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 11, 2005
HYBRID FUEL SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Georgia 333-33134 58-2267238
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
12409 Telecom Drive, Tampa, Florida 33637
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(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code (813) 979-9222
Copies to:
Darrin M. Ocasio, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
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))
Item 1.01 Entry into a Material Definitive Agreement.
On August 11, 2005 (the "Closing Date"), Hybrid Fuel Systems, Inc. (the
"Company" or "HYFS") completed the closing of a Share Exchange Agreement (the
"Agreement") with DRV Energy, Inc., an Oklahoma corporation ("DRV") and the sole
shareholder of DRV, Sheri Vanhooser (the "DRV Shareholder") that was entered
into on June 29, 2005. Pursuant to the Agreement, the Company acquired all of
the outstanding equity stock of DRV from the DRV Shareholder. As consideration
for the acquisition of DRV, the Company agreed to issue 11,612,903 shares of the
Company's common stock and to pay $400,000 cash to the DRV Shareholder. This
issuance is exempt from registration requirements under Regulation D or
Regulation S under the Securities Act of 1933, as amended.
In addition, the Company has agreed to enter into separate Employment Agreements
with Sheri Vanhooser and Landon Vanhooser within 30 days following the Closing
Date.
BUSINESS OF DRV
THE BUSINESS
DRV Energy, Inc., an Oklahoma corporation ("DRV") was formed November 30,
1994 to engage in the alternative fuels industry through the sales and services
of vehicle conversion system.
DRV is a small volume manufacturer of EPA Certified bi-fuel and dedicated
natural gas and propane turnkey conversion systems. The company also has a full
service alternative fuels center with slow/fast fill stations as well as
compressor installation and maintenance capabilities.
THE MARKETPLACE
Our technology is presently geared to the heavy-duty diesel marketplace or
approximately 8% of the marketplace as defined by the US Department of
Transportation. Through the acquisition of DRV, the Company can now offer
products and services encompassing 100% of the mobile marketplace.
The universe of DRV's conversion systems encompasses all light and medium
gasoline powered cars and trucks and buses. According to the United States
Department of Transportation, Federal Highway Administration (FHA) and the 2000
US Census there are a total of 83,800,000 trucks and buses in the United States.
The FHA further defines this segment to consist of 92% "light trucks"
(74,000,000); 8% "medium trucks and buses" (4,400,000), and; 2% "heavy trucks
and buses" (1,700,000). The vehicle manufacturers' truck classifications defines
light trucks" as those with a weight of 0 - 14,000 lbs; "medium trucks and
buses" as those with a weight of 14,001 - 33,000, and; "heavy trucks and buses"
as those with a weight of 33,001 and higher.
OVERVIEW OF BUSINESS
DRV has operated out of a 5,000 square foot office space, upfit garage and
testing lab in Oklahoma City, Oklahoma. Since 1994, DRV has converted gasoline
vehicles into bi- or dedicated alternative fuel vehicles powered by either
natural gas or propane and installed fill-stations for certain clients. DRV
employs 8 persons and provides limited employee benefits. Since 1994, DRV has
converted vehicles, installed fill stations and provided components parts to
clients in over fifteen states including the US Post Office. DRV is currently
completing the conversion of 71 buses in the Dallas County school system.
DRV's facilities in Oklahoma City include office space, an uplift garage
with three service bays, an emissions testing lab and a large uncovered storage
area for vehicles. Typically, customers will bring their vehicle to DRV's
facilities for installation of the system as well as the fuel storage tanks. In
certain cases, such as the Dallas County School system conversion of 71 buses,
DRV will dispatch technicians to the customer's site and conduct installation
and activation in the field.
INDUSTRY OVERVIEW
DRV provides systems to convert gasoline vehicles to operate with either
natural gas or propane. Once converted, the vehicle is classified as an
Alternative Fuel Vehicle (AFV). An AFV was originally designed to operate on
gasoline but has been altered to run on an alternative fuel such as compressed
natural gas (CNG) or liquefied petroleum gas (LPG or propane). Vehicle
conversions offer AFV options to fleet managers and consumers alike, beyond the
supply of original equipment manufacturer (OEM) alternative fuel vehicles.
According to the Natural Gas Vehicle Coalition (NGVC), as of 2004 there
were 130,000 light- and heavy-duty compressed natural gas (CNG) and liquefied
natural gas (LNG) vehicles in the United States and 2 million worldwide.
Dedicated natural gas vehicles (NGVs) are designed to run only on natural
gas; bi-fuel NGVs have two separate fueling systems that enable the vehicle to
use either natural gas or a conventional fuel (gasoline or diesel). In general,
dedicated NGVs demonstrate better performance and have lower emissions than
bi-fuel vehicles because their engines are optimized to run on natural gas. In
addition, the vehicle does not have to carry two types of fuel, thereby
increasing cargo capacity and reducing weight. Heavy-duty NGVs are also
available as trucks, buses, and shuttles. Approximately one of every five new
transit buses in the United States is powered by natural gas.
Propane, also known as liquefied petroleum gas (LPG), has been used in
vehicles since the 1920s. Today there are more than 200,000 propane vehicles in
the United States and about 9 million worldwide. These include cars, pickup
trucks, and vans; medium- and heavy-duty vehicles such as transit buses,
shuttles, trolleys, delivery trucks, and school buses; and off-road vehicles
such as forklifts and loaders. Propane vehicles can be equipped with dedicated
fueling systems designed to use only propane, or bi-fuel fueling systems that
enable fueling with either propane or gasoline.
DRV PRODUCTS
DRV has EPA certification for the following systems: EPA Certified
GM/Chevy 4.3L V6 Bi-Fuel CNG; 5.3L V8 Bi-Fuel CNG; 6.0L V8 Ded LPG; 6.0L V8
Bi-Fuel LPG; 6.0L V8 Ded CNG; 6.0L V8 Bi-Fuel CNG, and; Ford/Merc 4.6L V8. DRV
also resells CNG and propane fill stations and provides repair and service for
converted on-road and off-road vehicles. In addition, DRV has converted a number
of off-road vehicles such as forklifts and construction equipment.
MARKETING
DRV offers systems to parties interested in lowering their transportation
costs through the use of fuels that are less costly than gasoline or to achieve
a certain reduction in emission pollutants or both. DRV believes their system
differentiates from competitive technologies in respect to price, ease of
installation and fuel displacement.
DRV has historically marketed their systems through a strategy that:
o Positions the DRV system as means to take advantage of lower priced
natural gas or propane verse gasoline as a fuel source.
o sells the DRV system at a price point substantially less than the
cost of alternative dedicated-engine or bi/dual-fuel technologies.
o Position the DRV systems as an economic and efficient improvement
over catalysts and emission traps as a means to reduce harmful
pollutants.
To aid in the marketing of the DRV system, we have adopted a marketing
program including:
o DRV's President and one dedicated sales representative makes direct
contact with prospective customers in the private sector worldwide;
o DRV has organized a network of 16 dealers who are trained in the
installation and activation of a system.
DRV has no intellectual property. DRV acquires their systems from ECO Fuel
Systems Inc. a, private Canadian company that has been creating solutions in the
alternative fuel for vehicle' industry since 1983. ECO specializes in the
technology and equipment required in the efficient conversion of gasoline
vehicles to cleaner alternatives like natural gas and propane. Under an
agreement with ECO, DRV applies for and received US EPA certification for
certain applications and is thereafter the exclusive US representative for each
such system.
COMPETITION
There are relatively few alternative systems for converting medium and
heavy-duty diesel engines to natural gas. The competing systems offered by
competitors described below are more expensive than our technology or are
limited in their application to specific engine lines.
o IMPCO Technologies, Inc. IMPCO, which has headquarters in Cerritos,
California, is one of the largest and oldest designers and
manufacturers of hardware for converting internal combustion engines
to natural gas and propane. As of July, 2002, the company had 510
employees, of which 354 were directly involved in the design,
manufacture and sale of conversion technologies.
IMPCO has developed a system for converting diesel engines to
natural gas which it is marketing, principally in Europe, as " Eclipse".
This system differs from DRV's system in that the internal components of
the engine are extensively modified and conversion systems are available
for relatively few engines. The " Eclipse" system conversion costs for a
typical truck are reported to exceed $50,000.
o Clean Air Power formerly " Clean Air Partners", is a San Diego,
California-based joint venture, operating since 1991, which develops
systems which enable diesel engines to use natural gas in a dual
fuel mode. The company has a " dual fuel" system which shares
several features with our technology. The Clean Air Power systems
are marketed and serviced through the distributorships and service
facilities of Caterpillar, Inc.
Like the IMPCO Eclipse technology, the Clean Air Power system
technology has the advantages of a capable corporate technological
development effort and an extensive marketing and servicing network.
However, these systems require extensive internal engine modifications,
are available only for certain Caterpillar engines series, and are more
expensive than most customers can justify on the basis of immediate fuel
savings. We believe the decision to change the entity name to Clean Air
Power in part reflects a change in emphasis toward stationary engine power
generation systems, where more expensive conversion systems are more
easily justified.
o Westport Innovations Inc. Westport is a publicly traded company
based in Vancouver, British Columbia, which develops natural gas
operating systems for Cummins diesel engines. The company's "
Westport-Cycle." engines are not designed for retrofit markets and
like the IMPCO and Clean Air Power systems, are currently out of the
price range of most prospective customers
o The Innovative Technology Group, Corp. (ITG) located in Fort
Lauderdale Florida offers an open loop conversion system retrofit
for all brands of diesel engines, any size, at any location, without
spark plugs, to fumigation natural gas/diesel dual fuel operation.
Diesel fuel is reduced by as much as 80% to become a pilot ignition
source for low pressure natural gas which enters the engine with
combustion air. Diesel engines can be retrofitted, in the field. If
gas is lost, the engine automatically reverts to full diesel fuel
until gas is restored. ITG does not sell engines but converts
engines sold by others. We are unable to locate any information
relating to the ITG system. However, from a review of ITG's internet
web site, it appears they focus primarily in on the stationary
diesel market.
GOVERNMENT REGULATION
REGULATORY ENVIRONMENT
ENVIRONMENTAL LEGISLATION AFFECTING THE DEMAND FOR NATURAL GAS VEHICLES
Within the United States, we must qualify as an Emission Control Device.
In addition to the fact that gasoline gas is generally more expensive than
natural gas, one of the primary disadvantage of a gasoline engine is that it
emits. These emissions are a significant contributor to air pollution and to
human respiratory difficulties. Also of significance is the fact that fuel
combustion produces Nitrogen Oxides (NOx), a toxin that is harmful to humans and
the environment. NOx is a major known contributor to greenhouse gas formation
resulting in global warming.
Increasingly, federal, state and local environmental legislation is being
enacted which either require, or provide incentives, for the reduction of
vehicle pollutants. For example, the Federal Clean Air Act was amended in 1990
(the "1990 Amendments") to, among other things, set emissions standards for
stationary and mobile pollutant sources and establish targets, standards and
procedures for reducing human and environmental exposure to a range of
pollutants generated by industry in general and transportation in particular.
Among other mandates, the 1990 Amendments require businesses that maintain
centrally fueled fleets of 10 or more vehicles in certain heavy smog locations
to convert, either through new vehicle purchases or by converting existing
vehicles, a portion of their fleet to clean burning alternative fuels. These
laws specifically include the gasoline and natural gas dual fuel system as an
alternative fuel and specify actions that fleet operators must take in order to
comply and timetables for doing so.
Similarly, the Energy Policy Act of 1992 (the "Energy Act") was created to
accelerate the use of alternative fuels in the transportation sector. The Energy
Act mandates the schedule by which Federal, state and municipal vehicle fleets
must incorporate alternative fueled vehicles into their overall vehicle mix.
This has significant ramifications for the military, which operates thousands of
diesel vehicles, and for the state departments of transportation, which operate
tens of thousands of gasoline powered dump trucks and related highway service
and repair vehicles, plus the tens of thousands of vehicles operated by the
private contractors who support these agencies.
In addition to the foregoing, a variety of legislative and related incentive
programs relating to alternative fuel vehicle programs have been created,
including:
o Clean Cities Program. Created by the Department of Energy, the Clean
Cities Program coordinates voluntary efforts between locally based
government and industry to accelerate the use of alternative fuels
and expand the alternative fuel vehicle refueling infrastructure.
Grants are available for natural gas fueling stations and vehicle
conversions to natural gas. Typical grants offset the cost of
conversion by as much as 80%.
o Alternative Fuel Vehicle Credits Program. Congress created this
credits program to encourage fleets to increase the number of
alternative fuel vehicles in their fleets early and aggressively.
Credits are allocated to state fleet operators and cover alternative
fuel provider fleet operators when alternative fuel vehicles are
acquired over and above the amount required, or earlier than
expected. Since credits can be traded and sold, fleets have the
flexibility to acquire alternative fuel vehicles on the most
cost-effective schedule.
o State Energy Program. States will promote the conservation of
energy, reduce the rate of growth of energy consumption, and reduce
dependence on imported oil through the development and
implementation of a comprehensive State Energy Program. The State
Energy Program is the result of the consolidation of two Federal
formula-based grant programs - the State Energy Conservation Program
and the Institutional Conservation Program. The State Energy Program
includes provisions for financial assistance for a number of
state-oriented special project activities. These activities
specifically include programs to accelerate the use of alternative
transportation fuels for government vehicles, fleet vehicles, taxis,
mass transit, and individuals' privately owned vehicles.
EMPLOYEES
As of August 11, 2005 DRV had eight full time employees. DRV has not
experienced any work stoppages and DRV considers relations with its employees to
be good.
DESCRIPTION OF PROPERTY
DRV leases approximately 5,000 square foot area which houses the executive
offices, service bays and emission testing room.
LEGAL PROCEEDINGS
To our knowledge, there is no other pending litigation or other proceeding
against DRV.
RISK FACTORS
IMPROVEMENTS OR CHANGES IN TECHNOLOGY MAY MAKE OUR PRODUCTS OBSOLETE OR
DIFFICULT TO SELL AT A PROFIT OR AT ALL.
To date, the market for alternative fuel technology systems and equipment
has not, to our knowledge, been characterized by rapid changes in technology.
However, there can be no assurance that new products or technologies, presently
unknown to management, will not, at any time in the future and without warning,
render our dual fuel technology less competitive or even obsolete. Major
automobile and truck companies, academic and research institutions, or others,
for example, could develop new fuels or new devices which could be installed at
the original equipment manufacturer level and which could potentially render our
systems obsolete. Moreover, the technology upon which our systems are based
could be susceptible to being analyzed and reconstructed by an existing or
potential competitor.
In addition, competitors may develop technology and systems that can be
sold and installed at a lower per unit cost. There can be no assurance that we
will have the capital resources available to undertake the research which may be
necessary to upgrade our equipment or develop new devices to meet the
efficiencies of changing technologies. Our inability to adapt to technological
change could have a materially adverse effect on our results of operations.
WE ACQUIRE OUR TECHNOLOGY FROM A THIRD PARTY AND SUCH TECHNOLOGY MAY NOT BE
ADEQUATELY PROTECTED FROM UNAUTHORIZED USE BY OTHERS, WHICH COULD INCREASE OUR
LITIGATION COSTS.
Our success depends to a great extent on our ability to protect our
intellectual property. We acquire our core intellectual property pursuant to an
agreement between us and ECO Fuel Systems, Inc.. Our ability to compete
effectively will depend in part on our ability to develop and maintain
proprietary aspects of our technology and either to operate without infringing
the proprietary rights of others or to obtain rights to technology owned by
third parties. We cannot assure you that any of our licensed technology rights
will offer protection against competitors with similar technology. We also
cannot assure you that the technology acquired from ECO will not be challenged,
invalidated or circumvented in the future or that the rights created by our
agreement will provide a competitive advantage. We also rely on trade secrets,
technical know-how and continuing invention to develop and maintain our
competitive position. We cannot assure you that others will not independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to our trade secrets.
WE HAVE LIMITED MANUFACTURING EXPERIENCE AND WILL RELY UPON THIRD PARTY CONTRACT
MANUFACTURERS WHO HAVE NOT YET BEEN CONTRACTUALLY SECURED.
To be successful, we must manufacture, or contract with a third party for
the manufacture of, our current and future products in sufficient quantities and
on a timely basis, while maintaining product quality and acceptable
manufacturing costs. Should we not timely secure a contract manufacturer, or for
some reason we are no longer able to obtain key elements from a supplier, we
will not be able to produce or will be delayed in producing conversion systems
for sale or distribution, which could cause delays in our operation or sales or
make continued operation or sales unprofitable.
SALES OF OUR PRODUCTS ARE DEPENDENT UPON PRICING, AVAILABILITY OR DELIVERY OF
THIRD PARTY COMPONENTS REQUIRED FOR THE USE IN CONJUNCTION OF OUR SYSTEMS.
The conversion of a medium or heavy duty mobile diesel engine requires
three primary components: (i) our Fuel 2(TM) conversion system; (ii) fuel
storage tanks, and; (iii) a specialized catalytic converter (for sales as an
Emission Control Device). While we can control the pricing and delivery of our
systems, we have no control over pricing, availability or delivery of fuel
storage tanks or specialized catalytic converters. The costs of these items can
potentially prevent us from selling our system either because the costs of these
additional components make the conversion of a vehicle uneconomical or the due
to lack of availability of either additional component.
We believe fuel storage tanks are readily available on the open market at prices
that will allow us to commercialize our Fuel 2(TM) system and we believe the
specialized catalytic converters can be likewise acquired on the open market at
prices that will allow us to commercialize our system. However, there can be no
assurance given that our customers will be able to acquire these components at
prices that permit us to sell our system as a fuel savings device because the
upfront costs to acquire and install these components.
THE LIMITED AVAILABILITY OF ALTERNATIVE FUELS CAN HINDER OUR ABILITY TO MARKET
OUR PRODUCTS.
Alternative fuel engines have been commercially available in the past;
however, the most significant impediment to the growth in the market for
alternative fuel vehicles traditionally has been the limited availability of
alternative fuel sources, such as natural gas and propane. The success of
engines based on alternative fuels will probably be directly affected by the
development of the infrastructure of the natural gas industry and the widespread
availability of such fuel sources. To some degree, this problem will remain at
the forefront of, and be an impediment to, the success of alternative fuel power
sources. However, we believe that with the development of the dual fuel
conversion system, vehicles will not be tied exclusively to alternative fuels,
but will have the option and ability to operate on standard diesel fuel alone.
In all events, our business and the market for alternative fuel vehicles would
benefit substantially from the growth of the infrastructure of the natural gas
industry and the more widespread availability of alternative fuels. Conversely,
our business and the market for alternative fuel vehicles would be substantially
hurt by a diminished or lack of growth of the infrastructure of the natural gas
industry and the less widespread availability of alternative fuels.
THE NATURE OF OUR PRODUCTS SUBJECTS US TO PRODUCT LIABILITY RISKS.
Our product and services relate to fuel system components which handle or
come into contact with natural gas which is highly combustible. A malfunction of
or design defect in certain of our products or improper design, construction,
installation or servicing of facility and equipment infrastructure could result
in liability, tort or warranty claims. Although we attempt to reduce the risk of
exposure from such claims through warranty disclaimers and liability limitation
clauses in our sales agreements and by maintaining product liability insurance,
we cannot assure you that these measures will be effective in limiting our
liability for any damages. Any liability for damages resulting from product
malfunctions or services provided could be substantial and could have a material
adverse effect on our business and operating results. In addition, a
well-publicized actual or perceived malfunction or impropriety involving our
products or service could adversely affect the market's perception of our
products in general, regardless of whether any malfunction or impropriety is
attributable to our products or services. This could result in a decline in
demand for our products and services, which would have a material adverse effect
on our business and operating results.
COMPETITION FROM COMPANIES WITH ALREADY ESTABLISHED MARKETING LINKS TO OUR
POTENTIAL CUSTOMERS MAY ADVERSELY AFFECT OUR ABILITY TO MARKET OUR PRODUCTS.
Current and potential competitors have longer operating histories, larger
customer bases, greater brand name recognition and significantly greater
financial, marketing and other resources than we have. Certain of our
competitors may be able to secure product from vendors on more favorable terms,
devote greater resources to marketing and promotional campaigns, and adopt more
aggressive pricing or inventory availability policies, than we will. There can
be no assurance that we will be able to compete successfully against current and
future competitors, and competitive pressures faced by us are likely to have a
materially adverse affect on our business, results of operations, financial
condition and prospects.
MANAGEMENT
Below are the names and certain information regarding the Company's
executive officers, directors and director nominees following the acquisition of
DRV. On August 11, 2005, in connection with the Company's acquisition of DRV,
Sheri Vanhooser resigned from the positions of President. Also, on August 11,
2005, the Board of Directors appointed Sheri Vanhooser as Vice President,
Business Development.
Name Age Position/Office Held
John Stanton 56 Chairman of the Board of Directors
Mark Clancy 49 Chief Executive Officer, Chief Financial Officer
Director
Sheri Vanhooser 40 Vice President of Business Development
John Stanton - Chairman of the Board of Directors . Since December 23, 2003,
John Stanton has served as our Chairman of the Board of Directors . Mr. Stanton
is also the Chief Executive Officer and Chairman of the Board of Directors of
White Knight. From 1987 through the present, Mr. Stanton has served as the
President and Chief Executive Officer of Florida Engineered Construction
Products Corporation. Mr. Stanton has served as Chairman and President of
several public and private companies. Since the early 1990's, Mr. Stanton has
been, and continues to be, involved in turn-around management for financially
distressed companies, providing both management guidance and financing. Mr.
Stanton worked with the international professional services firm that is now
known as Ernst & Young, LLP from 1973 through 1981. Mr. Stanton, a Vietnam
veteran of the United States Army, graduated from the University of South
Florida with a Bachelors Degree in Marketing and Accounting in 1972, and with an
MBA in 1973. Mr. Stanton earned the designation of Certified Public Accountant
in 1974 and was a Sells Award winner in the CPA examination. Mr. Stanton is a
lifetime resident of Tampa, Florida.
Mark Clancy - Chief Executive Officer and Director . Since December 23, 2003,
Mark Clancy has served as our Chief Executive Officer and our Chief Financial
Officer and as a Director . Mr. Clancy is also the President of White Knight
SST, Inc., a publicly-traded company and the Chief Executive Officer of White
Knight Strategies, Inc. Mr. Clancy founded White Knight Strategies during
December 2001 and was acquired by White Knight SST during December 2003 . Since
April 2000, Mr. Clancy has participated in turn-around management for
financially distressed companies. From November 1997 through April 2000, Mr.
Clancy was co-founder, Director and Executive Vice President of publicly-traded
EarthFirst Technologies, Inc.. Mr. Clancy has been an advisor to the Chairman of
the Board of EarthFirst since that company's sale in May 2000. From 1992 through
1997, Mr. Clancy served as the Chief Compliance Officer for a Largo, Florida
based boutique investment banking firm. Mr. Clancy was honorably discharged
after six years of service with the United States Marine Corps. Mr. Clancy was
born in Massachusetts and has resided in Florida since 1982. Mr. Clancy holds a
Bachelors Degree from the University of South Florida and is a lifetime member
of various academic honor societies including Phi Theta Kappa, Phi Alpha Theta
and USF Arts and Sciences Honor Society.
Sheri Vanhooser - Vice President of Business Development. B.S.
Biology/General Physical Science, Oklahoma Christian University, 1981. Ms.
Vanhooser served as President of DRV Energy, Incorporated, an EPA designated
Small Volume Manufacturer of certified conversion systems for bi-fuel and
dedicated LPG and natural gas vehicle fuel systems from 1994 to 2005. Ms.
Vanhooser facilitated the continuous development of leading edge technology and
positioned DRV as a leader in the alternative fuel industry with its
port-sequential fuel injection system for LPG and CNG bi-fuel and dedicated
vehicle applications. Ms. Vanhooser also served as President of SJ Designs from
1990-1994. Ms. Vanhooser has worked with the State Legislature to develop a 50%
tax credit structure for the State of Oklahoma, considered to be the best in the
nation and has been a model for other states. Ms. Vanhooser has worked closely
with the Department of Energy through Clean Cities Programs and has given
numerous presentations and seminars across the nation. Ms. Vanhooser has served
on the State of Oklahoma Dept. of Alternative Fuels Board, Original Stakeholder
for the Dept. of Energy OKC Clean City Program, Tulsa Clean Cities Board, Clean
Fuel Vehicle Market Development Committee and the Natural Gas Vehicle Coalition
Technology Committee. Ms. Vanhooser has also served on several EPA Committees
involving Mobile Source Emissions. Ms. Vanhooser was born Texas and has resided
in Oklahoma with her children for over forty years.
EXECUTIVE OFFICERS AND DIRECTORS
Officers are elected annually by the Board of Directors (subject to the
terms of any employment agreement), at our annual meeting, to hold such office
until an officer's successor has been duly appointed and qualified, unless an
officer sooner dies, resigns or is removed by the Board. Some of the Company's
directors, director nominees and executive officers also serve in various
capacities with the Company's subsidiaries. There are no family relationships
among any of the Company's directors, director nominees and executive officers.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The cash portion of the acquisition was provided by our Chairman and our Chief
Executive Officer as a continuation of their financing.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of August 11, 2005
with respect to the beneficial ownership of the outstanding common stock by (i)
any holder of more than five (5%) percent; (ii) each of the named executive
officers, directors and director nominees; and (iii) our directors, director
nominees and named executive officers as a group. Except as otherwise indicated,
each of the stockholders listed below has sole voting and investment power over
the shares beneficially owned.
Beneficial Owner (1) Number of Shares Percent of Shares
John Stanton 19,471,948 20%
Mark Clancy 11,101,035 11%
Sheri Vanhooser 11,612,903 12%
All Directors and Executive 42,185,886 44%
Officers as group (3 persons)
White Knight SST, Inc. (2) 20,000,000 21%
(1) Applicable percentage ownership as of May 2, 2005 is based upon 94,854,133
shares of common stock outstanding. Beneficial ownership is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended.
Under Rule 13d-3, shares issuable within 60 days upon exercise of outstanding
options, warrants, rights or conversion privileges ("Purchase Rights") are
deemed outstanding for the purpose of calculating the number and percentage
owned by the holder of such Purchase Rights, but not deemed outstanding for the
purpose of calculating the percentage owned by any other person. "Beneficial
ownership" under Rule 13d-3 includes all shares over which a person has sole or
shared dispositive or voting power.
(2) White Knight SST, Inc. is a publicly-traded company of which Mr. Stanton
owns approximately 92% and Mr. Clancy owns approximately 3%.
Item 2.01 Completion of Acquisition or Disposition of Assets.
See Item 1.01.
Item 3.02 Unregistered Sales of Equity Securities.
See Item 1.01.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Pursuant to the Share Exchange Agreement, Sheri Vanhooser was appointed
as the Vice President of Business Development of the Company.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business acquired.
To be filed not later than 71 days after August 12, 2005.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits
Exhibit
Number Description
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2.1 Share Exchange Agreement by and between Hybrid Fuel Systems, Inc.
and DRV Energy, Inc. dated June 29, 2005.
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.
HYBRID FUEL SYSTEMS, INC.
Date: August 12, 2005 /s/ Mark Clancy
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Mark Clancy
Chief Executive Officer