UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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) February
18, 2005
|
STREICHER
MOBILE FUELING, INC. |
|
(Exact
name of registrant as specified in its
charter) |
|
FLORIDA |
000-21825 |
65-0707824 |
|
(State
or other jurisdiction of
incorporation) |
(Commission
File
Number) |
(I.R.S.
Employer Identification
Number) |
|
800
W. Cypress Creek Rd., Suite 580 Fort
Lauderdale, Florida |
33309 |
|
(Address
of principal executive offices) |
(Zip
Code) |
Registrant’s
telephone number, including area code: (954)
308-4200
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
| ¨ |
Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425) |
| ¨ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
| ¨ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b)) |
| ¨ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c)) |
Item
1.01 Entry into a Material Definitive Agreement
See
Items 2.01 and 2.03, which are incorporated by reference herein.
Item
2.01 Completion of Acquisition or Disposition of Assets
As
reported in its Form 8-K filed January 31, 2005, Streicher Mobile Fueling, Inc.
(the "Company") and SMF Services, Inc., a Delaware subsidiary of the Company
(“SSI”), entered into an agreement (the “Agreement”) with Shank C & E
Investments, L.L.C., a Delaware limited liability company (“Shank Investments”),
operating under the trade name of “Shank Services”, and its members, Jerry C.
Shanklin and Claudette Shanklin (together, the “Members”), on January 25, 2005,
which provided that SSI would acquire substantially all of the assets of Shank
Investments for cash and debt. The acquisition contemplated by the Agreement was
closed on February 18, 2005 (the “Acquisition”). In the Acquisition, Shank
Investments’ vehicles, trailers, tanks, other operating equipment, business
interests and related intangibles (the “Assets”) were purchased for $5.2
million, of which $3.3 million was paid in cash and $1.9 million in the form of
a two year deferred payment promissory note (the “Note”). The payment of the
Note is subject to specified financial performance of the combined Texas
operations of the Company and the former Shank Investments operations during the
eighteen month period ending December 31, 2005 (the “Performance Period”).
At
the closing, SSI and the Company entered into a Supplemental Agreement with
Shank Investments regarding a number of closing items, including final agreement
as to the purchase price for the accounts receivable acquired from Shank
Investments at $2.8 million. SSI also purchased approximately $160,000 of
inventory at closing which, after accounting for $480,000 in adjustments for the
cost of replacement equipment, brought the net acquisition price to $7.7
million, before Performance Period adjustments, if any. SSI will continue to
operate the acquired business under the trade name of Shank Services, and will
continue to engage in commercial fuel, oil and lubricant distribution and sales
and in heavy haul transportation services, with operations in Houston,
Dallas/Fort Worth, Austin and San Antonio, Texas.
A
copy of the Agreement was attached as Exhibit 2.1 to the Form 8-K filed on
January 31, 2005, and the Supplemental Agreement is attached hereto as Exhibit
2.1. Both documents are incorporated by reference herein.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
See
Item 2.01, which is incorporated by reference herein. The Note delivered by SSI
to Shank Investments at the closing of the Acquisition was for the principal
amount of $1,912,185.60 and otherwise conformed to the form of note attached as
Exhibit C to the Agreement, which is incorporated by reference herein from the
Form 8-K filed on January 31, 2005. The payment of the Note is guaranteed by the
Company.
Also
on February 18, 2005, the Company entered into a Fourth Amendment to the Loan
and Security Agreement (the “Amendment”) with its primary lender, Wachovia Bank,
National
Association,
successor by merger to Congress Financial Corporation (Florida) (the “Bank”)
which, among other things, (i) added SSI as a co-borrower with the Company, (ii)
provided financing for the newly acquired and ongoing accounts receivable and
inventory resulting from the Acquisition, (iii) extended the term of the
original Loan and Security Agreement for an additional year to September 25,
2006, (iv) reduced the interest rate to prime plus 1.75%, (v) modified the
Effective Net Worth covenant so that it is only applicable if availability is
below $1,000,000, and (vi) lowered the Fixed Charge Coverage Ratio covenant from
1.5 to 1 to 1.1 to 1. In connection with the Amendment, the parties to the
Acquisition and the Bank entered into a Subordination Agreement (the
“Subordination Agreement”) by which Shank Investments and the Members agreed to
subordinate their rights under the Note and the Agreement to the Bank’s rights
under the Loan and Security Agreement, as amended. Copies of the Amendment and
the Subordination Agreement are attached hereto as Exhibits 10.1 and 10.2 and
are incorporated by reference herein.
Item
3.02 Unregistered Sale of Equity Securities
See
Items 2.01 and 2.03, which are incorporated by reference herein. The Note
provides that, under certain circumstances, payment of a portion of the
principal and accrued interest on the Note may be made in the form of shares of
the Company’s common stock, $0.01 par value (“Common Stock”). If there is a
reduction of more than five percent (5%) of the $5.2 million purchase price (the
“Purchase Price”) for the Assets on account of adjustment to the Note resulting
from the financial performance of the combined Texas operations of the Company
and the former Shank Investments operations during the Performance Period, then
it is SSI’s election whether to pay up to fifty percent (50%) of the Note with
Common Stock instead of cash. On the other hand, if the total adjustment to the
Note is less than five percent (5%) of the Purchase Price, then it is Shank
Investments’ election whether to receive payment in cash, Common Stock, or some
combination thereof, provided, however, that SSI may elect to limit the payment
in Common Stock to fifty percent (50%) of the total amount owing on the Note,
including interest thereon. In either case; the payment by SSI of shares of
Common Stock is further limited so that the number of shares of Common Stock
that are paid, when taken together with the number of shares of Common Stock
issuable upon conversion of the warrants issued in connection with the Company’s
offering of its 10% Senior Secured Notes due 2010, must be less than 20% of the
number of shares of Common Stock outstanding at the time of closing (20% of
7,475,101 shares, or 1,494,000 shares) in accordance with Nasdaq Stock Market
Rule 4350(i)(I)(C) or any successor rule.
If
SSI or Shank Investments does elect to have some portion of the principal and
interest payable under the Note paid in Common Stock, then the conversion price
for the amounts so paid is set at the higher of (i) the closing bid price of the
Common Stock on Nasdaq on the Closing Date, or (ii) one hundred twenty five
percent (125%) of the average closing bid price of the Common Stock for the ten
(10) trading days before the Closing Date, provided, however, that under no
circumstances shall such price be less than the fair market value of the Common
Stock on the Closing Date as determined by Nasdaq Stock Market Rule
4350(i)(I)(D)(i) or any successor rule. Based on this formula, the conversion
price has been calculated at $2.17 per share of Common Stock.
The
offer and sale of the Note and the underlying shares of the Common Stock which
may be issued pursuant to the Note were exempt from registration under the
Securities Act of 1933 (the “Act”) as a private offering to an “accredited
investor” under Sections 4(2) and 4(6) of the Act and Rules 505 and 506 of
Regulation D promulgated thereunder.
Item
9.01 Financial Statements and Exhibits
(a)
Financial statements of businesses acquired.
The
financial statements required to be filed as part of this Report will be filed
by the Company by amendment to this Report no later than May 9,
2005.
(b)
Pro forma financial information.
The
financial information required to be filed as part of this Report will be filed
by the Company by amendment to this Report no later than May 9,
2005.
(c)
Exhibits
Exhibit
No.
| |
2.1 |
Supplemental
Agreement dated February 18, 2005 to the Asset Purchase Agreement by and
among Streicher Mobile Fueling, Inc., SMF Services, Inc., Shank C&E
Investments, L.L.C., Jerry C. Shanklin and Claudette Shanklin dated
January 25, 2005. |
| |
10.1 |
Fourth
Amendment to Loan and Security Agreement by among Streicher Mobile
Fueling, Inc., SMF Services, Inc. and Wachovia Bank, National Association,
successor by merger to Congress Financial Corporation (Florida) dated
February 18, 2005. |
| |
10.2 |
Subordination
Agreement by, between and among Shank C&E Investments, L.L.C.,
Wachovia Bank, National Association, successor by merger to Congress
Financial Corporation (Florida), SMF Services, Inc. and Streicher Mobile
Fueling, Inc. dated February 18, 2005. |
SIGNATURE
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.
Date:
February 25, 2005
STREICHER MOBILE
FUELING, INC.
By:
/s/Richard E. Gathright
Richard
E. Gathright, President and CEO