0001226380-14-000002.txt : 20140109
0001226380-14-000002.hdr.sgml : 20140109
20140109095948
ACCESSION NUMBER: 0001226380-14-000002
CONFORMED SUBMISSION TYPE: SC 13D
PUBLIC DOCUMENT COUNT: 2
FILED AS OF DATE: 20140108
DATE AS OF CHANGE: 20140109
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: China Power Equipment, Inc.
CENTRAL INDEX KEY: 0001418134
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620]
IRS NUMBER: 000000000
STATE OF INCORPORATION: MD
FILING VALUES:
FORM TYPE: SC 13D
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-87598
FILM NUMBER: 14517790
BUSINESS ADDRESS:
STREET 1: 168 KECHUANG RD. , BLOCK B
STREET 2: 6TH FL., #602
CITY: HI-TECH ZONE, XI?AN, SHAANXI
STATE: F4
ZIP: 710065
BUSINESS PHONE: 1-646-623-6999
MAIL ADDRESS:
STREET 1: 168 KECHUANG RD. , BLOCK B
STREET 2: 6TH FL., #602
CITY: HI-TECH ZONE, XI?AN, SHAANXI
STATE: F4
ZIP: 710065
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: FITZGERALD ROBERT E
CENTRAL INDEX KEY: 0001226380
FILING VALUES:
FORM TYPE: SC 13D
MAIL ADDRESS:
STREET 1: 2204 VAQUERO ESTATES BLVD
CITY: WESTLAKE
STATE: TX
ZIP: 76262
SC 13D
1
cpqq13d010814.txt
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
China Power Equipment, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
0001418134
-------------------------------------
(CUSIP Number)
Robert Fitzgerald
101 SE 25th Ave. Mineral Wells, Texas 76067
(940)445-2325
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
January 3, 2014
-------------------------------------
(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 that is the subject
of this Schedule 13D, and is filing this schedule
because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ].
Note. Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits.
See Rule 13d-7 for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 5 Pages)
(1) The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
CUSIP NO. 001-51379 13D PAGE 2 OF 5
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert Fitzgerald ###-##-#####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [X]
(B) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 1,408,013
SHARES -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,408,013
WITH -------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,408,013
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.2%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 811-08387 Page 3 of 5
ORIGINAL REPORT ON SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER
This statement relates to the Common Stock, par value $0.01 per share
(the Shares) of China Power Equipment (the Company). The Company has its
principal executive offices at Yongle Industry Zone, Jingyang Concentration
Area Shaanxi, P.R. China 713702.
ITEM 2. IDENTITY AND BACKGROUND
This statement is filed by Robert Fitzgerald (Reporting Person) to
reflect shares held by himself and Concorde Equity II, LLC, a Delaware
limited liability company owned by the Reporting Person and his minor children.
Reporting Person's principal business address is 101 SE 25th Ave,
Mineral Wells, Texas 76067. Reporting Person's principal
Occupation is investing assets held by or on behalf of his family.
During the past five years, reporting Person has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors)and has not been a party to civil proceedings of a
judicial or administrative body of competent jurisdiction as a result
of which Reporting Person was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws. Reporting Person
is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS
The Shares were purchased from Reporting Persons personnel funds.
ITEM 4. PURPOSE OF THE TRANSACTION
On January 3, 2014, 2013, the Reporting Person submitted a non-binding
term sheet to the Issuer to purchase all of the shares of Issuer not
held by the Reporting Person for $0.50 per share.
Although it is the Reporting Persons current intent to acquire
all of the shares of the Issuer, the Reporting Person will
continuously evaluate its ownership of Common Stock and the Issuer's
business and industry. Depending on market conditions and other
factors that the Reporting Person may deem material to their
investment decision, including the availability of other investment
opportunities, the Reporting Person may from time to time acquire
additional shares of Common Stock in the open market or in
privately negotiated transactions or dispose of all or a portion
of the shares of Common Stock that such Reporting Person now
owns or may hereafter acquire.
Without limitation of the foregoing (and consistent with their investment
purpose), the Reporting Person will continue to consider alternative
courses of action and will in the future take such actions with respect
to their investment in the Issuer as they deem appropriate in light
of the circumstances existing from time to time. Such actions may include
requesting meetings with management, making recommendations to
members of management concerning various business strategies, acquisitions,
policies, seeking to acquire control of the Issuer through a
merger, proxy solicitation, tender offer, significant equity investment,
exchange offer or otherwise, or such other actions as the Reporting Person
may deem appropriate.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Reporting Person may be deemed to beneficially own 1,408,013 Shares
(7.2% of the outstanding Shares), based on 19,602,557 Shares outstanding
as of November 1, 2013 pursuant to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 2013.
(b) Reporting Person may be deemed to have sole voting and dispositive
power for all such Shares.
(c) The following transactions were effective by the Reporting Person
during the 60 days preceding the date of filing of
this Schedule 13D:
Trade Date Buy/Sell Number of Shares Price Per Share
1/3/14 Buy 20000 0.40
1/2/14 Buy 1800 0.35
12/31/13 Buy 20000 0.36
12/20/13 Buy 20000 0.35
11/29/13 Buy 200 0.43
11/27/13 Buy 700 0.42
11/21/13 Buy 14376 0.38
11/21/13 Buy 11000 0.44
11/20/13 Buy 1000 0.42
(d) No person other than Reporting Person (and Concorde under the
control of the Reporting Person) has the right to receive and the power
to direct the receipt of dividends from, or the proceeds from the
sale of, the reported securities.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Not Applicable.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS:
Not Applicable.
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
Dated: January 8, 2014
By: /s/ Robert Fitzgerald
-------------------------------
Robert Fitzgerald
EX-1
2
attachcpqq010714.txt
QAR, LLC
101 S. E. 25th Avenue
Mineral Wells, Texas 76067
940-445-2325
January 3, 2014
Board of Directors
China Power Equipment, Inc.
Yongle Industry Zone
Jingyang Concentration Area
Shaanxi, P.R. China 713702
Dear Board of Directors:
QAR, LLC and its affiliates, (collectively Investors, we, us or our),
are writing to express our interest in acquiring all of the outstanding
common stock of China Power Equipment, Inc. (the Company) not
already owned by us for $0.50 per share in cash, on the terms and subject
to the conditions set forth in the attached non-binding term sheet. This
proposal represents a premium of 25% over the Thursday, January 2,
2014 Nasdaq Market closing price of the Companys stock of $0.39
per share.
We believe that this offer is in the best interest of the
shareholders of the Company as it provides them with a cash payment
which exceeds the most recent closing price and the 30 day moving
average of the Companys common stock by a premium of over 25%.
In our capacity as a shareholder, we have repeatedly suggested that
the Company utilize its excess cash by engaging in a substantial
share buyback program. Since the Company has steadfastly refused
to engage in any type of share buyback, even at prices significantly
below what we are offering, we see this as strong evidence that our
offer is in the best interest of shareholders.
As you know, we believe in the prospects of the Company and we
beneficially own approximately 7% of the Companys outstanding
common stock. We plan to file an amendment to our Schedule 13D
to reflect the delivery of this proposal. We are prepared to move and
close quickly.
This letter does not constitute a legally binding obligation and, of
course, neither we nor the Company shall be subject to any binding
obligation with respect to any transaction unless and until a definitive
agreement satisfactory to all parties, including appropriate due diligence
requirements, is executed and delivered. While we appreciate and
respect the Boards need to conduct an appropriate process in
evaluating our proposal, your prompt consideration to this proposal is
requested. Accordingly, please advise us by 5:00 PM Thursday,
January 9, 2014 (Xi an, China local time and date) as to your
response.
Best regards,
/s/ Robert Fitzgerald
Robert Fitzgerald
President
CONFIDENTIAL
Term Sheet for the Acquisition
Of
China Power Equipment, Inc.
The purpose of this document is to set forth the indicative terms
pursuant to which, subject to certain conditions set forth herein,
the Investors (as defined below) would acquire for cash all of
the outstanding shares of the common stock of China Power Equipment,
Inc. (the Company) not already owned by the Investors (the
Transaction). The terms and conditions set forth herein are
non-binding and are subject to change and this document does not
constitute an offer, however, the Binding Terms section of the
document are binding. The execution of binding definitive agreements
for the contemplated transaction are subject to completion of due
diligence to the Investors' satisfaction and the preparation of
definitive documentation to effect this transaction that is
mutually satisfactory to each party.
Company: China Power Equipment, Inc. (NASDAQ: CPQQ)
Investors: QAR, LLC and affiliated persons and entities (collectively,
the Investors).
Purchase Price:
The consideration for the Transaction will be $0.50 per share in
cash for all validly issued and outstanding shares of the common
stock,$0.01 par value per share (Common Shares) of the Company, except
for those shares already owned by the Investors and except for any
shares with respect to which the holders have perfected appraisal
rights under the Maryland General Corporation Law, as applicable.
The per share consideration will be net to the seller in cash, without
interest and subject to any required withholding of taxes. Each
exercisable option to acquire Common Shares will be canceled in
exchange for a cash payment equal to the amount, if any, by which
the purchase price exceeds the exercise price for such option.
As of the date of this Term Sheet, the Investors beneficially own
1,388,013 Common Shares, representing approximately 7.1% of the Common
Shares outstanding, based on the 19,602,557 Common Shares outstanding
as of November 1, 2013 as reported on the cover of the Companys Form
10-Q for the quarter ended September 30, 2013.
Structure:
Pursuant to an Agreement and Plan of Merger (Merger Agreement) to be
negotiated by the parties, the Transaction will be structured as a
merger of the Company with a to-be-formed entity wholly owned by
the Investors (Acquisition Entity).
A special meeting of the Companys stockholders (the Special Meeting)
to approve the Merger Agreement will be called as soon as practicable
following the execution of the Merger Agreement. The parties shall
undertake the drafting of the Companys proxy statement for the
Special Meeting, which shall be filed by the Company with the
Securities and Exchange Commission no later than ten (10) days from
the execution of the Merger Agreement. It is contemplated that the
closing will take place in the second calendar quarter of 2014.
Conditions:
Conditions to closing of the Transaction will include the
following: (i) approval by the Companys stockholders of the Merger
Agreement, (ii) receipt of any and all required regulatory approvals
and third party consents, (iii) completion of due diligence
investigation with no material adverse changes in the Companys
business, assets, results of operations, properties, condition
(financial or otherwise) or prospects, (iv) no order, ruling, suit
or investigation prohibiting or seeking to prohibit the Transactions,
(v) the accuracy of the Companys representations and warranties,
(vi) the performance of the Companys covenants and other obligations
under the Merger Agreement in all material respects, and (vii) the
Merger Agreement not having been terminated.
Governing Law:
The Merger Agreement and other definitive documentation will be
governed by Maryland law.
Due Diligence:
Prior to signing the Merger Agreement and other definitive
documentation, the Investors will undertake and complete to
their satisfaction operational, financial, tax, intellectual
property, technical, contractual, accounting and legal due
diligence.
No Financing Contingency:
Consummation of the Transaction will not be subject to any
financing conditions.
Customary Reps and Warranties:
The Merger Agreement will contain representations and warranties
Made by the Company customary for a transaction of this nature.
Interim Covenants:
The Merger Agreement will contain covenants and other obligations of
the Company customary for a transaction of this nature.
Termination:
Negotiations pertaining to this proposal may be terminated by the
Investors or the Company at any time without cost or liability.
The Merger Agreement will contain a customary non-solicitation
covenant pertaining to the Company, with a right to consider an
unsolicited superior proposal and allowing its board of directors to
change its recommendation of the Transaction subject to the Company
and its board of directors adhering to specified customary procedures
including a limited fiduciary out for the Companys board of directors
to accept an unsolicited superior proposal upon payment of a
termination fee to Acquisition Entity equal to 5% of the transaction
value plus reimbursement of the Investors transaction expenses.
Binding Terms:
Exclusivity: The Company will not solicit or accept competing
term sheets until 90 days following the date hereof.
Expense Reimbursement:
Each party shall pay its own expenses incurred in relation to the
Transaction (including all legal expenses) regardless of whether the
Transaction is consummated or not.
Counterparts:
This Term Sheet may be executed in two or more identical counterparts,
all of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and
delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains a
portable document format (.pdf) file of an executed signature page,
such signature page shall be considered due execution and shall be
binding upon the signatory thereto with the same force and effect as
if the signature were an original.
This term sheet will be considered void if it is not executed by the
Company prior to the close of business on January 9, 2014 (Xi an,
China local time and date). By executing this term sheet, the
Company represents and warrants that it has obtained the necessary
Board of Directors and/or other approvals to cause this term sheet
to be duly authorized, executed and delivered.
Agreed and accepted this_________
day of January, 2014 by
CHINA POWER EQUIPMENT, INC.
By:
Name:
Title:
Agreed and accepted this 3rd
day of January, 2014 by
QAR, LLC
By: /s/ Robert Fitzgerald
Robert Fitzgerald
President