SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KA
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): DECEMBER 31, 1996
ENHANCED SERVICES COMPANY, INC.
(Exact name of registrant as specified in charter)
COLORADO 0-24256 84-1075908
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
16000 BARKERS POINT LANE, HOUSTON, TEXAS 77079
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 713-566-5051
Item 5. Other Events.
Effective December 31, 1996, Enhanced Services Company, Inc.
(the "Company") completed the minimum portion of a private offering (the
"Offering") of Units to investors under exemptions from the registration
requirements of Federal and state securities laws. Each Unit consists of 500
shares of the Company's newly created 8.6% Cumulative Convertible Preferred
Stock (the "Preferred Stock") and was offered at $50,000 per Unit. The Offering,
commenced on October 28, 1996, was for a minimum of 15 Units ($750,000 gross
proceeds) and a maximum of 30 Units ($1.5 million gross proceeds) at $50,000 per
Unit ($100 per share of Preferred Stock). The initial closing of 16 Units
resulted in gross proceeds to the Company of $800,000, and net proceeds of
approximately $765,000. The placement of 16 units was completed by the Company
through its officers and directors. The Offering has been extended until
February 28, 1997.
The Preferred Stock pays dividends at the rate of 8.6% per
annum Each share of Preferred Stock sold in this placement is convertible into
22 shares of the Company's common stock, based on a conversion price of $4.55
per share, and is not subject to redemption. Conversions are at the election of
the Company during the two-year period following closing. All shares of
Preferred Stock which have not been previously converted will convert
automatically on the second anniversary of the closing. The conversion rate is
subject to adjustment under certain circumstances.
The Company plans to use the net proceeds from the initial
closing of approximately $765,000 as follows: (a) approximately $150,000 of the
net proceeds is planned to be used for capital expenditures, including the
upgrading of the Company's information technology and network system to prepare
for the planned growth, (b) approximately $85,000 is planned for new equipment
to set up a reduced glare screen film application facility in Irvine,
California, (c) approximately $250,000 is planned to be used for additional
design and product development for the Company's Compatibility Plus(TM) line,
and (d) the balance of the net proceeds, approximately $280,000 is planned to be
used for marketing and working capital.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) (i) Unaudited Financial Statement - December 31, 1996
(Incorporated by reference to Unaudited Financial Statements filed
with form 8-K dated February 7, 1997) (ii) Audited Financial
Statement - November 30, 1996 (Incorporated by reference to
Audited Financial Statements filed with form 8-K dated February 7,
1997)
(c) Exhibit (3)(a)(i) Form of Articles of Amendment to the Articles
of Incorporation the Company as filed with the Colorado Secretary
of State on January 9, 1997.
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 there unto duly authorized.
Dated: February 11, 1997
ENHANCED SERVICES COMPANY, INC.
(Registrant)
By:/S/ KENNETH M. DUCKMAN
Kenneth M. Duckman, President
and Chief Executive Officer
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
3 (a)(i) Articles of Amendment to the Articles of Incorporation of
the Company. (Incorporated by reference to Articles of Amendment
filed as an Exhibit to form 8-K filed February 7, 1997.)