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) November 30, 1997
AQUAGENIX, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-24490 65-0419263
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) I.R.S. Employer
of incorporation) Identification No.)
6500 Northwest 15th Avenue, Fort Lauderdale, Florida 33309
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (954) 975-7771
------------------------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On November 30, 1997, Aquagenix, Inc. (the "Company") entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") with Thomas Terry, Jr.
("Terry") to acquire all of the issued and outstanding stock of Lewis Tree
Service, Inc. ("Lewis"), a privately-owned business located in Rochester, New
York. The purchase price for the stock will be Twenty-five Million ($25,000,000)
Dollars plus shares of Common Stock of the Company having a Fair Market Value
(as defined in the Stock Purchase Agreement) equal to the Applicable Percentage
(defined below) of Lewis' EBITDA for the twelve (12) months ended October 31,
1998. The Applicable Percentage shall be as follows: (i) if EBITDA is less than
$4,500,000, the Applicable Percentage shall be twenty-five (25%) percent, (ii)
if EBITDA is at least $4,500,000 but less than $5,250,000, the Applicable
Percentage shall be forty (40%) percent, (iii) if EBITDA is at least $5,250,000
but less than $6,000,000, the Applicable Percentage shall be fifty (50%)
percent, and (iv) if EBITDA is at least $6,000,000, the Applicable Percentage
shall be sixty (60%) percent.
Under the terms of the Amended and Restated Escrow Agreement (the "Escrow
Agreement"), the Company has deposited Six Hundred Seventy Thousand ($670,000)
Dollars (the "Escrow Amount") with the Escrow Agent. If the closing of the
acquisition has not occurred by January 31, 1998, and the Company has not
terminated the Stock Purchase Agreement no later than five (5) business days
after the Company receives the audited balance sheet of Lewis as at October 25,
1997 which are materially and adversely different from the unaudited balance
sheet of Lewis as at October 25, 1997, the Company shall either (a) elect to
extend the term of the Stock Purchase Agreement to March 31, 1998 and make an
additional deposit with the Escrow Agent sufficient to increase the Escrow
Amount to Two Million Five Hundred Thousand ($2,500,000) Dollars or (b) the
Escrow Agent shall pay the Escrow Amount to Terry and the Stock Purchase
Agreement will terminate, provided that certain conditions have been met,
including but not limited to, the accuracy in all material respects of all
representations and warranties made by Lewis in the Stock Purchase Agreement, no
prohibition on the sale of the stock by Terry and no material adverse change in
the properties, assets, business, financial condition or prospects of Lewis
since the date of the Stock Purchase Agreement.
The proposed acquisition is subject, among other things, to the Company's
obtaining the required financing for the acquisition and the necessary credit
facilities to finance and/or repay the working capital requirements and the
current debt obligations of Lewis. The closing shall take place on January 31,
1998 unless extended by the Company to March 31, 1998 by complying with the
terms and conditions of the Escrow Agreement.
2
Founded in 1938, Lewis also known as Monroe Tree Service, is one of the oldest
and largest tree trimming vegetation management companies in the United States
with approximately 1,000 employees. It provides vegetation management services
to utilities and government entities in eighteen states throughout the eastern
United States. Based on the audited financial statements for the fiscal year
ended October 25, 1997, Lewis generated total revenues of approximately $50
million. The top ten customers of Lewis accounted for approximately 64% of the
total revenues for 1997.
This business combination of Aquagenix and Lewis should further expand the
Company's operations throughout eastern United States. With the established
customer base of Lewis and its reputation for quality service, combined with the
Company's technology and infrastructure, this acquisition will expand the range
of vegetation management services and enable the combined company to provide
integrated vegetation management solutions to the utility and governmental
customers. Members of the executive management team of Lewis will remain with
the Company to ensure a seamless transition for its customers with the added
benefits of expanded service capabilities and significantly broader insurance
and bonding coverages.
The information herein is qualified in its entirety by reference to the Stock
Purchase Agreement filed as part of this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits
- --------
(a) Stock Purchase Agreement, dated November 30, 1997 between Company and
Thomas Terry, Jr.
3
SIGNATURES
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.
AQUAGENIX, INC.
By: /s/ Helen Chia
-----------------------------------
Helen Chia
Chief Financial Officer
DATED: December 12, 1997
4