Enova Systems, Inc. (NYSE AMEX:ENA)(AIM:ENV)(AIM:ENVS), a leading developer of proprietary hybrid electric and all-electric drive systems and drive system components for the emerging green commercial vehicle market, announced today that it has signed a purchase agreement on April 24, 2012 for the sale, from time to time, of $3.4 million of its common stock, including an initial investment of $250,000, with Lincoln Park Capital Fund, LLC (LPC), a Chicago-based institutional investor. The securities LPC agreed to purchase under this purchase agreement were offered through a prospectus supplement pursuant to the Company's effective shelf registration statement and base prospectus contained therein.
In addition, Enova previously entered into a separate purchase agreement with LPC that, subject to certain conditions including the effectiveness of a registration statement to be filed with the US Securities and Exchange Commission covering the resale of the shares that may be issued to LPC, commits LPC to purchase up to $6.6 million of Enova’s common stock over a 36-month period. LPC has no right to require any sales by Enova, but is obligated to make purchases as Enova directs in its sole discretion in accordance with the purchase agreement, which may be terminated by Enova at any time, without cost or penalty.
"We are pleased to conclude on these funding agreements with LPC which provide us flexibility to pursue our business goals," said Michael Staran, CEO of Enova. "We plan to use any proceeds from this agreement to fund current operations and implement value added initiatives."
"As Enova looks forward to its future cash needs, we consider these LPC agreements to provide a backstop to enable Enova to continue pursuit of its business strategy," stated John Micek, CFO of Enova.
Under both agreements, there are no upper limits to the price LPC may pay to purchase Enova common stock. Any time that Enova elects to sell shares to LPC, the pricing of that sale will be fixed pursuant to a formula that is based upon the market price of Enova common stock immediately preceding the notice to LPC without any fixed discount. Accordingly, Enova will know on that date of notice the price per share that LPC will be required to pay.