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) September 4, 2007
CAPSTONE TURBINE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-15957 95-4180883
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification No.)
21211 Nordhoff Street, Chatsworth, California 91311
(Address of principal executive offices)
(818) 734-5300
(Registrant's telephone number, including area code)
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:
|_| 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)
|_| Precommencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Precommencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 -- Registrant's Business and Operations
Item 1.01 Entry Into a Material Definitive Agreement.
Development and License Agreement
On September 4, 2007, Capstone Turbine Corporation, a Delaware corporation (the
"Company") entered into a Development and License Agreement (the "Agreement")
with UTC Power Corporation ("UTCP") with respect to UTCP's funding and support
of the Company's continued development and commercialization of its 200kW
MicroTurbine(TM) product (the "C200 System").
Pursuant to the terms of the Agreement UTCP will contribute twelve million
dollars ($12,000,000) in cash and approximately eight hundred thousand dollars
($800,000) of in-kind services toward the Company's efforts to develop the C200
System. In return, the Company will pay to UTCP an ongoing royalty of 10% of the
sales price of the C200 System until the aggregate of UTCP's total investment
has been recovered and, thereafter, the royalty will be reduced to 5% of the
sales price.
The Company will receive $1,500,000 upon the signing of the Agreement and is
scheduled to receive the remaining $10,500,000 at the achievement of certain
development milestones as more fully set forth below:
o $2,000,000 at systems requirements review;
o $2,500,000 at preliminary design review;
o $2,500,000 at critical design review;
o $2,000,000 at microturbine build completion; and
o $1,500,000 at completion of qualification.
If the Company fails to complete the development and commercialization of the
C200 System, UTCP will receive a non-exclusive, perpetual, world-wide license to
the C200 System and the Company would receive royalty payments of 3% per unit of
the burdened manufacturing cost for C200 Systems sold by UTCP.
The Company and UTCP are currently parties to an existing OEM agreement that
permits UTCP to package the Company's MicroTurbine(TM) products with chillers
and heat exchange equipment manufactured by UTCP. The new Agreement extends the
existing OEM agreement to ensure that such agreement is in effect during the
period of commercialization of the C200 System and for an additional six months
thereafter.
Sales by the Company to UTCP accounted for approximately 12% of net revenue for
the year ended March 31, 2007.
The foregoing is a summary description of the terms and conditions of the
Agreement and is qualified in the entirety by the text of the Agreement, a copy
of which will be filed with the Securities and Exchange Commission as an exhibit
to the Company's Quarterly Report on Form 10-Q for the Quarter ended on
September 30, 2007.
SIGNATURE
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.
CAPSTONE TURBINE CORPORATION
(Registrant)
Date: September 5, 2007 By: /s/ Walter J. McBride
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Executive Vice President and
Chief Financial Officer