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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
Fix-Corp International, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
33831C-10-9
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(CUSIP Number)
Ronald I. Weiss
100 Erieview Plaza, 27th Floor
Cleveland, OH 44114-1824
(216) 696-3366
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
April 23, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following
box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP No. 33831C-10-9
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1. NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF REPORTING
PERSONS
(1) Mark P. Hershhorn
(2) The Hershhorn Group
I.R.S. Identification No.: N/A
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
(1) PF
(2) WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
(1) United States
(2) Pennsylvania
7. SOLE VOTING POWER 3,035,000
8. SHARED VOTING POWER 0
NUMBER OF SHARES
BENEFICIALLY OWNED 9. SOLE DISPOSITIVE POWER 3,035,000
BY EACH REPORTING
PERSON WITH 10. SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,035,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.83%
14. TYPE OF REPORTING PERSON*
(1) IN
(2) OO
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ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to shares of Common Stock, par value
$.001 per share (the "Common Stock"), of Fix-Corp International, Inc., a
Delaware corporation (the "Company"). The Company's principal executive office
is located at 1835 James Parkway, Heath, Ohio 43056.
ITEM 2. IDENTITY AND BACKGROUND
(a) Mark P. Hershhorn
(b) 2228 E. Deerfield Drive, Upper Providence, PA 19063
(c) Mr. Hershhorn is Chairman of the Board, Chief Executive
Officer, and a Director of the Company. The Company's principal office is
located at 1835 James Parkway, Heath, Ohio 43056. Mr. Hershhorn is also the
president of the management consulting firm of Hershhorn & Trichon, LLC ("H &
T"). The principal offices of H & T is located at 2228 E. Deerfield Drive, Upper
Providence, PA 19063. Mr. Hershhorn also serves as the Chairman and Chief
Executive Officer of CKS & Associates, a management consulting firm. The
principal office of CKS & Associates is also located at 2228 E. Deerfield Drive,
Upper Providence, PA 19063.
(d) Mr. Hershhorn has not been convicted in any criminal
proceeding during the last five years (excluding traffic violations or other
similar misdemeanors).
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(e) During the last five years, Mr. Hershhorn has not been a party
to any civil proceeding of a judicial or administrative body of competent
jurisdiction which, as a result of such proceeding, subjected Mr. Hershhorn to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or found
any violation with respect to such laws.
(f) Mr. Hershhorn is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On Friday, April 23, 1999, the United States Bankruptcy Court for the
Southern District of Ohio (the "Court"), approved Fix-Corp International, Inc.'s
decision to enter into an agreement with the Philadelphia, Pennsylvania-based
management consulting firm of Hershhorn & Trichon, LLC ("H & T"). Pursuant to
the agreement, the Company elected Mark P. Hershhorn as a director, and the
Chief Executive Officer and Chairman of the Board of the Company. Mr. Hershhorn
will replace S. Darwin Noll as a director, who resigned effective as of March
12, 1999. Along with the appointment of Mr. Hershhorn, James L. Trichon was
named Executive Vice President.
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H & T entered into the employment agreement with the Company for a
three year term commencing on March 12, 1999 and ending on March 31, 2002,
renewable for successive one year terms. Under the agreement, H & T will be paid
a base annual wage of $450,000 plus certain benefits and incentive compensation
under a plan to be established by the Board (including an option(1) which was
granted to H & T to purchase 2,000,000 shares of the Company's Common Stock for
a cost of $.56 per share).
Also on April 23, 1999, the Company received Court approval for a
post-petition bridge loan financing arrangement, which the Company's Board of
Directors had previously approved on April 8, 1999. This post-petition,
short-term bridge loan financing facility is being provided by The Hershhorn
Group (which is also Philadelphia-based and owned and controlled by Mr.
Hershhorn) using its own funds. The financing provides for a credit line of
$750,000 to be drawn down by the Company. To date, $330,000 has been drawn down.
The financing documents provide for a promissory note bearing interest at the
so-called "prime rate" charged by National City Bank, NA (Ohio) plus 4%, with
interest payable monthly commencing May 1, 1999, as well as security agreements
and the issuance of a Common Stock Series "A" purchase warrant. The Note matures
on October 9, 1999.
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The Hershhorn Group loan is secured, but is subordinated to the prior
security positions of the Company's two prior secured lenders, Coast Business
Credit, Inc. and Medallion Capital, Inc. In that regard, The Hershhorn Group has
a secured third position on all the Company's U.S. assets and a second position
on its Canadian assets. As additional compensation for providing the bridge
loan, The Hershhorn Group will receive the Common Stock Series "A" purchase
warrant which, when exercised, entitles the holder to purchase 3,000,000 shares
of the Company's fully-paid, non-assessable $.001 par value common stock at an
exercise price of $.62 per share (being 120% of the closing price on the
electronic bulletin board as of the close of business on April 22, 1999). The
expiration of the warrant is December 31, 2005.
All of the 3,000,000 shares of Common Stock beneficially owned by The
Hershhorn Group were acquired by it through the grant of Common Stock Series "A"
purchase warrant, which warrant was granted to The Hershhorn Group pursuant to
an employment agreement entered into between H & T and the Company dated March
12, 1999. The employment agreement and the stock options(1) were approved by the
Bankruptcy Court as part of the bankruptcy proceeding. The options(1) may be
exercised by H & T only if the management-sponsored plan of reorganization is
approved, in which event the options may be exercised at any time during the
five-year period following the date of the agreement, subject to the same terms
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that would apply if the options were granted under the Company's 1997 stock
option plan.
(1) Because stock options are not presently exercisable within 60 days,
Mr. Hershhorn at this time is not the beneficial owner of said option shares
pursuant to Rule 13d-3(d)(1)(i).
ITEM 4. PURPOSE OF TRANSACTION
The purpose of Mr. Hershhorn's acquisition of the Company's Common
Shares, individually and through H & T, was to enable the Company to attract and
retain the services of Mr. Hershhorn, H & T and the other individuals associated
with H & T upon whom the growth and profitability of the Company will depend in
large part, to provide incentive for such individuals to enhance the value of
the Company for the benefit of the stockholders, and to strengthen the mutuality
of interests between participants and the Company's stockholders by providing
equity-based incentive awards. Mr. Hershhorn has assumed control of management
of the Company through the services he will provide as a director, Chief
Executive Officer and Chairman of the Board of the Company. The purpose of the
Warrant grant to The Hershhorn Group was to provide part of the consideration
for the short-term financing being given to the Company by The Hershhorn Group
and to provide a significant equity position to Mr. Hershhorn for his efforts.
Depending on market conditions and applicable legal restrictions
existing at the time, Mr. Hershhorn, either individually, through H & T or
through The
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Hershhorn Group, may from time to time increase his beneficial ownership of
shares of Common Stock through open market transactions (including brokerage
transactions) or by other types of transactions. Mr. Hershhorn, either
individually, through H & T or through The Hershhorn Group, may also from time
to time dispose of shares of Common Stock beneficially owned by him in open
market transactions, in conjunction with a registration statement filed by the
Company or otherwise.
Except as described in this report relating to Mr. Hershhorn and his
associates obtaining operating control of the Company, Mr. Hershhorn, either
individually, through H & T or through The Hershhorn Group, does not have any
present plans or proposals which relate to or would result in any action or
event described in subparagraphs (a) through (j) of Item 4 of Schedule 13D;
however, Mr. Hershhorn reserves the right to change his plans or intentions at
any time and to take all actions he may deem appropriate in the circumstances.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Mr. Hershhorn is presently the beneficial owner of 3,035,000
Common Shares, assuming exercise of the warrant held by The Hershhorn Group,
which is presently exercisable within 60 days of the date hereof. The shares of
Common Stock held by Mr. Hershhorn include: (1) 35,000 shares owned directly by
Mr.
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Hershhorn and (ii) 3,000,000 shares of Common Stock issuable upon exercise of
the warrant held by The Hershhorn Group. Beneficial ownership at present
excludes 2,000,000 shares of Common Stock held by H & T, because such shares are
subject to options not presently exercisable within 60 days hereof. Based on the
number of shares of Common Stock outstanding as of May 1, 1999, the 3,035,000
shares beneficially owned by Mr. Hershhorn represent approximately 8.83% of the
Common Stock of the Company presently issued and outstanding.
(b) Number of shares of Common Stock as to which Mr. Hershhorn
has:
(i) Sole power to vote or direct the vote: 3,035,000
(ii) Shared power to direct the vote: 0
(iii) Sole power to dispose or direct the disposition:
3,035,000
(iv) Shared power to dispose or to direct the disposition: 0
(c) See Item 3.
(d) See Item 6.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
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As of the date hereof, neither Mr. Hershhorn, H & T, nor The Hershhorn Group
is a party to any contract, arrangement, understanding, or relationship among
themselves or with any other person with respect to any securities of the
Issuer, including but not limited to transfer or voting of any of the Common
Shares, finders' fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, the giving or
withholding of proxies, or otherwise subject to a contingency the occurrence of
which would give another person voting or investment power over the Common
Shares.
ITEM 7. MATERIAL FILED AS EXHIBITS
See Exhibits 1-4 of Fix-Corp International, Inc., Form 8-K, filed May 5, 1999,
which are incorporated herein by reference.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Mark P. Hershhorn, for himself and
for The Hershhorn Group
May 7, 1999 By: /S/ Mark P. Hershhorn
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Date Mark P. Hershhorn
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