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): March 21, 2011
ABAKAN INC.
(Exact name of registrant as specified in its charter)
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Nevada (State or other jurisdiction of incorporation) |
000-52784 (Commission File Number) |
98-0507522 (IRS Employer Identification No.) |
2665 S. Bayshore Drive, Suite 450, Miami, Florida 33133
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: (786) 206-5368
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:
□ 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))
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Item 1.01 Entry into a Material Definitive Agreement
On March 21, 2011 Abakan Inc. (the “Company) entered into an accord and satisfaction agreement to conclude the terms and conditions of an amended stock purchase agreement pursuant to which the Company purchased from Kennametal, Inc. (“Kennametal”) five hundred and ninety six thousand eight hundred and thirteen (596,813) shares, being a forty one percent (41%) interest, in Powdermet, Inc. (“Powdermet”) in exchange for an aggregate of one million seven hundred thousand dollars ($1,700,000). Powdermet is the parent company of MesoCoat, Inc. (“MesoCoat”), an Ohio based nanotechnology materials science business, in which the Company holds a direct and indirect sixty one percent (61%) equity interest with the option to acquire up to eighty five percent (85%). Further, the Company has loaned MesoCoat one million six hundred thousand dollars ($1,600,000) to be credited against the option to increase its equity interest.
Powdermet is building new “metal formulations” as well as providing advanced “energy management” solutions over a broad range of commercial applications for the transportation, infrastructure and ballistic management markets. Development efforts are focused on four product families, each with prospective commercial applications, including: Powdermet has four product families with high commercial potential under development including: SComP (a family of syntactic metal composites known for their light weight properties and ability to absorb 500% more impact energy when compared to current best practice impact and ballistic materials like aluminum alloys); MComP (a family of nanocomposite metal and metal matrix composites designed to be a market replacement for beryllium, aluminum and magnesium in structural applications) EnComP (a diverse family of engineered microstructure energy based solutions) and SynFoam (a family of structurally insulating syntactic ceramic composites combining strength, high temperature functionality and low thermal conductivity into one multifunctional material).
The funds used to complete the transaction with Kennametal were realized from the proceeds of a current offering of up to three million two hundred thousand dollars ($3,200,000) in debt and equity of which nearly two million dollars ($2,000,000) has been realized to date.
Andy Sherman serves as the chief executive officer of each of Powdermet and MesoCoat in addition to his duties as a member of the Company’s board of directors.
Item 7.01 Regulation FD Disclosure
The information contained herein includes a press release attached to this current report in Item 9.01 as Exhibit 99 which is incorporated by reference into this Item 7.01 in satisfaction of the public disclosure requirements of Regulation FD. This information is “furnished” and not “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. However, this information may be incorporated by reference in another filing under the Exchange Act or the Securities Act only if, and to the extent that, such subsequent filing specifically references the information incorporated by reference herein.
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Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are filed herewith:
Exhibit No. Description
10 Accord and Satisfaction Agreement dated March 21, 2011 between the Company and Kennametal, Inc.
99 Press Release dated March 25, 2011
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.
Abakan Inc. Date
By: /s/ Robert Miller March 25, 2011
Name: Robert Miller
Title: Chief Executive Officer
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Exhibit 10
ACCORD AND SATISFACTION AGREEMENT
This Accord and Satisfaction Agreement (“Agreement”) is made on March 21, 2011, between Kennametal, Inc., a Pennsylvania corporation with its principal offices at 1600 Technology Way, Latrobe, Pennsylvania, 15650 (“Creditor”) and Abakan Inc., a Nevada corporation with offices located at 2665 S. Bayshore Drive, Suite 450, Miami, Florida 33133 (“Debtor”).
SECTION ONE: ACKNOWLEDGEMENT OF EXISTING OBLIGATION
On June 28, 2010 Debtor entered into a stock purchase agreement (“Stock Purchase”) with Creditor pursuant to which terms and conditions Debtor was to purchase from Creditor five hundred and ninety six thousand eight hundred and thirteen (596,813) shares being a forty one percent (41%) interest in Powdermet, Inc. (“Powdermet”) in exchange for one million five hundred thousand dollars ($1,500,000). The transaction was not consummated and on September 7, 2010 Debtor and Creditor amended the Stock Purchase to require Debtor to pay five hundred thousand dollars ($500,000) to Creditor against the purchase price and the remainder on or before September 30, 2010 in addition to liquidated damages. The transaction was not consummated and on January 19, 2011 Creditor revised the amended Stock Purchase to increase the total purchase price to one million six hundred and fifty thousand dollars ($1,650,000) minus the $500,000 paid with a closing date of no later than February 15, 2011 in addition to liquidated damages of two hundred and fifty thousand dollars ($250,000).
SECTION TWO: AGREEMENT FOR DIFFERENT METHOD OF PAYMENT
Debtor and the Creditor desire and agree to provide for the payment of the above-stated indebtedness in accordance with terms and provisions different from, and in substitution of, the terms and obligations of stock purchase agreement as amended.
SECTION THREE: CONSIDERATION
In consideration of the mutual promises contained in this Agreement, Debtor and Creditor agree as follows:
a. Method of Payment: Debtor agrees to pay to Creditor and Creditor agrees to extend the term for payment to the execution date of this Agreement and to accept from Debtor, in full satisfaction of one million four hundred thousand dollars ($1,400,000), constituting the remainder due on the Stock Purchase, as amended, and the liquidated damages, the sum of one million two hundred thousand dollars ($1,200,000), as full consideration for the debt owed by Debtor to Creditor in connection with the Stock Purchase, as amended, as described in Section One, above.
b. Satisfaction: On execution of this Agreement and delivery of $1,200,000 to Creditor as provided for in Section Three (a), above, all indebtedness of Debtor to Creditor, as described in Section One, above, will be forever cancelled and discharged, and Creditor will immediately transfer and convey the shares of Powdermet to Debtor, as described in Section One, above.
In witness whereof, the parties have executed this Agreement on the date first mentioned above.
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Abakan Inc. |
Kennametal, Inc. |
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/s/ Robert H. Miller |
/s/ Kevin G. Nowe |
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By: Robert H. Miller |
By: Kevin G. Nowe |
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Its: Chief Executive Officer |
Its: Vice-President, Secretary and General Counsel |
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Exhibit 99
Abakan Acquires Interest in Powdermet and its Advanced Material Technologies
March 25, 2011
Abakan Inc.’s (OTCQB: ABKI) management is pleased to announce that it has completed the purchase of a 40.97% interest in Powdermet, Inc. from Kennametal, Inc. in exchange for a final payment of $1,200,000, in addition to a prior payment of $500,000. The final payment was realized from the proceeds of an offering of up to $3,200,000 of which nearly $2,000,000 has been realized to date. The acquisition brings substantial value to Abakan’s existing investment portfolio which includes a direct and indirect 61.04% interest, with the contractual right to acquire up to 85.24%, of MesoCoat, Inc. The Company has also loaned MesoCoat $1,600,000 to be credited against the option to increase its equity interest. MesoCoat is a subsidiary of Powdermet focused on the development of advanced coating solutions for base metals and ceramics.
Powdermet is currently transitioning from an engineered nano-powder R&D lab into a commercial sector company through building new “metal formulations” as well as providing advanced “energy management” solutions over a broad range of commercial applications including the transportation, infrastructure and ballistic management markets. According to Andrew Sherman, President and CEO of Powdermet, “We have been working with government agencies including NASA, the Department of Energy and the Department of Defense for several years developing some very advanced breakthrough material technologies and believe we are now ready to join with Abakan as the financial partner we require to realize the commercialization of our efforts.”
Development efforts at Powdermet are focused on four product families, each with prospective commercial applications, including: SComP (a family of syntactic metal composites known for their light weight properties and ability to absorb 500% more impact energy when compared to current best practice impact and ballistic materials like aluminum alloys); MComP (a family of nanocomposite metal and metal matrix composites designed to be a market replacement for beryllium, aluminum and magnesium in structural applications) EnComP (a diverse family of engineered microstructure energy based solutions) and SynFoam (a family of structurally insulating syntactic ceramic composites combining strength, high temperature functionality and low thermal conductivity into one multifunctional material).
Robert Miller, President and CEO of Abakan stated, “We are very impressed with the progress Powdermet has made in metal formulations and energy management applications since our involvement with MesoCoat and are committed to raising the new capital Powdermet will require to commercialize products that will reflect significant technological advances in their respective fields.”
A number of statements contained in this press release are forward-looking statements. These forward-looking statements involve a number of risks and uncertainties including technological obsolescence, market acceptance of future products, competitive market conditions, and the sufficiency of capital resources. The actual results Abakan may achieve could differ materially from any forward-looking statements due to such risks and uncertainties. Abakan encourages the public to read the information provided here in conjunction with its most recent filings on Form 10-K and Form 10-Q. Abakan’s public filings may be viewed at www.sec.gov.
Abakan Inc.
Robert Miller, Chief Executive Officer
Phone: (786) 206-5368
Email: robert.miller@abakaninc.com