SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 7)
Environmental Power Corporation
--------------------------------
(Name of Issuer)
Common Stock, $.01 par value
--------------------------------
(Title of Class of Securities)
29406-L-10-2
--------------------------------
(CUSIP Number)
Steven I. Himelstein, Esq.
Dorsey & Whitney LLP
250 Park Avenue
New York, New York 10077
(212) 415-9200
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 23, 2001
--------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [_]
(Continued on following pages)
(Page 1 of 10 Pages)
Page 2 of 10
SCHEDULE 13D
------------
CUSIP No. 29406-L-2
-------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Joseph E. Cresci
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
N/A
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
N/A
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 3,665,618
---------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 59,730
---------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON WITH 4,665,618
---------------------------------------------------------
10. SHARED DISPOSITIVE POWER
59,730
---------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,725,348
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
N/A
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 27.91%
14. TYPE OF REPORTING PERSON*
IN
Page 3 of 10
SCHEDULE 13D
------------
CUSIP No. 29406-L-2
-------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Joseph E. Cresci, Trustee of the Joseph E. Cresci Revocable Trust
U/T/A dated April 3, 1996
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
N/A
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
N/A
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
----------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 3,665,618
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
----------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON WITH 3,665,618
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
----------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,665,618
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
N/A
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.65%
14. TYPE OF REPORTING PERSON*
00 (Trust)
Page 4 of 10
SCHEDULE 13D
------------
CUSIP No. 29406-L-2
-------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Cresci Family Limited Partnership
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
N/A
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
N/A
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New Hampshire
-----------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------------------------------
REPORTING 9. SOLE DISPOSIVTIVE POWER
PERSON WITH 1,000,000
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
-----------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
N/A
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.91%
14. TYPE OF REPORTING PERSON*
PN
Page 5 of 10
Item 1. Security and Issuer: Common Stock, $.01 par value per share of
-------------------
Environmental Power Corporation, a Delaware corporation (the
"Company"). The address of the Company's principal executive office is
500 Market Street, Suite 1E, Portsmouth, NH 03801.
Item 2. Identity and Background:
-----------------------
(a) The persons (the "Reporting Persons") filing this Statement, as
amended, are Joseph E. Cresci, individually and as Trustee of the
Joseph E. Cresci Revocable Trust U/T/A dated April 3, 1996 (the "JEC
Trust"), and The Cresci Family Limited Partnership (the "Family
Partnership").
(b) Mr. Cresci's business address is Environmental Power Corporation, 500
Market Street, Suite 1E, Portsmouth, NH 03801. The JEC Trust's business
address is 500 Market Street, Suite 15R, Portsmouth, New Hampshire
03801. The Family Partnership's business address is 500 Market Street,
Suite 15R, Portsmouth, New Hampshire 03801.
(c) Mr. Cresci is Chairman, Chief Executive Officer and Director of
Environmental Power Corporation, 500 Market Street, Suite 1E,
Portsmouth, NH 03801. The Company's principal business is
environmentally sound power generation, including waste coal, biomass
and distributed generation. The JEC Trust is a revocable trust created
by Mr. Cresci for the benefit of members of his family. The Family
Partnership is a limited partnership of which Mr. Cresci Trust is
general partner and members of the Cresci family (including Mr. Cresci)
are the limited partners. The business of the Family Partnership is to
engage in investment activities.
(d) Criminal proceedings - none
(e) Civil proceedings - none
(f) Citizenship - Mr. Cresci is a United States citizen. The JEC Trust is
organized under New Hampshire law. The Family Partnership is a New
Hampshire limited partnership.
Item 3. Source and Amount of Funds or Other Consideration: Not applicable.
-------------------------------------------------
The transaction giving rise to the filing of this Amendment did not
involve the purchase of Common Stock by the Reporting Persons.
Item 4. Purpose of Transaction.
----------------------
On July 23, 2001 (the "Closing Date"), the Company acquired
approximately 87.7% of the outstanding common stock of Microgy Cogeneration
Systems Inc. ("Microgy") in exchange for securities of the Company pursuant to a
Share Exchange Agreement (the "Exchange Agreement") dated as of June 20, 2001
among the Company, Microgy and the Principal Microgy Shareholders, as defined
therein.
The Company issued an aggregate of 5,521,549 shares of the Company's
common stock, $.01 par value ("Common Stock") and 197,760.7 shares of the
Company's newly designated Series B Convertible Preferred Stock, $.01 par value
(the "EPC Preferred Stock"), to the Principal Microgy Shareholders in exchange
for 15,919,147 shares of Microgy common stock. Each share of Preferred Stock,
which votes with the Common Stock on an as converted basis, will automatically
be converted into ten shares of Common Stock upon an increase in the authorized
common stock to an amount sufficient to allow conversion of the Preferred Stock.
The exchange ratio (the "Exchange Ratio") used was 0.3468495 shares of Common
Stock and 0.0124228 shares of Preferred Stock for each share of Microgy common
stock. The Exchange Ratio was determined by negotiations among the Company,
Microgy and the primary Principal Microgy Shareholders. The Exchange Ratio is
based on all of the fully diluted equity of Microgy being exchanged for 45% of
the fully diluted equity of the Company, assuming exercise or conversion of all
derivative securities. Pursuant to Section 2.4 of the Agreement, the Exchange
Ratio may be adjusted to reflect certain issuances of equity by the Company to
generate funds to be available for financing Microgy. However, holders of
approximately 94% of the Microgy common stock exchanged have waived their
Page 6 of 10
right to adjustments in the Exchange Ratio. The Principal Microgy Shareholders
included two Microgy shareholders who executed Joinder Agreements, becoming
parties to the Exchange Agreement. At the closing, one of the Principal Microgy
Shareholders also exchanged a warrant to purchase 800,000 shares of Microgy
common stock for a warrant to purchase securities of the Company based on the
Exchange Ratio.
The Exchange Agreement provides that, within 30 days of the Closing
Date, the Board of Directors of the Company will be enlarged from five to eight
members and the three resulting vacancies will be filled by designees of the
Principal Microgy Shareholders (including replacements or substitutes similarly
designated, the "Microgy Designees").
Under the Exchange Agreement, the Company agreed to offer (the
"Subsequent Offer") the remaining shareholders of Microgy (who own an aggregate
of 2,230,126 shares of Microgy Common, warrants to purchase 850,000 shares of
Microgy common stock and options to purchase 290,000 shares of Microgy common
stock) to exchange for EPC securities based on the Exchange Ratio.
In connection with and as a condition to the Exchange Agreement, the
following agreements relating to or bearing upon the securities were executed:
A. A Stockholders' Agreement as of the Closing Date among the Company,
the Principal Microgy Shareholders, Joseph E. Cresci and Donald A. Livingston
(the "Stockholders' Agreement"). Messrs. Cresci and Livingston (the "Majority
Stockholders") are Directors, officers and principal stockholders of the
Company. The Stockholders' Agreement provides among other things, that:
1. The Company will arrange for a meeting of stockholders to
present a proposal to increase the authorized Common Stock from 20
million shares to a greater number at least sufficient to permit
the conversion of the Preferred Stock into Common Stock and the
parties will vote the shares they own or control in favor thereof;
2. The parties will take all lawful action, including voting the
shares they own or control, to cause the proportion of Microgy
Designees to the existing five Directors (including any replacement
or substitute designated by the Majority Stockholders, the
"Incumbent Directors"), to remain approximately 3:5 and for the
election of the Microgy Designees and the Incumbent Directors;
3. Each Party who is a director of the Company, in such capacity
(subject to his fiduciary duties to the Company), unless agreed by
a majority of the then Incumbent Directors, will retain Messrs.
Cresci and Livingston as Chairman and Chief Executive Officer and
President, respectively, and not take any action to alter the
respective powers and functions of such offices;
4. Each Principal Microgy Shareholder agreed that, unless such
Principal Microgy Shareholder has been specifically invited in
writing by a majority of the then Incumbent Directors (or in the
case of (a)(i) below, has obtained the consent of a majority of the
then Incumbent Directors), such Principal Microgy Shareholder will
not in any manner, directly or indirectly, (a) effect or seek,
offer or propose (whether publicly or otherwise) to effect, or
cause or participate in or in any way assist any other person to
effect or seek, offer or propose (whether publicly or otherwise) to
effect or participate in, (i) in the case of George A. Kast and
Benjamin Brant, any acquisition of any securities (or beneficial
ownership thereof) or assets of the Company, or any of its
subsidiaries, except as contemplated in the Exchange Agreement;
(ii) any tender or exchange offer or merger or other business
combination involving the Company or any of its subsidiaries, (iii)
any recapitalization, restructuring, liquidation, dissolution or
other extraordinary transaction with respect to the Company or any
of its subsidiaries or (iv) any "solicitation" of "proxies" (as
such terms are used in the proxy rules of the Securities and
Exchange Commission) or consents to vote any voting securities of
the Company, except as contemplated in the Stockholders' Agreement,
(b) form, join or in any way participate in a "group" (as defined
under the Securities Exchange Act of 1934, as amended), with
respect to the securities of the Company, except as contemplated in
the Stockholders' Agreement, (c) otherwise act, alone or in concert
with others, to seek to control or influence the management, Board
or policies of the Company, (other than acting as a shareholder or
director in the ordinary course), (d) take any action which might
force the
Page 7 of 10
Company to make a public announcement regarding any of the types of
matters set forth in (a) above, (e) advise, assist or encourage any
other persons in connection with the foregoing, or (f) enter into
any discussions or arrangements with any third party with respect
to any of the foregoing.
5. The Stockholders' Agreement terminates on June 30, 2003.
B. A Registration Rights Agreement as of the Closing Date with the
Principal Microgy Shareholders, the Majority Stockholders and those Microgy
security holders who exchange Microgy securities in the Subsequent Offer and
execute counterpart signature pages thereto (collectively, the "Holders") (the
"Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement, the Company agreed to file, by November 30, 2001, a Registration
Statement on behalf of the Holders allowing holders to resell Common Stock and
granted the Holders piggyback registration rights.
Except as described in this Item 4 and elsewhere in this Schedule 13D,
the reporting Persons do not have any plans or proposals (in their capacity as
stockholders of the Company) which relate to or would result in: (a) the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (c) a sale or transfer of a material amount
of assets of the Company or any of its subsidiaries; (d) any change in the
present Board of Directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the Board; (e) any material change in the present capitalization or
dividend policy of the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the Company's charter, by-laws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person; (h) causing a class of
securities exchange or cease to be authorized to be quoted in an interdealer
quotation system of a registered national securities association; (i) a class of
equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Act, as amended; or (j) any
action similar to those enumerated above.
Item 5. Interest in Securities of the Issuer:
------------------------------------
(a) Mr. Cresci may be deemed to own beneficially 4,725,348 shares of
Common Stock as of July 23, 2001, which includes: 3,665,618 shares held by the
JEC Trust, of which Mr. Cresci is the Trustee; 1,000,000 shares held by a
Voting Trust (evidenced by voting trust certificates held by the Family
Partnership, of which Mr. Cresci is the general partner); and 59,730 shares of
Common Stock held by the Joseph J. Cresci and Mildred E. Cresci Trust dated
December 28, 1978 for the benefit of Mr. Cresci and his issue, of which trust
Mr. Cresci is both a trustee and a beneficiary. The 4,725,348 shares
beneficially owned by Mr. Cresci do not include 20,000 shares held by Mr.
Cresci's wife as to which Mr. Cresci disclaims beneficial ownership. The JEC
Trust may be deemed to beneficially own the 3,665,618 shares held by it.
Each of James F. Powers, as Voting Trustee with voting power, and the
Family Partnership, with dispositive power, may be deemed to beneficially own
the 1,000,000 shares of Common Stock held in the Voting Trust.
The shares beneficially owned by Mr. Cresci represent 27.91% of the
class; the shares beneficially owned by the JEC Trust, which shares are included
in Mr. Cresci's ownership figures, represent 21.65% of the class; and the shares
beneficially owned by Mr. Powers (as Voting Trustee) and the Family Partnership
(as holder of voting trust certificates), which shares are included in Mr.
Cresci's ownership figures, represent 5.91% of the class, based on the
11,406,783 shares of Common Stock reported to be outstanding as of May 14, 2001
in the Company's Form 10-Q filed for the period ending March 31, 1998, plus the
5,521,549 shares of Common Stock issued on July 23, 2001 as described in Item 4.
Mr. Cresci is a party to the Stockholders' Agreement described in Item
4. Within the meaning of Rule 13(d)(5) under the Securities Exchange Act of
1934, as amended (the "Act"), the terms of the Stockholders' Agreement could be
deemed to provide for an agreement among the parties thereto to act together for
the purpose of voting and disposing of equity securities of the Company.
Accordingly, the parties thereto could be deemed to be members of a "group" and
could be deemed to be beneficial owners of all of the securities held by such
group. The Reporting Persons deny the existence of such a group and disclaim
beneficial ownership of the securities held by any person other than by the
Reporting Persons.
Page 8 of 10
To best knowledge of the Reporting Persons, the table below identifies
all of the parties to the Stockholders' Agreement in addition to Mr. Cresci and
states their ownership interests in the Company based solely upon public filings
and acquisitions of the Company's securities pursuant to the Exchange Agreement.
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EPC PERCENTAGE OF
PREFERRED COMMON STOCK COMMON STOCK COMMON STOCK
PARTY TO STOCKHOLDER COMMON STOCK STOCK ISSUABLE UPON BENEFICIALLY COMMON STOCK BENEFICIALLY
AGREEMENT OWNED OWNED CONVERSION OWNED/1/ OUTSTANDING/2/ OWNED/3/
-----------------------------------------------------------------------------------------------------------------------------------
Donald A. Livingston 2,461,739 0 0 2,461,739 16,928,332 14.5%
-----------------------------------------------------------------------------------------------------------------------------------
George A. Kast 2,009,318 71,966 719,660 2,728,978 17,647,992 15.5%
-----------------------------------------------------------------------------------------------------------------------------------
Benjamin Brant 1,959,411 70,178.5 701,785 2,661,196 17,630,117 15.1%
-----------------------------------------------------------------------------------------------------------------------------------
Daniel J. Eastman 797,754/4/ 28,572.4/5/ 285,724 1,083,478 17,491,536 6.2%
-----------------------------------------------------------------------------------------------------------------------------------
Steven J. Brunner 390,206 13,975.7 139,757 529,963 17,068,089 3.0%
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John P. O'Shea 96,355 3,451.1 34,511 130,866 16,962,843 0.8%
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Henry S. Krauss 16,059 575.2 5,752 21,811 16,934,084 0.1%
-----------------------------------------------------------------------------------------------------------------------------------
Frances Luskind and 16,059 575.2 5,752 21,811 16,934,084 0.1%
Henry Krauss, as
Trustees of the Trust
U/W/O Jessie Daniels
FBO Frances Luskind
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Smithson Ventures Inc. 32,118 1,150.4 11,504 43,622 16,939,836 0.3%
Money Purchase Pension
Plan DLJSC - Custodian
FBO Deborah Salerno
Trustee
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Amro International, S.A. 64,237 2,300.7 23,007 87,244 16,951,339 0.5%
-----------------------------------------------------------------------------------------------------------------------------------
Frank Kramer 64,237 2,300.7 23,007 87,244 16,951,339 0.5%
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John J. Burke 321,157 11,502.6 115,026 436,183 17,043,358 2.6%
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Hitel Group 32,118 1,150.4 11,504 43,622 16,939,836 0.3%
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/1/ Section 13 of the Exchange Act deems a person to be the beneficial owner of
a security, if that person has the right to acquire beneficial ownership of
such security through the conversion of another security if such other
security was acquired with the purpose or effect of changing or influencing
the control of the issuer, or as a participant in any transaction having
such purpose or effect. Therefore, the holders of EPC Preferred Shares may
be deemed to be the beneficial owners of the underlying Common Stock.
/2/ Pursuant to Section 13 any shares of Common Stock not outstanding which are
issuable upon exercise of warrants or conversion of EPC Preferred Stock
held by a person have been deemed to be outstanding for the purpose of
computing the percentage of outstanding securities of the class owned by
such person but have not been deemed to be outstanding for the purpose of
computing the percentage of the class by any other person.
/3/ Based on the 11,406,783 shares of Common Stock reported to be outstanding
as of May 14, 2001 in the Company's Form 10-Q filed for the period ending
March 31, 2001, plus the 5,521,549 shares of Common Stock issued on July
23, 2001 as described in Item 4, plus the number of Common Stock this
holder will receive upon exercise of warrants or conversion of his EPC
Preferred Stock (as described in Column 4 of the above table).
/4/ This includes 277,480 shares of Common Stock which is issuable upon the
exercise of the Warrant that Mr. Eastman received in connection with the
Exchange Agreement.
/5/ This includes 9,938.24 shares of EPC Preferred Stock which is issuable upon
the exercise of the Warrant Mr. Eastman received in connection with the
Exchange Agreement.
Page 9 of 10
(b) The number of shares of Common Stock as to which each Reporting
Person may be deemed to (i) have sole power to vote or to direct the vote, (ii)
shared power to vote or to direct the vote, (iii) sole power to dispose or
direct the disposition, or (iv) shared power to dispose or direct the
disposition is set forth in the cover pages and such information is incorporated
herein by reference.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
---------------------------------------------------------------------
to Securities of the Issuer:
---------------------------
As of the date hereof, to the best knowledge of the Reporting Person,
there are no contracts, arrangements, understandings or relationships (legal or
otherwise) among any of the persons identified in this statement or between the
Reporting Persons and any other person with respect to any securities of the
Company, except as disclosed in Item 4 above.
Item 7. Material to be Filed as Exhibits:
--------------------------------
1. Agreement of the Reporting Persons relating to the filing of this
Amendment to Schedule 13D.
2. Share Exchange Agreement dated as June 20, 2001, by and among
the Company, Microgy Cogeneration Systems, Inc. and the Principal
Microgy Shareholders referred to therein.
3. Form of Waiver Agreement given by holders of exchanged Microgy
common stock agreeing to waive their right to adjustments in the
Exchange Ratio.
4. Stockholders' Agreement dated as of July 23, 2001 among the
Company, Joseph E. Cresci, Donald A. Livingston and the Principal
Microgy Shareholders referred to therein.
5. Registration Rights Agreement dated as of July 23, 2001 among the
Company, Joseph E. Cresci, Donald A. Livingston and the Principal
Microgy Shareholders referred to therein.
6. Form of the Joinder to Share Exchange Agreement.
Page 10 of 10
SIGNATURE
---------
After reasonable inquiry to and to the best of the knowledge and
belief of the undersigned, the undersigned certifies that the information set
forth in this statement by or about the undersigned is true, complete and
correct.
Date August 2, 2001
/s/ Joseph E. Cresci
------------------------------
Joseph E. Cresci
THE JOSEPH E. CRESCI REVOCABLE TRUST U/T/A
DATED April 3, 1996
By: /s/ Joseph E. Cresci, Trustee
-----------------------------
Joseph E. Cresci, Trustee
THE CRESCI FAMILY LIMITED
PARTNERSHIP
By: /s/ Joseph E. Cresci, G.P.
---------------------------
Joseph E. Cresci
General Partner