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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Action of 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 16, 2002
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MERA PHARMACEUTICALS, INC.
(FORMERLY AQUASEARCH, INC. )
(Exact name of Registrant as specified in its charter)
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DELAWARE 33-23460-LA 04-368-3628
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization Number) Identification Number)
73-4460 QUEEN KA'AHUMANU HIGHWAY, SUITE 110
KAILUA-KONA, HAWAII 96740
(Address of principal executive offices)
(808) 326-9301
(Registrant's telephone number, including area code)
AQUASEARCH, INC.
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(FORMER NAME OR FORMER ADDRESS IF CHANGED FROM LAST REPORT)
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ITEM 1. CHANGE IN CONTROL
(a) Mera Pharmaceuticals, Inc., a Delaware corporation formerly known
as Aquasearch, Inc. (the "Company"), merged with Aqua RM Co., Inc., a Delaware
corporation (the "Merger") on September 16, 2002. The Company was the surviving
corporation in the Merger.
The Merger occurred pursuant to the Company's Plan of Reorganization
(the "Plan"), which was confirmed by the U.S. Bankruptcy Court for the District
of Hawaii on June 17, 2002. Together with the distribution of shares to holders
of certain warrants to purchase the Company's common stock, as described below,
the Merger was the final step in the Company's reorganization under Chapter 11
of the U.S. Bankruptcy Code.
The other party to the Merger, Aqua RM Co., Inc., was established by
Chardan Ventures, LLC, a co-proponent of the Plan, in February 2002 for the
special purpose of assisting in the Company's reorganization. Aqua RM Co., Inc.
engaged in no significant operations prior to the Merger. The Company will
continue in the same business that it was engaged in prior to the Merger, and
all of the officers and directors of the Company in place at the time of the
Merger continue in those roles.
As provided for in the Plan, the Merger resulted in the shareholders
of Aqua RM Co., Inc. receiving 100 shares of the Company's common stock in
exchange for each share of Aqua RM Co., Inc. stock they held. A total of
263,992,029 shares of the Company's common stock were issued to Aqua RM Co.,
Inc. shareholders in consummation of the Merger. In addition, 2,656,850 shares
of the Company's common stock were issued to holders of validly issued and
outstanding warrants of Aquasearch, Inc. as of October 31, 2001 which remained
unexercised as of the confirmation of the Plan. Total shares of common stock of
Mera Pharmaceuticals, Inc. issued and outstanding following the Merger are
388,798,818.
As a consequence of the Merger, the former shareholders of Aqua RM
Co., Inc. now own, collectively, a majority of the outstanding shares of Mera
Pharmaceuticals, Inc., although no individual or group known to the Company is
able to assert control over the Company. Specifically:
Amount and Source of Consideration. The sole consideration paid by
the former Aqua RM Co., Inc. shareholders for the Mera
Pharmaceuticals, Inc. common stock that they received in the Merger
was their Aqua RM Co., Inc. common stock.
Basis of Control. As a result of the Merger, former shareholders of
Aqua RM Co., Inc. hold 263,992,029 shares of Mera Pharmaceuticals,
Inc. common stock out of 388,798,818 outstanding, or 67.9%. While the
former Aqua RM shareholders now own more than a majority of the
issued and outstanding shares of the Company, no individual
shareholder holds enough shares to assert control over the Company,
and, to the Company's knowledge, there is no group of shareholders
that is acting together in order to assert control over the Company.
Date of Change in Control. The date of the change in control is the
date of the Merger, September 16, 2002.
Transactions Resulting in the Change in Control. The change in
control was solely the result of the Merger.
Percentage Ownership. The former shareholders of Aqua RM Co., Inc.
now own 67.9% of the issued and outstanding common stock of Mera
Pharmaceuticals, Inc. However, to the Company's knowledge there is no
voting or other agreement among any of those shareholders that would
enable a shareholder or group of shareholders to assert control over
the Company.
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Identity of Persons from Whom Control Was Assumed. The Company was
not aware of any shareholder or group of shareholders that was able
to assert control over the Company prior to the Merger. However, Earl
Fusato, Jr. and Gregory F. Kowal, beneficially owned 11.7% and 7.8%,
respectively, of the outstanding and issued common stock of Mera
Pharmaceuticals, Inc. prior to the Merger, and, as a result of the
Merger, their respective beneficial holdings were decreased to 6.8%
and 5.1%, including the shares of Mera Pharmaceuticals, Inc. that
each individual received in the Merger.
(b) Information required by Item 403(c) of Regulation S-K. There is
no information to be disclosed pursuant to this requirement.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The Company, a Delaware corporation formerly known as
Aquasearch, Inc., merged with Aqua RM Co., Inc., a Delaware corporation, on
September 16, 2002. The Company was the surviving corporation in the Merger.
The Merger occurred pursuant to the Plan, which was confirmed by the
U.S. Bankruptcy Court for the District of Hawaii on June 17, 2002. Together with
the distribution of shares to holders of certain warrants to purchase the
Company's common stock, as described in Item 1, above, the Merger was the final
step in the Company's reorganization under Chapter 11 of the U.S. Bankruptcy
Code.
The other party to the Merger, Aqua RM Co., Inc., was established by
Chardan Ventures, LLC, a co-proponent of the Plan, in February 2002 for the
special purpose of assisting in the Company's reorganization. Aqua RM Co., Inc.
engaged in no significant operations prior to the Merger. The Company will
continue in the same business that it was engaged in prior to the Merger, and
all of the officers and directors of the Company in place at the time of the
Merger continue in those roles.
As a consequence of the Merger, the former shareholders of Aqua RM
Co., Inc. now own, collectively, a majority of the outstanding shares of the
Company. As a result, even though the Company was the surviving corporation, for
accounting purposes the transaction is treated as a disposition of the Company's
assets to Aqua RM Co., Inc. Per Statement of Accounting Standards No. 141, the
disposition of assets will be accounted for using the purchase method. More
specifically:
Description of the Assets. Assets disposed of by the Company as a
result of the Merger consisted primarily of Cash, Accounts
Receivable, Inventories, Prepaid Expenses and Plant and Equipment.
The total assets received by Aqua RM Co., Inc. were valued at
approximately $4,700,000. In addition, as a result of the Merger,
Aqua RM Co., Inc. assumed approximately $2,960,000 in liabilities of
Mera Pharmaceuticals, Inc. The amount of the foregoing assets and
liabilities was determined using their book value as carried by the
Company. Of the liabilities, $2,350,000 is in the form of a note. The
Company anticipates that the obligation represented by this note will
be converted into equity prior to the end of calendar 2002.
Consideration. The sole consideration paid by the former Aqua RM Co.,
Inc. shareholders for the Mera Pharmaceuticals, Inc. common stock
that they received in the Merger was their Aqua RM Co., Inc. common
stock. A total of 263,992,029 shares of the Company's common stock
were issued to Aqua RM Co., Inc. shareholders in consummation of the
Merger. The amount of consideration issued was determined in the
course of the reorganization process, which took into account the
interests of the creditors, existing shareholders and warrant holders
and parties supporting the Company's efforts to reorganize to produce
a result that was acceptable to all of them.
Identity of the Party Acquiring the Assets. For accounting purposes,
Aqua RM Co., Inc. is considered the party that acquired the assets of
the Company, even though the Company is the surviving corporation.
Richard D. Propper, M.D., the President, Treasurer and a director of
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Aqua RM Co., Inc., is also the Chief Executive Officer and a director
of the Company. Daniel P. Beharry, the Secretary and a director of
Aqua RM Co., Inc., is also the Interim Chief Operating Officer,
Secretary and a director of the Company. Messrs. Propper and Beharry
will continue in their roles at Mera Pharmaceuticals, Inc. subsequent
to the Merger.
(b) Plant and Equipment were used primarily by the Company in
production and research and development activities. It is intended that the
Plant and Equipment will continue to be used in this capacity.
ITEM 5. OTHER EVENTS
The completion of the Merger represents the final material obligation
of the Company under the Plan. As a result, as of the effective the date of the
Merger the Company has adopted fresh start reporting of its financial
information, which will reflect the discharge of indebtedness that resulted from
the Company's successful reorganization. The press release attached as exhibit
99.1 provides further information on the completion of the Company's
reorganization.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) None required.
(b) The required pro forma financial information will be filed by
amendment as soon as practicable.
(c) Exhibits.
2.1 Certificate of Merger Merging Aqua RM Co., Inc. into
Mera Pharmaceuticals, Inc., dated September 16, 2002.
99.1 Press Release titled "Mera Pharmaceuticals Successfully
Completes Chapter 11 Reorganization" dated September 19,
2002.
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 hereunder duly authorized.
MERA PHARMACEUTICALS, INC.
Dated: September 30, 2002 By: /s/ Richard D. Propper, M.D.
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Richard D. Propper, M.D.
Interim Chief Executive Officer
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
2.1 Certificate of Merger Merging Aqua RM Co., Inc. into Mera
Pharmaceuticals, Inc., dated September 16, 2002.
99.1 Press Release titled "Mera Pharmaceuticals Successfully
Completes Chapter 11 Reorganization" dated September 19,
2002.
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