not be completed as the
result of future developments in ERC's or Evercel's business or conditions in
their industries, failure to obtain necessary government approvals, legal
opinions, or third party consents or other developments, (ii) unanticipated
costs and expenses or other events affecting ERC's or Evercel's business, and
(iii) other risks listed in the Company's SEC reports, including the reports on
Form 10-K for the year ended October 31, 1997 and Form 10-Q for the quarter
ended July 31, 1998.
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