U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): December 21, 1999
BALTIC INTERNATIONAL USA, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1-12908 76-0336843
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5151 San Felipe, Suite 1661, Houston, Texas 77056
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (713) 961-9299
<PAGE> 2
Item 5 Other Events
On December 28, 1999, the Registrant issued a press release announcing
it signed of a Letter of Intent to execute a Share Purchase Agreement
for the purchase of Advanced Reclamation Company, L.L.C. ("ARC")
from the Nicol Family Partnership. Under the agreement, Baltic
will purchase all of the shares of ARC for cash of $400,000, a
total of 500,000 Baltic common shares, a note payable to seller of
an additional $400,000 and an earnout agreement. The parties
expect to close the transaction in January 2000. The press release
is attached hereto as Exhibit 99.1.
Item 7 Financial Statements and Exhibits
(c) Exhibits
99.1 News Release dated December 28, 1999
<PAGE> 3
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 hereunto duly authorized.
BALTIC INTERNATIONAL USA, INC.
By: /s/ David A. Grossman
--------------------------------
DAVID A. GROSSMAN, President and
Chief Financial Officer
Dated: December 28, 1999
<PAGE> 4
EXHIBITS
Exhibit
No.
99.1 News Release dated December 28, 1999
BALTIC INTERNATIONAL USA, INC.
5151 San Felipe, Suite 1661 - Houston, Texas 77056
NEWS RELEASE
Contacts: Robert L. Knauss, Chief Executive Officer
David A. Grossman, President and Chief Financial Officer
Telephone: (713) 961-9299
Facsimile: (713) 961-9298
FOR IMMEDIATE RELEASE
Baltic International USA, Inc. Announces
Letter of Intent for Purchase of
Advanced Reclamation Company
HOUSTON, Texas, December 28, 1999 -- Baltic International USA, Inc. (OTC BB:
BISA) announced today the signing of a Letter of Intent to execute a Share
Purchase Agreement for the purchase of Advanced Reclamation Company, L.L.C.
("ARC") from the Nicol Family Partnership. Under the agreement, Baltic will
purchase all of the shares of ARC for cash of $400,000, a total of 500,000
Baltic common shares, a note payable to seller of an additional $400,000 and an
earnout agreement. The parties expect to close the transaction in January
2000.
ARC was formed in 1996 as the result of new government regulations that
tightened laws on the disposal and manufacturing of refrigerants. ARC is based
in League City, Texas and is engaged in the recovery and reclamation of used
refrigerants from its facility and at the customers' locations throughout the
gulf coast areas of the United States. Many of these locations are in the
petrochemical industry and commercial and residential building and demolition
industries of Texas. ARC is properly certified by the U.S. Environmental
Protection Agency and meets or exceeds all regulatory requirements for
operations issued by the State of Texas.
David A. Grossman, President and CFO of Baltic, stated, "Through our due
diligence on several potential acquisitions, we believe that the acquisition of
ARC will provide us with an operation that presents an opportunity for notable
growth. This growth will come from a focus on the sales and marketing in ARC's
current markets as well as our pursuit of additional markets."
Tom Nicol, Managing Partner of the Nicol Family Partnership, stated "We are
delighted with the transaction. The stability and forward looking strategies
of Baltic, both marketing and management, offer excellent opportunities for the
continued growth of ARC throughout the year 2000 and beyond."
The production of chloroflourocarbons ("CFCs") and hydrochloroflourocarbons
("HCFCs"), the most commonly used refrigerants, are subject to extensive and
changing regulation under the federal Clean Air Act. Production of CFCs for
use in the United States ceased on December 31, 1995. Since this production
phaseout, the national supply of CFCs has depended upon the quantity of CFCs
contained in stockpiles at the beginning of 1996 and the quantity of CFCs
reclaimed from existing air conditioning and refrigeration equipment.
According to the EPA's Report on the Supply and Demand of R-12 in the United
States dated June 9, 1999, demand for reclaimed R-12, a CFC, could increase
noticeably from 1999 to 2005 as owners of refrigerant equipment are faced with
the prospect of a shortage. This is due to the much slower than expected rate
of retirement and conversion for R-12 chillers. Production of HCFCs is limited
by the Clean Air Act and is scheduled to be phased out by the year 2030.
In addition to recovering and reclaiming refrigerants for their own account,
ARC sub-contracts with several large maintenance contractors to assist in
performing maintenance projects by recovering used refrigerants, then either
purchasing the used product for proprietary reclamation and sale or reclaiming
it on a fee basis and returning it to the prime contractor. Additionally, ARC
is contracted by structural demolition contractors to recover used refrigerant
products from coolers prior to the razing of commercial buildings. The product
is then purchased and reclaimed for ARC's proprietary markets.
BIUSA owns American Distributing Company. The Company's homepage is currently
at http://ourworld.compuserve.com/homepages/baltic_intl/.
This document may contain forward-looking information. Although the Company
believes that the assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could be inaccurate, and therefore, there
can be no assurance that the forward-looking statements included herein will
prove to be accurate.
