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UNITED STATES
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): SEPTEMBER 29, 1999
HAWAIIAN NATURAL WATER COMPANY, INC.
(Exact name of registrant as specified in its charter)
HAWAII 0-29280 99-0314848
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
248 Mokauea Street
Honolulu, Hawaii 96819
(Address of principal executive offices)
(808) 832-4550
(Registrant's telephone number, including area code)
N/A
(Former name or address, if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS.
This filing is being made in response to a decision (NQ 2983C-99)
issued by a Nasdaq Listing Qualifications Panel (the "Panel") with respect to
the continued listing of the Common Stock and Warrants of Hawaiian Natural
Water Company, Inc. (the "Company") on the Nasdaq SmallCap Market.
In May 1999, the Company was notified that its securities would be
delisted from the Nasdaq SmallCap Market for failure to satisfy certain
continued listing requirements, including the minimum net tangible assets
requirement set forth in Nasdaq Marketplace Rule 4310(c)(2). The Company
appealed this decision, which automatically stayed the delisting action
pending the outcome of a hearing before the Panel. This hearing was held on
July 8, 1999; and the Panel issued its decision on August 9, 1999. Pursuant
to this decision, the Company was granted a temporary exception to the
continuing listing requirements, subject to certain conditions. Among the
conditions was the requirement that the Company make a public filing with the
Securities and Exchange Commission and Nasdaq on or before September 30,
1999, evidencing a minimum of $2,750,000 in net tangible assets, based upon a
balance sheet as of August 31, 1999, with pro forma adjustments for
significant subsequent events or transactions. A pro forma balance sheet
complying with this requirement is attached hereto under Item 7. The pro
forma adjustments to the balance sheet arise out of the following
transactions:
On September 29, 1999, the Company completed a private offering of
Common Stock and warrants (the "Offering"), resulting in aggregate proceeds
to the Company of $850,000 ($830,000 net of offering expenses). An investment
of $750,000 was received from an unaffiliated private investor (or assigns);
and an additional $100,000 was received from the Company's Chief Executive
Officer, Marcus Bender. Mr. Bender was also granted an option, exercisable
through January 2000, to invest an additional $100,000 on the same
proportionate terms and conditions.
The Offering involved the issuance of an aggregate of 850,000 shares
of Common Stock at a purchase price of $1.00 per share. The investors were
also granted, for no additional consideration, five year warrants to purchase
an aggregate of (i) 850,000 shares of Common Stock at $1.00 per share, and
(ii) 566,666 shares of Common Stock at $1.50 per share. The warrants are
subject to standard anti-dilution protection, and are redeemable under
certain circumstances.
As a condition to the Offering, the Company obtained from Amro
International, S.A ("Amro") an option to repurchase any or all of the 1,244
outstanding shares of Series A Convertible Preferred Stock ("Series A
Preferred") held by Amro. This option is exercisable for thirty days,
commencing September 21, 1999, subject to extension for up to ten business
days under certain circumstances. Amro has agreed not to
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convert any shares of Series A Preferred during the option period. In
connection with the grant of such option, the Company repurchased 250 shares
of Series A Preferred at par for an aggregate of $250,000. The Company also
agreed to reduce the exercise price of the warrant (to purchase 100,000
shares of Common Stock) previously issued to Amro in connection with its
initial purchase of the Series A Preferred from $1.25 to $.25 per share.
After giving pro forma effect to the foregoing transactions, the
Company's net tangible assets were $2,840,779, as reflected under Total
Stockholders' Equity on the pro forma balance sheet attached hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
PRO FORMA BALANCE SHEET (UNAUDITED)
The following unaudited pro forma balance sheet of Hawaiian Natural Water
Company, Inc. (the "Company") has been derived by the application of pro
forma adjustments to the Company's historical balance sheet at August 31,
1999. The pro forma balance sheet gives effect to the sale of common stock
and warrants in certain private placement transactions and the redemption of
certain shares of the Company's outstanding convertible preferred stock as if
such transactions had occurred as of August 31, 1999. The adjustments are
described in the accompanying notes. Although the unaudited pro forma balance
sheet includes the Company's results of operations through August 31, 1999,
it does not reflect any adjustments that might be made in connection with the
preparation of the Company's normal quarterly financial statements. The
Company's current fiscal quarter ends September 30, 1999. The unaudited pro
forma balance sheet should be read in conjunction with the Company's audited
financial statements and the notes thereto contained in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1999, and the unaudited
financial statements contained in the Company's Quarterly Report on Form
10-QSB for the quarter ended June 30, 1999, which have been previously filed
with the Securities and Exchange Commission.
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HAWAIIAN NATURAL WATER COMPANY, INC.
UNAUDITED PRO-FORMA BALANCE SHEET
August 31, 1999
ASSETS
<TABLE>
<CAPTION>
ACTUAL PRO FORMA ADJUSTMENTS
AT AUGUST 31,1999 DEBIT CREDIT PRO-FORMA
------------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 247,456 $ 830,000 (1) $ 250,000 (2) $ 827,456
Inventories 339,476 339,476
Trade accounts receivable, net of allowance for
doubtful accounts of $24,841 556,147 556,147
Other current assets 155,878 155,878
------------------ ------------ ------------- -------------
Total current assets 1,298,957 830,000 250,000 1,878,957
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization of $563,597 2,353,495 2,353,495
INTANGIBLE ASSET, net of accumulated
amortization of $4,743 179,406 179,406
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Total Assets $ 3,831,858 $ 830,000 $ 250,000 $ 4,411,858
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------------------ ------------ ------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 618,564 618,564
Accrued professional fees 67,389 67,389
Accrued vacation 53,728 53,728
Accrued payroll and related taxes 59,047 59,047
Accrued commissions and billbacks 118,026 118,026
Accrued other 121,342 121,342
Note payable - Current portion 45,767 45,767
Capital lease obligation - Current portion 25,657 25,657
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Total current liabilities 1,109,520 1,109,520
NON-CURRENT LIABILITIES
Capital lease obligation - net of
current portion 21,107 21,107
Notes payable - net of current portion 399,072 399,072
Other 41,380 41,380
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Total Non-Current Liabilities 461,559 461,559
Total liabilities 1,571,079 1,571,079
STOCKHOLDERS' EQUITY
Preferred Stock, $1.00 par value;
5,000,000 shares authorized; 1,244 shares
issued and oustanding actual and 994 pro
forma; aggregate liquidation preference
of $1,244,000 actual and $994,000 pro forma 1,294,897 250,000 (2) 1,044,897
Common Stock, no par value; 20,000,000
shares authorized; 4,354,032
issued and outstanding actual and
5,204,032 pro forma 7,155,171 830,000 (1) 7,985,171
Common stock warrants and options;
3,870,259 issued and outstanding
actual and 5,286,925 pro forma 3,017,146 3,017,146
Accumulated Deficit (9,206,435) (9,206,435)
------------------ ------------ ------------- -------------
Total Stockholders' Equity 2,260,779 250,000 830,000 2,840,779
Total Liabilities and
Stockholders' Equity $ 3,831,858 $ 250,000 $ 830,000 $ 4,411,858
------------------ ------------ ------------- -------------
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</TABLE>
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HAWAIIAN NATURAL WATER COMPANY, INC.
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
The unaudited pro forma financial data has been derived by the application of
pro forma adjustments to the Company's historical balance sheet as of the
date noted.
(1) On September 29, 1999, the Company completed the sale of an aggregate of
850,000 shares of common stock and 5-year warrants to purchase an aggregate
of 1,416,666 shares of the Company's common stock at exercise prices
ranging from $1.00 to $1.50 per share for net proceeds of $830,000 in a
private offering. The Company's president invested $100,000 in the
offering.
(2) On September 21, 1999, the Company entered into an agreement with the
holder of the Company's Series A convertible preferred stock to allow the
Company to redeem 250 shares immediately at par value. On September 23,
1999, the Company paid $250,000 to redeem those shares. The Company was
also granted an option to redeem additional preferred shares at between
75% and 90% of par value for a period of 30 days (subject to extension
under certain circumstances). During the extension period, the redemption
price would be between 95% and 100% of par value. During the option period,
the preferred stock holder has agreed not to convert preferred shares held
into common stock. In consideration for the grant of these redemption
rights, the Company also agreed to change the exercise price per share
from $1.25 to $0.25 per share for a warrant previously granted to the
stockholder.
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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, thereunto duly authorized.
HAWAIIAN NATURAL WATER COMPANY, INC.
(Registrant)
SEPTEMBER 29, 1999 By: /s/ MARCUS BENDER
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Marcus Bender
President & Chief Executive Officer
