Texas REP Unwinding Business, Transferring Customers To Another REP
Alleges "Material Misrepresentations" In Purchase Agreement
Plans To Relaunch Operations In 2019
December 17, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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Zenergy Power & Gas, Inc. ("Zenergy"), the parent of Enertrade Electric, LLC, said in an 8-K filed with the SEC that it would pay Infuse Energy, LLC $60,000 for Infuse to acquire the retail customers of Enertrade, a transaction that Zenergy alleged in the 8-K was prompted by, "various problems and setbacks inherited within the infrastructure of Enertrade," when Zenergy acquired Enertrade earlier this year
Zenergy said in the 8-K that, "On April 3, 2018, Zenergy Power & Gas, Inc. ('ZP&G'), a Texas corporation and a wholly-owned subsidiary of Zenergy Brands, Inc., a Nevada corporation (the 'Company') consummated the purchase of 87.37% of the issued and outstanding equity interests (the 'Purchased Interests') of Enertrade Electric, LLC, a Texas limited liability company ('Enertrade'), from Luccirelli & Gomez, LLC ('L&G') and TCN Holdings, LLC ('TCN' and together with L&G, collectively, the 'Sellers'), pursuant to the terms and conditions of that certain Equity Interest Purchase Agreement and any amendments associated with the same, dated January 20, 2017, by and among ZP&G, Enertrade, the Sellers, and Genaro Gomez Castanares and Donnie Goodwin (the 'Principals')."
Zenergy alleged in the 8-K that, "Soon after the purchase, the Company realized that the Sellers had made at least three material misrepresentations in the respective disclosure schedule. The Company decided to attempt to address and repair these areas within Enertrade, which had been misrepresented by the Sellers. Simultaneously, the Company and the Sellers have entered into settlement negotiations regarding the original purchase agreement, terms, and obligations, which continue to this day. Since the purchase date above, Enertrade has been operationally managed by a team, selected and managed by the Company. Since the acquisition date of April 3, 2018 to September 30, 2018, Enertrade Electric, LLC generated approximately $735,000 in revenue. In spite of the progress that had been made, over the past approximate 30 days, the Company concluded that it was in its best interest to cease its REP operations and plan a re-launch sometime in 2019."
Zenergy said in the 8-K that, "To the same, on December 10, 2018, Enertrade entered into an asset purchase agreement transaction with Infuse Energy, LLC wherein Enertrade would sell and transfer all of its electricity customers to Infuse Energy. Due to some of the various problems and setbacks inherited within the infrastructure of Enertrade, the Company was not able to monetize the assets of Enertrade in a favorable manner; instead, the Company had to pay a one-time sum of $60,000.00 to Infuse Energy, LLC in order to take the assets of Enertrade. The effective date of this transaction is expected to take effect on or around December 13, 2018. Shortly thereafter, the Company will unwind the operation of Enertrade completely, while settling all respective vendor or supplier accounts over the next quarter. The Company has voluntarily released the Enertrade Retail Electric Provider license."
Zenergy said in the 8-K that, "The Company’s plan is for ZP&G to relaunch its commodity sales business on a more effective operating platform, with a new strategic wholesale supplier as its premier vendor sometime in 2019. As a result of all of these events, the Company is also exploring ways to better separate its business units, in order to better accommodate its existing and any anticipated future senior secured lenders. The Company believes that these changes will not have a negative impact on the Company’s primary business unit otherwise known as the Zero Cost Program."