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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
VALUESTAR CORPORATION
(Name of Issuer)
SERIES B CONVERTIBLE PREFERRED STOCK
(Title of Class of Securities)
919910 10 9
(CUSIP Number)
EBEN S. MOUTON
SEACOAST CAPITAL PARTNERS LIMITED PARTNERSHIP
55 FERNCROFT ROAD
DANVERS, MASSACHUSETTS 01923
TELEPHONE (978) 750-1300
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
DECEMBER 8, 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/A, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
|_ |.
Check the following box if a fee is being paid with the statement |X|. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) 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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<TABLE>
<CAPTION>
CUSIP No. 919910 10 9
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<S> <C> <C>
(1) Name of Reporting Persons. I.R.S. Identification Nos. of Above Seacoast Capital Partners Limited
Persons (entities only) Partnership; 04-3232653
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(2) Check the Appropriate Box if a Member of a Group (a) |X |
(b) |_ |
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(3) SEC Use Only
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(4) Source of Funds WC
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(5) Check Box if Disclosure of Legal Proceedings is Required |_ |
Pursuant To Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization Delaware
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Number of Shares Beneficially (7) Sole Voting Power 2,400,818
Owned by Each Reporting -------------------------------------------------------------------------------------
Person With (8) Shared Voting Power 0
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(9) Sole Dispositive Power 2,400,818
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(10) Shared Dispositive Power 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,400,818
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(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain |_ |
Shares
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(13) Percent of Class Represented by Amount in Row (11) 18.8
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(14) Type of Reporting Person PN
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</TABLE>
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<TABLE>
<CAPTION>
CUSIP No. 919910 10 9
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<S> <C> <C>
(1) Name of Reporting Persons. I.R.S. Identification Nos. of Above Eben S. Moulton
Persons (entities only)
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(2) Check the Appropriate Box if a Member of a Group (a) |X |
(b) |_ |
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(3) SEC Use Only
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(4) Source of Funds AF
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(5) Check Box if Disclosure of Legal Proceedings is Required |_ |
Pursuant To Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization United States
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Number of Shares Beneficially (7) Sole Voting Power 2,400,818*
Owned by Each Reporting -------------------------------------------------------------------------------------
Person With (8) Shared Voting Power 0
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(9) Sole Dispositive Power 2,400,818*
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(10) Shared Dispositive Power 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,400,818*
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(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain |_ |
Shares
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(13) Percent of Class Represented by Amount in Row (11) 18.8
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(14) Type of Reporting Person IN
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* Mr. Moulton disclaims beneficial ownership of these securities.
</TABLE>
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<TABLE>
<CAPTION>
CUSIP No. 919910 10 9
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<S> <C> <C>
(1) Name of Reporting Persons. I.R.S. Identification Nos. of Above Walter H. Leonard
Persons (entities only)
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(2) Check the Appropriate Box if a Member of a Group (a) |X |
(b) | _|
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(3) SEC Use Only
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(4) Source of Funds AF
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(5) Check Box if Disclosure of Legal Proceedings is Required |_ |
Pursuant To Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization United States
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Number of Shares Beneficially (7) Sole Voting Power 2,400,818*
Owned by Each Reporting -------------------------------------------------------------------------------------
Person With (8) Shared Voting Power 0
-------------------------------------------------------------------------------------
(9) Sole Dispositive Power 2,400,818*
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(10) Shared Dispositive Power 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,400,818*
- ---------------------------------------------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain |_ |
Shares
- ---------------------------------------------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 18.8
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(14) Type of Reporting Person IN
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* Mr. Leonard disclaims beneficial ownership of these securities.
</TABLE>
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<TABLE>
<CAPTION>
CUSIP No. 919910 10 9
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<S> <C> <C>
(1) Name of Reporting Persons. I.R.S. Identification Nos. of Above Jeffrey J. Holland
Persons (entities only)
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(2) Check the Appropriate Box if a Member of a Group (a) |X |
(b) |_ |
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(3) SEC Use Only
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(4) Source of Funds AF
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(5) Check Box if Disclosure of Legal Proceedings is Required |_ |
Pursuant To Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization United States
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Number of Shares Beneficially (7) Sole Voting Power 2,400,818*
Owned by Each Reporting -------------------------------------------------------------------------------------
Person With (8) Shared Voting Power 0
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(9) Sole Dispositive Power 2,400,818*
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(10) Shared Dispositive Power 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,400,818*
- ---------------------------------------------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain |_ |
Shares
- ---------------------------------------------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 18.8
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(14) Type of Reporting Person IN
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* Mr. Holland disclaims beneficial ownership of these securities.
</TABLE>
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ITEM 1 SECURITY AND ISSUER
The class of securities to which this statement relates is 2,400,818 shares (the
"Shares") of common stock, par value $.00025 per share (the "Common Stock"), of
Valuestar Corporation, a Colorado corporation (the "Issuer"), the principal
executive offices of which are located at 360-22nd Street, Suite 210, Oakland,
California 94612. 500,000 of the Shares are issuable upon conversion of certain
shares of Series A Preferred Stock, par value $.00025 per share, of the Issuer
(the "Series A Preferred Stock") issued to Seacoast Capital Partners Limited
Partnership, a Delaware limited partnership ("Seacoast"). 501,290 of the shares
are issuable upon conversion of certain shares of Series B Preferred Stock, par
value $.00025 per share, of the Issuer (the "Series B Preferred Stock") issued
to Seacoast. The remaining 1,399,528 Shares are issuable upon the exercise of
warrants to purchase Common Stock held by Seacoast.
ITEM 2 IDENTITY AND BACKGROUND
(a) This statement is being filed on behalf of Seacoast, Eben S. Moulton,
Walter H. Leonard, Jeffrey J. Holland (Messrs. Moulton, Leonard and Holland
are collectively referred to as the "Individual Control Persons"). Each of
the Individual Control Persons are the members of Seacoast Capital
Managers, L.L.C., a Delaware limited liability company and the sole general
partner of Seacoast ("SCC"). As a result, each Individual Control Person
may be deemed a beneficial owner of the Shares, although each Individual
Control Person disclaims such beneficial ownership.
(b) The principal office of Seacoast is located at 55 Ferncroft Road, Danvers,
Massachusetts 01923. The business address of each of the Individual Control
Persons is 55 Ferncroft Road, Danvers, Massachusetts 01923.
(c) Seacoast is engaged in the principal business of acquiring and holding
securities for investment purposes. Each of the Individual Control Persons
is primarily engaged as an investment principal for Seacoast.
(d) None.
(e) None.
ITEM 3 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Beneficial ownership of the reported securities was acquired by Seacoast through
the utilization of working capital derived from contributions of capital by its
partners and in consideration for an investment in the Issuer.
ITEM 4 PURPOSE OF TRANSACTION
Seacoast acquired the Shares for investment purposes.
ITEM 5 INTEREST IN SECURITIES OF THE ISSUER
The following item sets forth certain information regarding the beneficial
ownership of the Shares by Seacoast. Each Control Person can be deemed to
beneficially own the Shares only through its affiliation with Seacoast.
(a) Seacoast beneficially owns 2,400,818 shares of Common Stock, which
represents 18.8 percent of the total shares of Common Stock outstanding
(according to the Issuer there were 12,781,224 shares of Common Stock
issued and outstanding on December 8, 1999 [including Series A and Series B
Preferred Convertible Stock converted into shares of Common Stock]).
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(b) Seacoast exercises sole voting power with regard to 2,400,818 shares of
Common Stock and shares voting power with respect to none of such shares.
Seacoast exercises sole dispositive power with regard to 2,400,818 shares
of Common Stock and shares dispositive power with respect to none of such
shares.
(c) None
(d) None
(e) Not applicable
ITEM 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
The relative rights and preferences of the Preferred Stock are set forth in a
Certificate of Designation dated July 21, 1999 (the "Series A Certificate of
Designation"). The relative rights and preferences of the Series B Preferred
Stock are set forth in a Certificate of Designation dated December 7, 1999 (the
"Series B Certificate of Designation"). Seacoast and the Issuer, among others,
have entered into a Warrant Purchase Agreement dated March 31, 1999 (the
"Warrant Agreement"); (b) a Shareholder Agreement dated March 31, 1999, as
amended on July 22, 1999 (the "Shareholder Agreement"); (c) a Registration
Rights Agreement and Shareholder Agreement Amendment dated as of July 21, 1999
(the "Registration Agreement"); (d) an Investor Rights Agreement dated as of
December 8, 1999 (the "Investor Rights Agreement"); and (e) a Second Amendment
to Shareholder Agreement dated as of December 8, 1999 (the "the Second Amendment
to Shareholder Agreement" and, collectively with the Series A Certificate of
Designation, Series B Certificate of Designation, Warrant Agreement, Shareholder
Agreement, Registration Agreement, Investor Rights Agreement and the Second
Amendment to Shareholder Agreement, the "Agreements").
The Agreements grant Seacoast the right to designate a member of the Issuer's
board of directors until (a) Seacoast holds less than 20 percent of the warrants
issued pursuant to the Warrant Agreement (the "Warrants") and the shares of
Common Stock issuable upon exercise of the Warrants (the "Warrant Shares") or
(b) the occurrence of certain liquidity events as set forth in the Agreements.
In addition, each party to the Shareholder Agreement has agreed to vote its
shares of Common Stock for the slate of directors of the Issuer nominated in
accordance with the provisions of the Shareholder Agreement. The Agreements also
require that the Issuer will not enter into any agreement other than the
Agreements modifying or restricting the rights of any securities holder to vote
securities of the Issuer.
The Agreements grant Seacoast the preemptive right to purchase, pro rata in
accordance with its equity ownership of the Issuer, any securities issued by the
Issuer. The Agreements forbid the declaration or payment of any dividend without
the consent of Seacoast. If any dividend is paid by the Issuer, the Agreements
require the Issuer to pay Seacoast a dilution fee.
The Agreements provide that, under certain circumstances, Seacoast has the right
to require certain other parties to the Shareholder Agreement to sell their
shares of Common Stock to a buyer designated by Seacoast. In addition, under
certain circumstances, the Issuer has the right to require Seacoast to sell the
Shares to the Issuer at a price determined by reference to certain financial
data of the Issuer. The Agreements also provide that Seacoast has a right of
first refusal regarding and a right to participate in any proposed sales by
other parties to the Shareholder Agreement.
The Agreements include provisions that the Issuer will not issue any capital
stock other than Common Stock and Common Stock equivalents, and will not permit
any subsidiary of the Issuer to issue capital stock other than shares of capital
stock owned, directly or indirectly, by the Issuer. Further, the Issuer will not
(A) issue its capital stock or capital stock of any subsidiary, other than
pursuant to the Agreements; (B) dissolve, liquidate or effect any consolidation
or merger of the Issuer or any of its subsidiaries; or (C) effect any
reclassification, corporate reorganization, stock split or reverse stock split,
or other change in any capital stock.
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The foregoing is intended to be only a summary of certain provisions of the
Agreements and is qualified in its entirety by reference to such Agreements,
copies of which are filed as Exhibits to this Schedule and are incorporated
herein by reference.
ITEM 7 MATERIAL TO BE FILED AS EXHIBITS
99.5 Series B Preferred Stock Agreement, dated as of December 8, 1999,
among the Issuer, Seacoast and the other parties thereto.
99.6 Certificate of Designation of Series B Convertible Preferred Stock of
the Issuer dated December 8, 1999.
99.7 Investor Rights Agreement, dated as of December 8, 1999, among the
Issuer, Seacoast and the other parties thereto.
99.8 Second Amendment to Shareholder Agreement, dated as of December 8,
1999, among the Issuer, Seacoast and the other parties thereto.
<PAGE> 9
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.
SEACOAST CAPITAL PARTNERS LIMITED PARTNERSHIP
By: Seacoast I Advisors, LLC,
its general partner
By: /s/ Eben S. Moulton
--------------------------
Name: Eben S. Moulton
Title: Manager
Date: February 23, 2000
By: /s/ Eben S. Moulton
--------------------------
Name: Eben S. Moulton
Date: February 23, 2000
By: /s/ Walter H. Leonard
--------------------------
Name: Walter H. Leonard
Date: February 23, 2000
By: /s/ Jeffrey J. Holland
---------------------------
Name: Jeffrey J. Holland
Date: February 23, 2000
<PAGE> 10
Attached Exhibits
*99.5 Series B Preferred Stock Agreement, dated as of December 8, 1999,
among the Issuer, Seacoast and the other parties thereto.
*99.6 Certificate of Designation of Series B Convertible Preferred Stock of
the Issuer dated December 8, 1999.
*99.7 Investor Rights Agreement, dated as of December 8, 1999, among the
Issuer, Seacoast and the other parties thereto.
*99.8 Second Amendment to Shareholder Agreement, dated as of December 8,
1999, among the Issuer, Seacoast and the other parties thereto.
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* previously filed
