U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 17,1996
H.E.R.C. PRODUCTS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 1-13012 86-0570800
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2202 West Lone Cactus Drive, Suite #15, Phoenix, Arizona 85027
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(Address of principal executive offices) (Zip code)
N/A
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(Former name or former address, if changed since last report)
Registrant's telephone number, including area code: (602) 492-0336
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Item 2. Acquisition or Disposition of Assets
On December 17, 1996, H.E.R.C. Products Incorporated ("Company")
completed a private placement of 170,000 shares of Class A Preferred Stock to
accredited investors. The Company received aggregate proceeds of $1,700,000 from
this offering. Perrin, Holden & Davenport Capital Corp. ("PHD") acted as the
exclusive placement agent of the offering. PHD was paid commissions of $170,000
(10%) and was issued a warrant entitling it to purchase 85,000 shares of Common
Stock of the Company at a purchase price of $3.00 per share, exercisable until
December 10, 2001.
The Class A Preferred Stock has a stated value of $10.00 per share. The
holders of the Class A Preferred Stock are entitled to receive dividends at the
rate of 10% of the stated value ($1.00 per share) per annum from the date of
issuance through the conversion date ("Conversion Date"), payable solely in
shares of Common Stock of the Company. The holders of Class A Preferred Stock
shall have the right, at such holder's option, at any time or from time to time,
to convert each share of Class A Preferred Stock and the accrued amount of
dividends thereon into a number of shares of Common Stock determined by dividing
the stated value of the Class A Preferred Stock being converted, plus the
accrued dividends thereon through the Conversion Date, by the greater of (i) 75%
of the average closing bid price of the Common Stock for the five consecutive
trading days ending immediately prior to the date notice of conversion is given
to the Company ("Fair Market Value"), or (ii) $.10. The Class A Preferred Stock
will automatically convert at the above rate on December 17, 1999. Generally,
the closing bid price will be as reported by The Nasdaq Stock Market, Inc.,
which is the principal market for the Company's Common Stock. The Company will
not issue any fractional shares of Common Stock pursuant to any conversion, but
instead, will round up or down to the nearest whole number of shares issuable
upon conversion.
The Class A Preferred Stock does not carry any redemption or voting
rights. In the event of a liquidation, dissolution or winding up of the Company,
the holders of the Class A Preferred Stock will participate with the holders of
the Common Stock as if the Class A Preferred Stock was fully converted
immediately prior to the event.
The Company has agreed to register for resale under a registration
statement filed pursuant to the Securities Act of 1933, as amended, and such
state "blue sky" laws as are reasonably requested by the holders of the Class A
Preferred Stock, the shares of Common Stock into which the Class A Preferred
Stock and the related dividends may be converted and the Common Stock underlying
the warrant issued to PHD. The Company has agreed to use its best efforts to
have the registration statement declared effective by February 14, 1997 and has
undertaken to have it declared effective by April 15, 1997. If the registration
statement is not declared effective by April 15, 1997, the conversion rate of
the Class A Preferred Stock will be reduced to 72.5% of the Fair Market Value.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Unaudited Financial Statements of Business Acquired
Not applicable.
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(b) Unaudited Pro Forma Financial Information
Not applicable.
(c) Exhibits
4.1 Form of Subscription Agreement between the Company and
purchasers of the Class A Preferred Stock.*
4.2 Warrant issued by the Company to Perrin, Holden & Davenport Capital
Corp.*
4.3 Agency Agreement between the Company and Perrin, Holden &
Davenport Capital Corp. dated as of November 15, 1996, as amended
on December 5, 1996.*
99.1 Certificate of Designations, Preferences and Other Rights and
Qualification of the Class A Preferred Stock, as amended.*
99.2 Form of Press Release
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* Previously filed.
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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.
Dated: December 24, 1996 H.E.R.C. PRODUCTS INCORPORATED
/s/ S. Steven Carl
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S. Steven Carl, Chairman of the Board
and Chief Executive Officer
/s/ Gary S. Glatter
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Gary S. Glatter, President, Chief Operating
Officer, Chief Financial Officer and Treasurer
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FOR IMMEDIATE RELEASE
December 20, 1996
Phoenix, Arizona -- H.E.R.C. Products Incorporated (Nasdaq: HERC) announced
today that it sold 170,000 shares of Class A Preferred Stock, $.01 par value and
$10.00 stated value, in a private placement under Regulation D of the Securities
Act of 1933, as amended, raising gross proceeds of $1,700,000. Each share of
Class A Preferred Stock accrues dividends at the rate of 10% per annum, payable
solely in shares of Common Stock. The Class A Preferred Stock is convertible
into shares of Common Stock at any time by the holder until December 17, 1999,
on which date the Class A Preferred Stock automatically converts into shares of
Common Stock. The conversion rate is equal to 75% of the average closing bid
price of the Common Stock of the Company for the five consecutive trading days
immediately prior to the date of conversion. The proceeds of the private
placement will be used for working capital purposes. Perrin, Holden & Davenport
Capital Corp. acted as the exclusive placement agent for the offering.
The Class A Preferred Stock offered was not registered under the Securities Act
of 1933 or any applicable state securities laws and may not be offered or sold
in the United States absent registration or an applicable exemption from such
registration requirements. The Company has agreed to register the Common Stock
underlying the Class A Preferred Stock for resale by the investors in the
offering.
H.E.R.C. Products Incorporated develops, manufactures and markets products that
eliminate the control scaling and tuberculation on surfaces that come into
contact with water, and develops, manufactures and markets biorational (natural)
pest management and plat growth products for the agricultural and horticultural
markets through its three operating divisions: H.E.R.C. Consumer Products
Incorporated, CCT Corporation (both wholly owned subsidiaries), and the
Industrial Products Group.
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