Exhibit 4.2
UNITED STATES
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) August 23, 2021 (August 18, 2021)
MECHANICAL TECHNOLOGY INC
(Exact name of registrant as specified in its charter)
| Nevada | 000-06890 | 14-1462255 | ||
|
(State
or other jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS
Employer
Identification Number) |
|
325 Washington Avenue Extension Albany, New York |
12205 | |
| (Address of registrant's principal executive office) | (Zip code) |
(518) 218-2550
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) |
Name
of each exchange on which
registered |
||
|
Common Stock, par value $0.001 per share |
MKTY | The Nasdaq Stock Market | ||
| 9.0% Series A Cumulative Perpetual Preferred Stock | MKTYP | The Nasdaq Stock Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On August 18, 2021, Mechanical Technology, Incorporated, a Nevada corporation (the “Company”), entered into an Underwriting Agreement (the “Underwriting Agreement”) with Univest Securities, LLC, as representative of the several underwriters named therein, in connection with the offer and sale to such underwriters, in a firm commitment public offering (the “Offering”) of 720,000 shares of the Company’s 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, with a $25.00 liquidation preference per share (the “Series A Preferred Stock”). Pursuant to the Underwriting Agreement, the Company also provided the underwriters with a 45-day option to purchase up to an additional 108,000 shares of the Series A Preferred Stock on the same terms as the Shares sold in the Offering (the “Over-Allotment Option”). On August 23, 2021, the Company closed the Offering and issued and sold 720,000 shares of Series A Preferred Stock pursuant to the Underwriting Agreement (the “Shares”) for aggregate gross proceeds of $18,000,000 less underwriting discounts of 6.0% ($1,080,000) and other offering fees and expenses, resulting in aggregate net proceeds to the Company of approximately $16,092,500. In the event that the Over-Allotment Option is exercised by the underwriters, in full, that would result in additional aggregate gross proceeds of approximately $2,700,000 less applicable underwriter discounts and other offering fees and expenses.
The Shares offered for sale in the Offering were registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to: (i) a registration statement on Form S-1 (File No. 333-257300), which was initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 22, 2021, as amended, and was declared effective on August 18, 2021 (the “Registration Statement”); (ii) a registration statement on Form S-1 MEF (File No. 333-258919) filed by the Company with the SEC under Rule 462(b) of the Securities Act, which became effective upon its filing on August 18, 2021; and (iii) a final prospectus dated August 18, 2021 relating to the Offering, which was filed with the SEC on August 20, 2021.
In connection with the Offering, the Company’s Series A Preferred Stock was approved for listing on the Nasdaq Capital Market under the symbol “MKTYP” and began trading on August 20, 2021.
The Underwriting Agreement contains customary representations, warranties and agreements of the Company and customary indemnification rights and obligations of the parties thereto. The foregoing description of the Underwriting Agreement is qualified in its entirety by reference to the full text of such document, the form of which was previously filed by the Company with the SEC.
| Item 3.03. | Material Modification to Rights of Security Holders. |
As of the issuance by the Company of the Shares, which occurred on August 23, 2021, the ability of the Company to declare or pay dividends on, or purchase, redeem or otherwise acquire, shares of its common stock, par value $0.001 per share (“Common Stock”), or any shares of other stock of the Company that rank junior to or on parity with the Series A Preferred Stock either as to the payment of dividends and/or as to the distribution of assets upon the liquidation, dissolution or winding up of the Company is subject to certain restrictions in the event that the Company does not declare and pay (or set aside) dividends on the Series A Preferred Stock.
The terms of the Series A Preferred Stock, including such restrictions, are more fully described in Item 5.03 below, and this description is qualified in its entirety by reference to the Certificate of Designations (as defined in Item 5.03 below), a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On August 18, 2021, the Company filed a Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock of Mechanical Technology, Incorporated (the “Certificate of Designations”) with the Nevada Secretary of State to establish the voting powers, designations, preferences and relative participation and other rights and qualifications, limitations and restrictions of the Series A Preferred Stock. As described in Item 1.01 above, on August 23, 2021, the Company completed a public offering of, and issued, 720,000 Shares of Series A Preferred Stock. The following is a summary description of those terms and the general effect of the issuance of the Shares on the Company’s other classes of registered securities.
The Series A Preferred Stock will, as to dividend rights and rights as to the distribution of assets upon the Company’s liquidation, dissolution or winding-up, rank: (1) senior to all classes or series of Common Stock and to all other capital stock issued by the Company expressly designated as ranking junior to the Series A Preferred Stock; (2) on parity with any future class or series of the Company’s capital stock expressly designated as ranking on parity with the Series A Preferred Stock; (3) junior to any future class or series of the Company’s capital stock expressly designated as ranking senior to the Series A Preferred Stock; and (4) junior to all the Company’s existing and future indebtedness.
The Series A Preferred Stock has no stated maturity and is not subject to mandatory redemption or any sinking fund. In the event of the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of shares the Series A Preferred Stock are entitled to be paid out of the Company’s assets legally available for distribution to its stockholders (i.e., after satisfaction of all the Company’s liabilities to creditors, if any) and, subject to the rights of holders of any shares of each other class or series of capital stock ranking, as to rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, senior to the Series A Preferred Stock, a liquidation preference of $25.00 per share, plus any amount equal to any accumulated and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment may be made to holders of shares of Common Stock or any other class of or series of the Corporation’s capital stock ranking, as to rights to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up, junior to the Series A Preferred Stock.
The Company will pay cumulative cash dividends on the Series A Preferred Stock when, as and if declared by its board of directors (or a duly authorized committee of its board of directors), only out of funds legally available for payment of dividends. Dividends on the Series A Preferred Stock will accrue on the stated amount of $25.00 per share of the Series A Preferred Stock at a rate per annum equal to 9.0% (equivalent to $2.25 per year), payable monthly in arrears. Dividends on the Series A Preferred Stock declared by our board of directors (or a duly authorized committee of our board of directors) will be payable monthly in arrears on the final day of each month, beginning on August 31, 2021.
Generally, the Series A Preferred Stock is not redeemable by the Company prior to August 23, 2026. However, upon a change of control or delisting event (each as defined in the Certificate of Designations), the Company will have a special option to redeem the Series A Preferred Stock for a limited period of time.
Additionally, the Series A Preferred Stock is generally not convertible into or exchangeable for any other property or securities of the Company. However, upon a change of control or delisting event (each as defined in the Certificate of Designations), the holders of the Series A Preferred Stock will have the right to convert some or all of the Series A Preferred Stock held by such holder into a number of shares of Common Stock, subject to important limitations.
As further described in the Certificate of Designations, so long as any share of the Series A Preferred Stock remains outstanding, unless the Company has either paid or declared and set apart for payment full cumulative dividends on the Series A Preferred Stock for all past completed dividends, the Company will be restricted from making certain dividends and conducting certain redemption and repurchases with respect to its capital stock. The restrictions in the foregoing sentence are subject to limited exceptions.
Holders of shares of the Series A Preferred Stock generally have no voting rights, except as required by law and as provided in the Certificate of Designations. Voting rights for holders of the Series A Preferred Stock exist primarily with respect to material and adverse changes in the terms of the Series A Preferred Stock and the creation of additional classes or series of preferred stock that rank senior to the Series A Preferred Stock.
The Certificate of Designations became effective upon filing, and a copy is filed as Exhibit 4.1 to this Current Report on Form 8-K. The above description of the Certificate of Designations is a summary and, as such, does not purport to be complete and is qualified in its entirety by reference to the full text of the Certificate of Designations, which is incorporated herein by reference. A specimen certificate representing the Series A Preferred Stock is filed as Exhibit 4.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 8.01 Other Events.
On August 19, 2021, the Company issued a press release announcing the pricing of the Offering. A copy of the press release is filed as Exhibit 99.1 to this Form 8-K and is incorporated in this Item 8.01 by reference. On August 23, 2021, the Company issued a press release announcing the closing of the Offering. A copy of the press release is filed as Exhibit 99.2 to this Form 8-K and is incorporated in this Item 8.01 by reference.
This Form 8-K and Exhibits 99.1 and 99.2 contain forward-looking statements. Forward-looking statements include, but are not limited to, statements that express the Company's intentions, beliefs, expectations, strategies, predictions or any other statements related to the Company's future activities, or future events or conditions. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by its management. These statements are not guaranties of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks that may be included in documents that the Company files from time to time with the SEC. Any forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 8-K, except as required by law.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
Exhibit No. Description
| 1.1 | Form of Underwriting Agreement (1). |
| 4.1 | Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock filed with the Secretary of State of the State of Nevada on August 18, 2021 (2). |
| 4.2* | Form of 9.0% Series A Cumulative Perpetual Preferred Stock Certificate. |
| 99.1* | Press Release of Mechanical Technology, Incorporated dated August 19, 2021. |
| 99.2* | Press Release of Mechanical Technology, Incorporated dated August 23, 2021. |
*Filed herewith.
| (1) | Filed as Exhibit 1.1 to Amendment No. 1 to the Company’s Registration Statement on Form S-1, filed with the SEC on July 19, 2021. |
| (2) | Filed as Exhibit 4.1 to the Company’s Form 8-A, filed with the SEC on August 19, 2021. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 23, 2021 | MECHANICAL TECHNOLOGY, INCORPORATED | ||
| By: | /s/ Jessica L. Thomas | ||
|
Name: Jessica L. Thomas Title: Chief Financial Officer |
|||
Exhibit 4.2
Exhibit 99.1
Mechanical Technology, Incorporated Announces Pricing of Upsized $18 Million Preferred Stock Offering
ALBANY, N.Y., August 19, 2021 – Mechanical Technology, Incorporated (“MTI” or the “Company”), (NASDAQ: MKTY), the parent company of EcoChain, Inc. ("EcoChain"), a cryptocurrency mining business powered by renewable energy, and MTI Instruments, Inc. ("MTI Instruments"), a test and measurement instruments and systems business, today announced the pricing of its upsized underwritten public offering of 720,000 shares of its 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, with a $25.00 liquidation preference per share (the “Series A Preferred Stock”), at a price to the public of $25.00 per share. The Company expects to receive gross proceeds of $18.0 million, before deducting underwriting discounts and other estimated offering fees and expenses. The offering is expected to close on August 23, 2021, subject to customary closing conditions.
The Series A Preferred Stock is a new issue of securities with no established trading market. The Series A Preferred Stock have been approved for listing on the Nasdaq Stock Market LLC under the symbol “MKTYP” and the Company’s expects trading in the Series A Preferred Stock to begin within 10 days after the closing date.
The Company has granted the underwriters a 45-day option to purchase up to an additional 108,000 shares of the Series A Preferred Stock (representing 15% of the shares of the Series A Preferred Stock being sold in the offering) to cover over-allotments, if any. The underwriters may exercise this option at any time and from time to time during the 45-day period from the closing of the offering.
MTI intends to use the net proceeds of the offering for the acquisition, development and growth of data centers, including cryptocurrency mining processors, other computer processing equipment, data storage, electrical infrastructure, software and real property, and business, product line or asset acquisitions related to MTI Instruments and for working capital and general corporate purposes, which include, but are not limited to, operating expenses.
The Series A Preferred Stock is perpetual and has no maturity date. The Series A Preferred Stock is not redeemable prior to August 23, 2026, except under certain circumstances. On or after August 23, 2026, the Series A Preferred Stock may be redeemed at the Company’s option, in whole or in part, from time to time, at a redemption price of $25.00 per share of Series A Preferred Stock, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the date of such redemption. The Series A Preferred Stock may also be redeemed upon the occurrence of certain delisting or change in control events.
Univest Securities, LLC is acting as the sole book running manager for this offering.
The offering is being conducted pursuant to the Company's registration statement on Form S-1 (File No. 333-257300), as amended, including by its registration statement on Form S-1MEF filed pursuant to Rule 462(b), previously filed with and subsequently declared effective by the Securities and Exchange Commission (“SEC”). A final prospectus relating to the offering will be filed with the SEC and will be available on the SEC’s website at http://www.sec.gov. Electronic copies of the final prospectus relating to this offering, when available, may be obtained from Univest Securities, LLC, 375 Park Avenue, 15th Floor, New York, NY 10152, by phone (212) 343-8888 or e-mail info@univest.us.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About MTI
MTI is the parent company of MTI Instruments, Inc. and EcoChain, Inc. Through EcoChain, MTI develops cryptocurrency mining facilities powered by renewable energy that integrate with the blockchain network. Through MTI Instruments, MTI is engaged in the design, manufacture and sale of test and measurement instruments and systems that use a comprehensive array of technologies to solve complex, real-world applications in numerous industries. Those include manufacturing, electronics, semiconductor, solar, commercial and military aviation, automotive and data storage. For more information about MTI, please visit https://www.mechtech.com.
Forward Looking Statements
The statements in this press release, including with respect to the expected timing of the closing of the offering, the listing of the Series A Preferred Stock, the possible offering of additional shares of the Series A Preferred Stock and the anticipated use of proceeds, constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and are subject to certain risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Actual results could differ materially from those expressed or implied by such forward-looking statements as a result of various factors, including, but not limited to: (1) market conditions and the satisfaction of all conditions to, and the closing of, the offering; (2) those risk factors set forth in the Company's Registration Statement on Form S-1 (File No. 333-257300), as amended; and (3) other risks and uncertainties that may be detailed from time to time in MTI’s reports filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.
Contact Information:
Lisa
Brennan
lbrennan@mtiinstruments.com
Investor Relations:
Kirin
Smith, President
PCG Advisory, Inc.
646.823.8656
Ksmith@pcgadvisory.com
Exhibit 99.2
Mechanical Technology, Incorporated Announces Closing of Upsized $18 Million Preferred Stock Offering
ALBANY, N.Y., August 23, 2021 – Mechanical Technology, Incorporated (“MTI” or the “Company”), (NASDAQ: MKTY), the parent company of EcoChain, Inc. ("EcoChain"), a cryptocurrency mining business powered by renewable energy, and MTI Instruments, Inc. ("MTI Instruments"), a test and measurement instruments and systems business, today announced the closing of its upsized underwritten public offering of 720,000 shares of its 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, with a $25.00 liquidation preference per share (the “Series A Preferred Stock”), at a price to the public of $25.00 per share for aggregate gross proceeds of $18,000,000. Net proceeds to the Company, after payment of underwriting discounts and fees and estimated offering expenses payable by the Company, were approximately $16.1 million.
The Series A Preferred Stock has been approved for listing on the Nasdaq Stock Market LLC under the symbol “MKTYP.”
The Company also granted the underwriters a 45-day option to purchase up to an additional 108,000 shares of the Series A Preferred Stock (representing 15% of the shares of the Series A Preferred Stock being sold in the offering) to cover over-allotments, if any. The underwriters may exercise this option at any time and from time to time during the 45-day period from the closing of the offering. In the event that the Over-Allotment Option is exercised by the underwriters, in full, that would result in additional aggregate gross proceeds of approximately $2,700,000 less applicable underwriter discounts and other offering fees and expenses.
MTI intends to use the net proceeds of the offering for the acquisition, development and growth of data centers, including cryptocurrency mining processors, other computer processing equipment, data storage, electrical infrastructure, software and real property, and business, product line or asset acquisitions related to MTI Instruments and for working capital and general corporate purposes, which include, but are not limited to, operating expenses.
The Series A Preferred Stock is perpetual and has no maturity date. The Series A Preferred Stock is not redeemable prior to August 23, 2026, except under certain circumstances. On or after August 23, 2026, the Series A Preferred Stock may be redeemed at the Company’s option, in whole or in part, from time to time, at a redemption price of $25.00 per share of Series A Preferred Stock, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the date of such redemption. The Series A Preferred Stock may also be redeemed upon the occurrence of certain delisting or change in control events.
Univest Securities, LLC is acting as the sole book running manager for this offering.
The offering is being conducted pursuant to the Company's Registration Statement on Form S-1 (File No. 333-257300), as amended, including by its Registration Statement on Form S-1MEF filed pursuant to Rule 462(b), previously filed with and subsequently declared effective by the Securities and Exchange Commission (“SEC”). A final prospectus relating to the offering has been filed with the SEC on August 20, 2021 and is available on the SEC’s website at http://www.sec.gov. Electronic copies of the final prospectus relating to this offering may be obtained from Univest Securities, LLC, 375 Park Avenue, 15th Floor, New York, NY 10152, by phone (212) 343-8888 or e-mail info@univest.us.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About MTI
MTI is the parent company of MTI Instruments, Inc. and EcoChain, Inc. Through EcoChain, MTI develops cryptocurrency mining facilities powered by renewable energy that integrate with the blockchain network. Through MTI Instruments, MTI is engaged in the design, manufacture and sale of test and measurement instruments and systems that use a comprehensive array of technologies to solve complex, real-world applications in numerous industries. Those include manufacturing, electronics, semiconductor, solar, commercial and military aviation, automotive and data storage. For more information about MTI, please visit https://www.mechtech.com.
Forward Looking Statements
The statements in this press release, including with respect to the possible offering of additional shares of the Series A Preferred Stock and the anticipated use of proceeds, constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and are subject to certain risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Actual results could differ materially from those expressed or implied by such forward-looking statements as a result of various factors, including, but not limited to: (1) those risk factors set forth in the Company's Registration Statement on Form S-1 (File No. 333-257300), as amended; and (2) other risks and uncertainties that may be detailed from time to time in MTI’s reports filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.
Contact Information:
Lisa
Brennan
lbrennan@mtiinstruments.com
Investor Relations:
Kirin
Smith, President
PCG Advisory, Inc.
646.823.8656
Ksmith@pcgadvisory.com