SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
Harrell International, Inc.
(Name of Issuer)
Common Stock, $.01 Par Value
(Title of Class of Securities)
413648-20-8
(CUSIP Number)
Merchant Capital Holdings, Ltd.
Geoffrey Dart
c/o Edwards & Associates
17060 Dallas Parkway, Suite 101
Dallas, Texas 75248
(972) 267-9191
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 14, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP No. 4 13648-20-8 13D Page 2 of 6 Pages
1. Name of Reporting Person; IRS Identification Number
Merchant Capital Holdings, Ltd., a British Virgin Island
corporation
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds (See Instructions)
Other (WC)
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
6. Citizenship or Place of Organization
British Virgin Island
Number of 7 Sole Voting Power
Shares 500,000 shares of Common Stock,$.01 par value
Beneficially 8 Shared Voting Power
Owned by None
Each 9 Sole Dispositive Power
Reporting 500,000 shares of Common Stock,3.01 par value
Person 10 Shared Dispositive Power
With None
11 Aggregate Amount Beneficially Owned by Each Reporting Person
500,000 shares of Common Stock, 3.01 par value
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
13 Percent of Class Represented by Amount in Row (11)
33.9%
14 Type of Reporting Person
Other (CO)
<PAGE>
CUSIP No. 4 13648-20-8 13D Page 3 of 6 Pages
Item 1. Security and Issuer
This statement relates to the common stock, 3.01 par value
(Common Stock),of Harrell International, Inc., a Delaware
corporation ("Harrell"), the principal executive offices of which
are located at 211 A. East Louisiana Street, McKinney, Texas
75069.
Item 2. Identity and Background
This statement is being filed by the below named
corporation:
(a) Merchant Capital Holdings, Ltd. ("Merchant"), a
British Virgin Island corporation.
(b) Merchant's address is Geoffrey Dart, c/o Edwards &
Associates, 17060 Dallas Parkway, Suite 101, Dallas,
Texas 75248.
(c) Not applicable.
(d) Merchant has not been convicted in a criminal
proceeding during the last five years.
(e) Merchant has not been a party to a civil proceeding of
a judicial or administrative body of competent
jurisdiction the result of which proceeding was a
judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding
any violation with respect to such laws during the last
five years.
(f) Merchant was organized pursuant to the laws of the
British Virgin Island.
Geoffrey Dart, a resident of the United Kingdom, is the
managing director and sole officer of Merchant.
Item 3. Source and Amount of Funds or Other Consideration
The 500,000 shares of Common Stock of Harrell described
herein, which include an option to purchase 250,000 shares for
$1.00 per share, were purchased by working capital of Merchant.
Item 4. Purpose of Transaction
The shares of Common Stock were acquired by Merchant for
investment purposes only and Merchant may, depending upon market
and other conditions, make purchases of additional shares of
Common Stock from Harrell, in the open market or in privately
CUSIP No. 4 13648-20-8 13D Page 4 of 6 Pages
negotiated transactions with other third parties. As a result of
this purchase of Common Stock by Merchant , the Board of
Directors of Harrell was increased to four members. Geoffrey Dart
and Gerard Thompson, residents of the United Kingdom, were
<PAGE>
elected
as directors. Mr. Dart is the sole director and officer
of Merchant.
(a) See disclosure in Item 5(a).
(b) Not applicable.
(c) Not applicable.
(d) See disclosure in Item 5(a).
(e) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
Item 5. Interest in Securities of the Issuer
(a) On December 24, 1999, Merchant purchased 250,000
shares of Common Stock from Harrell for $250,000 ($1.00 per
share) and received an option to acquire an additional 250,000
shares for $1.00 per share which expires December 31, 2005. As a
result of the initial purchase of shares, Merchant beneficially
owns 500,000 shares of Common Stock of Harrell, including the
option to purchase 250,000 shares, and which represents
approximately 33.9% of the outstanding shares of Common Stock.
Harrell has a contractual right to purchase an additional
750,000 shares of Common Stock from Harrell for $750,000 at any
time during the period expiring on November 14,2000. If Merchant
purchases the additional 750,000 shares, Merchant will also
receive options to purchase an additional 750,000 shares at
31.00 per share until December 31, 2005, the expiration date of
the options. Merchant and other shareholders of Harrell, who are
directors of Harrell, are subject to a Shareholder Agreement
which provides, among other things, certain restrictions
against the transfer of the options. In certain events, Harrell
and/or the other parties to the Shareholder Agreement shall have
the first right to purchase the options if offered for sale by
Merchant. Specifically, if Merchant does not purchase the
additional 750,000 shares of Common Stock from Harrell, Harrell
shall have the exclusive continuing two-year option (but not
CUSIP No. 4 13648-20-8 13D Page 5 of 6 Pages
the obligation) to repurchase all shares of Common Stock sold
to Merchant by Harrell at a price of $1.00 per share.
Shareholders of Harrell, who are also directors of Harrell, have
agreed to vote in favor of the election of each of the following
persons to the following officer positions of Harrell as long as
such person's position with Harrell shall not be subject to
termination for cause: Geoffrey Dart, Chairman of the Board; Paul
L. Barham, Vice Chairman of the Board and Chief Executive
Officer; and Norman L. Marks, President and Chief Operating
Officer. Merchant and Harrell have further agreed that Merchant
shall have the right to nominate two candidates to the Board of
Directors of Harrell as long as the Board of Directors remains at
four members. In the event that the Board of Directors of Harrell
shall consist of a number of directors other than four, upon
certain events, Merchant shall have the right to nominate such
additional nominees to the Board of Directors as may be necessary
to retain Merchant's 50% membership on the Board of Directors.
(b) Merchant beneficially owns, has the sole power to vote
or direct to vote and the sole power to dispose or direct the
disposition of the 500,000 shares of Common Stock of Harrell as
described in and subject to the disclosure in subpart (a) of this
Item 5.
(c) No transactions involving the Common Stock of Harrell,
other than as described herein, have been effected by Merchant
during the past 60 days.
(d) No other person is known to have the right to receive
or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the 500,000 shares of Common Stock of
Harrell described herein.
(e) Not applicable.
Item 6. Contracts, Arrangements. Understandings or
Relationships with Respect to Securities of the Issuer
See disclosure in Item 5(a).
Item 7. Material to be Filed as Exhibits
Not applicable.
CUSIP No. 4 13648-20-8 13D Page 6 of 6 Pages
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.
Date: January 17, 2000 Merchant Capital Holdings, Ltd.
By: //Geoffrey G. Dart//
