Filing Details

 

CUSIP No.  052666302

(1) Consists of (i) 15,000,000 shares of Common Stock issuable upon conversion of a senior secured convertible note in the aggregate original principal amount of $150,000 issued to Passaic River Capital, LLC, and (ii) 8,867,567 shares of Common Stock held by Passaic River Capital, LLC.

(2) Based on 24,379,948 shares of Common Stock outstanding as of August 5, 2016.

CUSIP No.  052666302

(1) Consists of (i) 15,000,000 shares of Common Stock issuable upon conversion of a senior secured convertible note in the aggregate original principal amount of $150,000 issued to Passaic River Capital, LLC, and (ii) 8,867,567 shares of Common Stock held by Passaic River Capital, LLC. Liore Alroy, as managing member of Passaic River Capital, LLC, has investment and voting power with respect to the Common Stock held by Passaic River Capital, LLC.  Therefore, Liore Alroy may be deemed to beneficially own the shares of Common Stock beneficially owned by Passaic River Capital, LLC.

(2) Based on 24,379,948 shares of Common Stock outstanding as of August 5, 2016.

CUSIP No.  052666302

This statement on Schedule 13D (the "Schedule 13D") relates to the common stock, par value $0.001 per share (the "Common Stock"), of Enerpulse Technologies, Inc., a Nevada corporation (the "Issuer").  The address of the Issuer's principal executive offices is 2451 Alamo Ave. SE, Albuquerque, New Mexico 87106.

Passaic's principal business is a private investment fund, investing in securities of both private and public companies and its business address is 88 Crescent Avenue, Passaic, New Jersey 07055.

Mr. Alroy is the founding member of Passaic and serves as its managing member.  Mr. Alroy's business address is 88 Crescent Avenue, Passaic, New Jersey 07055.

The responses to Items 4, 5 and 6 of this Schedule 13D are incorporated herein by reference.

On July 26, 2016, the Issuer entered into a securities purchase agreement (the "Purchase Agreement") with Passaic River Capital LLC ("Passaic").  Pursuant to the terms of the Purchase Agreement, the Issuer issued and sold to Passaic (i) a senior secured convertible note in the aggregate original principal amount of $150,000 (the "Note"); (ii) 8,867,567 shares (the "Shares") of Common Stock, and (iii) 10 shares of Series A preferred stock, par value $0.01 per share (the "Preferred Stock"). The aggregate purchase price for the Shares was $990 and the aggregate purchase price for the Preferred Stock was $10.  Passaic used working capital to purchase the Note, Shares and Preferred Stock.

Unless earlier converted or redeemed, the Note and the 2016 Notes will mature on July 26, 2019 ("Maturity Date"), subject to the right of Passaic to extend the date under certain circumstances.  The Passaic Note bears interest at a rate of 10% per annum, subject to increase to 18% per annum upon the occurrence and continuance of an event of default.  Interest on the Note is payable in arrears on the Maturity Date in shares of Common Stock or cash, at the Issuer's option.

All amounts due under the Note are convertible at any time, in whole or in part, at the option of Passaic into shares of Common Stock at a fixed, initial conversion price of $0.01 per share (the "Conversion Price"), which is subject to adjustment for stock splits, stock dividends, combinations or similar events.  If and whenever after the closing the Issuer issues or sells, or is deemed to have issued or sold, any shares of Common Stock for a consideration per share (the "New Issuance Price") less than a price equal to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (the foregoing a "Dilutive Issuance"), then, immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price.

Subject to the Issuer fulfilling certain conditions, the Issuer may require the mandatory conversion of all or any principal portion of the Note (accompanied by a cash payment to Passaic of an amount equal to all accrued and unpaid interest and all interest that would have accrued on such principal through the Maturity Date) (i) upon the closing of any financing (registered or private placement) (or series of financings) of Common Stock or Common Stock Equivalents (as defined in the Note) on or before December 31, 2016, with gross proceeds of, in the aggregate, $1,500,000 or more, at pre-money valuation of the Issuer of approximately $3,500,000; or (ii) if the closing price of the Common Stock for any 20 trading days during any 30 consecutive trading day period equals or exceeds $0.03, as adjusted for stock splits, stock dividends, combinations or similar events.

 

CUSIP No.  052666302

Upon any voluntary or involuntary liquidation, dissolution or winding up of the Issuer, after satisfaction of all liabilities and obligations to creditors of the Issuer and before any distribution or payment will be made to holders of any stock that ranks junior to the Preferred Stock, each holder of Preferred Stock will be entitled to receive, out of the assets of the Issuer or proceeds thereof (whether capital or surplus) legally available therefor, an amount per share of Preferred Stock equal to the stated value per share, which is equal to $1 per share, as set forth in the Certificate of Designation of Preferred Stock (the "Certificate of Designation").

In connection with the Purchase Agreement, the Issuer entered into the Registration Rights Agreement with Passaic pursuant to which the Issuer agreed to file a registration statement with the U.S. Securities and Exchange Commission to register 125% of the Shares and the shares of Common Stock issuable upon conversion of the Note.

The obligations of the Issuer under the Note are secured by all of the assets of the Issuer and its subsidiary (the "Collateral") pursuant to the terms of the Security Agreement which confers on Passaic a first-priority security interest in the Collateral, subject to permitted liens which may have priority over such security interest.

The foregoing summaries of the Purchase Agreement, the Note, the Certificate of Designation, the Registration Rights Agreement, and the Security Agreement do not purport to be complete and are qualified in their entirety by reference to the complete text of the Purchase Agreement, the Note, the Certificate of Designation, the Registration Rights Agreement, and the Security Agreement attached hereto as Exhibit 2, Exhibit 3, Exhibit 4, Exhibit 5 and Exhibit 6, respectively.

The responses to Items 3, 5 and 6 of this Schedule 13D are incorporated herein by reference.

So long as the holders of the Preferred Stock beneficially own three percent (3%) or more of the Common Stock (on a fully diluted as converted basis), at each annual meeting of the stockholders of the Issuer, or at each special meeting of stockholders of the Issuer involving the election of directors of the Issuer, and at any other time at which stockholders of the Issuer will have the right to or will vote for or render consent in writing regarding the election of directors of the Issuer, the holders of the Preferred Stock shall have the right to designate one third (1/3) of the total number of directors to be elected and such annual meeting, such special meeting or such other time at which stockholders of the Issuer will have the right to or will vote for or render consent in writing regarding the election of directors of the Issuer.

The Reporting Persons acquired the Notes, Shares and Preferred Stock because they believed them to be an attractive investment.  The Reporting Persons intend to participate in and influence the affairs of the Issuer through the exercise of their voting rights with respect to their Shares and the nomination of directors as described above.  The Reporting Persons will have meetings or conversations with the Issuer and its management, members of the Issuer's Board, other shareholders and other persons, including potential strategic partners and others in the Issuer's industry, to discuss matters related to the Issuer, including transactions the Issuer could consider that may enhance or maximize shareholder value.  From time to time, the Reporting Persons intend to review the performance of their investments and consider or explore a variety of alternatives, including, without limitation: (a) the acquisition of additional securities of the Issuer or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization, or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) a change in the present Board of Directors or management of the Issuer; (e) a material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer's charter, bylaws, or instruments corresponding thereto, or other actions that may impede the acquisition of control of the Issuer by any person; (h) causing a class of securities of the Issuer to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) causing a class of equity securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) any action similar to any of those enumerated above. Any alternatives that the Reporting Persons may pursue will depend upon a variety of factors, including, without limitation, current and anticipated future trading prices for the Common Stock; the financial condition, results of operations, and prospects of the Issuer; general economic, financial market, and industry conditions; and the investment objectives of the Reporting Persons. Except as set forth above, the Reporting Persons have no present plans or proposals with respect to any of the matters set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D.

CUSIP No.  052666302

The responses to Items 3, 4 and 6 of this Schedule 13D are incorporated herein by reference.

Liore Alroy, as managing member of Passaic, has investment and voting power with respect to the Common Stock held by Passaic.  Therefore, Mr. Alroy may be deemed to beneficially own the shares of Common Stock beneficially owned by Passaic.

ITEM 6.

CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

The responses to Items 3, 4 and 5 of this Schedule 13D are incorporated herein by reference.

Except for the arrangements described herein, to the best knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any other person with respect to any securities of the Issuer, including but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

ITEM 7.

MATERIAL TO BE FILED AS EXHIBITS

Exhibit 1 – Joint Filing Agreement dated August 8, 2016, by and between the Reporting Persons.

Exhibit 2 – Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to Enerpulse Technologies, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2016).

Exhibit 3 – Form of Senior Secured Convertible Note in the aggregate original principal amount of $150,000 issued to Passaic (incorporated by reference to Exhibit 4.3 to Enerpulse Technologies, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2016).

Exhibit 4 – Form of Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 10.5 to Enerpulse Technologies, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2016).

Exhibit 5 – Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.5 to Enerpulse Technologies, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2016).

Exhibit 6 – Form of Security Agreement (incorporated by reference to Exhibit 10.6 to Enerpulse Technologies, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2016).

CUSIP No.  052666302

SIGNATURE

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.

 

Date: August 8, 2016
	PASSAIC RIVER CAPITAL, LLC
	By:	/s/ Liore Alroy
		Name: Liore Alroy
		Title: Managing Member
	LIORE ALROY
	/s/ Liore Alroy
	Liore Alroy

ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL VIOLATIONS (See 18 U.S.C. 1001).

CUSIP No.  052666302

 

EXHIBIT 1

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock of Enerpulse Technologies, Inc. and that this Agreement be included as an Exhibit to such joint filing.

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this 8^th day of August, 2016.

 

	PASSAIC RIVER CAPITAL, LLC
	By:	/s/ Liore Alroy
		Name: Liore Alroy
		Title: Managing Member
	LIORE ALROY
	/s/ Liore Alroy
	Liore Alroy

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