Entry into a Material Definitive Agreement, Unregistered Sale of Equity Secu
Item 1.01 Entry into a Material Definitive Agreement On February 23, 2011, American Power Corp. (the "Company" or the "Registrant") entered into a Private Placement Subscription For Non U.S. Subscribers (the "Agreement") with Black Sands Holdings, Inc. ("Black Sands"), in order to subscribe to and purchase units (each a "Unit") valued at $.98 per Unit for an aggregate purchase price ("Purchase Price") of five hundred thousand ($500,000) dollars. Each Unit shall consist of one (1) share of common stock of the Company and one warrant ("Warrant"). Each Warrant shall entitle the holder to purchase one additional share of Common Stock of the Company, at a strike price equal to 150% of the price of the Unit, for a period of three (3) years.
Pursuant to the Agreement, and in exchange for the Purchase Price, Black Sands has agreed to purchase Units consisting of 510,204 shares of common stock of the Company with Warrants to purchase 510,204 additional shares of common stock, at an exercise price of one dollar and forty-seven cents ($1.47) per share for a period of three (3) years. Black Sands will acquire the shares after full payment of the Purchase Price. Black Sands is not an "affiliate" of the Registrant as defined by Rule 144(a)(1) promulgated under the Securities Act of 1933.
An executed copy of the Private Placement Subscription Agreement with Black Sands is attached hereto as Exhibit 10.1.
Item 3.02 Unregistered Sales of Equity Securities Pursuant to the Agreement and in exchange for the Purchase Price, the Registrant shall issue 510,204 shares of common stock to Black Sands Holdings, Inc. at $0.98 per share with Warrants to purchase 510,204 additional shares of common stock at an exercise price of one dollar and forty-seven cents ($1.47) per share for a period of three (3) years. The proceeds from this offering will be used for working capital purposes. We relied on exemptions provided by Section 4(2) of the Securities Act of 1933, as amended and Regulation S. We made this offering based on the following facts: (1) the issuance was an isolated private transaction which did not involve a public offering; (2) there was only one offeree, (3) the offeree has agreed to the imposition of a restrictive legend on the face of the stock certificate representing the shares indicating the stock cannot be resold unless registered or an exemption from registration is available; (4) the offeree was a sophisticated investor familiar with our company and stock-based transactions; (5) there were no subsequent or contemporaneous public offerings of the stock; (6) the stock was not broken down into smaller denominations; and (7) the negotiations for the sale of the stock took place directly between the offeree and our management; (8) the sale was made offshore to a foreign corporation.
Item 9.01 Financial Statements and Exhibits. (d) Exhibits.
Exhibit 10.1 Private Placement Subscription Agreement with Black Sands Holdings, Inc.