UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Liuski International, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
538029 10 9
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(CUSIP NUMBER)
Duke Liao
Chief Executive Officer
6585 Crescent Drive
Norcross, Georgia 30071
(770) 447-9454
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 4, 1997 and January 21, 1998
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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 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 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.
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SCHEDULE 13D/A
CUSIP NO. 538029 10 9
1. Name of Reporting Person;
S.S. or I.R.S. Identification No. of Above Person
Chih-Hung Liao ("Duke Liao")
I.D. No.:
2. Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
3. SEC Use Only ................................................
4. Source of Funds: PF
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) .........................[ ]
6. Citizenship or Place of Organization: Taiwan
Number of 7. Sole Voting Power: 8,929,053 shares of
Shares common stock
Beneficially 8. Shared Voting Power: 0
Owned By 9. Sole Dispositive Power: 8,929,053 shares
Each Reporting of common stock
Person With 10. Shared Dispositive Power: 0
11. Aggregate Amount Beneficially Owned by Each Reporting
Person: 8,929,053 Shares
12. Check if the Aggregate Amount in Row 11 Excludes
Certain Shares (See Instructions) .......................[ ]
13. Percent of Class Represented by Amount In Row 11:
77.5%
14. Type of Reporting Person: IN
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The Statement on Schedule 13D, dated July 3, 1997 (the "Original
Statement"), filed by Mr. Chih-Hung Liao (also known as Duke Liao, "Liao"),
relating to his beneficial ownership of the common stock, $.01 par value
("Common Stock"), of Liuski International, Inc. (the "Issuer"), is amended and
supplemented by this Amendment No. 1 as set forth below. Defined terms that are
not defined herein have the meanings assigned to those terms in the Original
Statement.
Item 2. Identity and Background
(c) Liao, the Chairman and Chief Executive Officer of the Issuer, has
also become its President.
Item 3. Source and Amount of Funds
The cash portion of the price paid by Liao to Liu for the Purchase has
been reduced by $500,000, to $1,997,068.
In order to provide working capital for the Issuer, Liao, after June
27, 1997, made loans to the Issuer of $9,219,928.01 (the "Loans") on which
interest of $158,454.97 (the "Interest") had accrued through October 15, 1997 at
the bank prime loan rate, which was 8.5% at September 30, 1997. By agreement
dated October 15, 1997, Liao and the Issuer agreed to convert the Loans and
Interest into equity of the Issuer.
Item 4. Purpose of Transaction
The Issuer has stated that it believes that the improvement in the
Issuer's balance sheet which will result from the conversion of the Loans and
Interest into equity may result in improving the Issuer's relationship with its
bank and its vendors.
On November 4, 1997, Loans of $2,223,421.16 and the $158,454.97 in
Interest (aggregating $2,381,876.13) were converted into 1,814,762 restricted
shares of Common Stock at $1.3125 per share, the last sale price of the Common
Stock on the Nasdaq National Market on October 15, 1997 (the "Market Price"). As
a result, Liao became the beneficial owner of 3,598,382 shares of Common Stock,
or approximately 58%, of the 6,195,287 shares then outstanding. Because
sufficient shares of Common Stock were not available under the Issuer's
Certificate of Incorporation to allow for the conversion into Common Stock of
the total outstanding Loans and Interest, additional Loans were not converted at
such time.
On November 7, 1997, the remaining $6,996,506.85 of the Loans were
converted into 100 shares of a non-voting, non- dividend-bearing series of the
Issuer's preferred stock (the "Preferred Stock") which, pursuant to their terms
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as set forth in the Issuer's Certificate of Designations filed with the Delaware
Secretary of State, were to convert automatically at the Market Price into
5,330,671 restricted shares of Common Stock immediately after the Issuer's
Certificate of Incorporation is amended to increase the authorized number of
shares of Common Stock from 7,000,000 to 20,000,000 (the "Share Increase"). The
Share Increase was effected on January 12, 1998 and the outstanding shares of
Preferred Stock were converted into 5,330,671 shares of Common Stock on January
21, 1998. As a result, Liao owns 8,929,053 shares of Common Stock, or
approximately 77.5% of the outstanding Common Stock.
Except as set forth above in this Item 4, Liao does not have any
present plans or proposals which would relate to or result in any of the events
or actions described in subparagraphs (a) through (j) of this Item 4. Nothing
set forth above should be interpreted to preclude Liao from making any plans or
proposals which would relate to or result in any of the events or actions
described in subparagraphs (a) through (j) of this Item 4.
Item 5. Interest in Securities of the Issuer
The cash portion of the price paid by Liao to Liu for the Purchase has
been reduced by $500,000, to $1,997,068.
Liao beneficially owns 8,929,053 shares of Common Stock, or
approximately 77.5% of the 11,525,958 shares outstanding. Liao has the sole
power to vote and dispose of the shares of Common Stock owned by him.
Other than the transaction described above, Liao has not effected any
transaction involving the Issuer's securities within the preceding 60 days.
Item 6. Contracts, Arrangements, Understandings or
Relationships, with Respect to Securities of the Issuer
None.
Item 7. Material to be filed as Exhibits
Exhibit Exhibit
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Numbers
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10 Agreement, dated October 15, 1997, between
Duke Liao and the Issuer.
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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.
February 4, 1998
/s/ Duke Liao
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Duke Liao
EXHIBIT 10
LIUSKI INTERNATIONAL, INC.
6585 Crescent Drive
Norcross, Georgia 30071
October 15, 1997
Mr. Duke Liao
c/o Liuski International, Inc.
6585 Crescent Drive
Norcross, Georgia 30071
Re: Recapitalization
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Dear Mr. Liao:
This letter ("Agreement"), dated as of the date set forth above, sets
forth the agreement between Liuski International, Inc., a Delaware corporation
(the "Company"), and Duke Liao ("Liao") relating to the conversion (the
"Conversion") of Liao's advances to the Company of $9,219,928.01 (the "Loans")
and the $158,454.97 interest accrued thereon through the date hereof (the
"Interest") into shares of the Company's common stock, $.01 par value per share
(the "Common Stock"), and Preferred Stock, $.01 par value per share (the
"Preferred Stock").
Liao represents that he owns 1,783,620 shares of Common Stock, which is
approximately 41% of the 4,380,525 shares outstanding. With the approval of the
Company's Board of Directors, he acquired such shares on June 27, 1997 from the
former principal stockholder and founder, Mr. Morries Liu. The Company
acknowledges that it is indebted to Liao in the amount of the Loans and
Interest.
As soon as practicable upon execution of this Agreement, the Company
will mail a notice to all stockholders of the Company (the "Stockholder Notice")
in accordance with Rule 4460(i)(2) of the Nasdaq Stock Market ("Nasdaq"),
stating, among other things, that, in reliance upon an exception granted by
Nasdaq to the Company, stockholder approval of the Conversion will not be
obtained and that the Company's Audit Committee of the Board of Directors has
approved the exception. The Stockholder Notice will be approved by Nasdaq before
it is mailed to stockholders.
On the eleventh day following the mailing of the Stockholder Notice to
all stockholders, the Interest and $2,223,421.16 of the Loans (together
aggregating $2,381,876.13) will be converted into 1,814,762 shares of restricted
Common Stock at the conversion price of $1.3125 per share (which is the last
sale price of the Common Stock on the Nasdaq National Market on the date hereof)
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and the Company will cause such 1,814,762 shares to be issued to Liao (the
"Initial Issuance") on such eleventh day or as soon thereafter as possible.
Also on such eleventh day, or as soon thereafter as practicable, the
Company will cause to be filed a "Certificate of Designations of Series A
Convertible Preferred Stock" with the Secretary of State of the State of
Delaware, creating and fixing the terms of a first series of Preferred Stock
(the "Series A Preferred") of which there will be 100 shares authorized.
Thereupon, the Company will issue to Liao 100 restricted shares of Series A
Preferred which will later be converted into shares of Common Stock as described
below. The Series A Preferred will not have any voting or special dividend
rights but, in the event of a liquidation or winding up of the Company, will be
entitled to receive an aggregate of $6,996,506.85 (which is the amount of the
Loans and Interest minus $2,381,876.13) before any distribution is made to the
holders of Common Stock. Neither the Company nor Liao will take any action which
would prevent the conversion of the Series A Preferred into shares of Common
Stock. However, if the Series A Preferred is not converted into Common Stock by
March 31, 1998, the holder of the Series A Preferred will have the option to
cause the Company to redeem the Series A Preferred for $6,996,506.85 plus annual
interest thereon of 8.5% accruing from the date after the date hereof.
Promptly after the Initial Issuance, Liao, who will then own
approximately 58% of the outstanding Common Stock, will deliver to the Company a
written consent of the majority stockholder directing the Company to amend its
Certificate of Incorporation to increase the number of shares of authorized
Common Stock from 7,000,000 to 20,000,000 (the "Charter Amendment") and this
consent shall be irrevocable. Upon Liao's delivery to the Company of such
written consent, the Company will promptly file with the Securities and Exchange
Commission (the "SEC") a preliminary Information Statement describing the
proposed Charter Amendment and will use best efforts to promptly file a
definitive Information Statement with the SEC and mail the definitive
Information Statement to all stockholders.
On the twenty-first day following the mailing of the definitive
Information Statement to the Company's stockholders, or as soon thereafter as
practicable, the Company will file the Charter Amendment with the Secretary of
State of the State of Delaware. Upon such filing, all of the outstanding shares
of Series A Preferred will automatically be converted into 5,330,671 shares of
restricted Common Stock ($6,996,506.85 divided by $1.3125) and the Company will
issue such 5,330,671 shares of Common Stock to Liao.
The Company represents to Liao that its Board of Directors has approved
the Company's entering into this Agreement and the transactions contemplated
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hereby and the shares of Common Stock and Series A Preferred contemplated herein
(the "Shares"), when issued to Liao, will have been duly authorized and validly
issued.
Liao represents to the Company that he is acquiring the Shares for
investment purposes and does not have the present intention of reselling or
distributing the Shares, that he understands the Shares have not been and will
not be registered under the Securities Act of 1933 (the "Act") in reliance upon
an exemption from such registration, that, as Chairman, Chief Executive Officer
and President of the Company, he has had the opportunity to obtain information
about the Company to his satisfaction, and that he is an "accredited investor"
as defined in Regulation D under the Act.
If you agree with the foregoing terms, please sign an original
counterpart of this letter and return a copy to us.
Very truly yours,
LIUSKI INTERNATIONAL, INC.
By: /s/ Martin Tsai
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Martin Tsai,
Chief Financial Officer
AGREED AND ACCEPTED
(as of the date first written above):
/s/ Duke Liao
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DUKE LIAO
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