HII Technologies, Inc.

The confirmed plan took effect on May 20, 2016, and HII's common stock, Series A and B preferred stock, options and warrants were cancelled with no consideration. The filing says the SEC will revoke registration of the common stock, ending HII's obligation to file further reports. This carries out the cancellation set out in the April confirmation.

bankruptcy or receivership

On April 15, 2016 the bankruptcy court confirmed HII's Third Amended Joint Plan of Reorganization (corrected April 26); the effective date was not yet set. All existing common stock (63,132,329 shares), Series A preferred (4,000 shares), Series B preferred (2,950 shares), options and warrants will be cancelled on the effective date with no distribution to shareholders. The DIP lenders get 950,000 new convertible preferred shares (to become 95% of the reorganized equity) plus a share of a litigation trust, and unsecured creditors get 5% of the new common stock plus trust interests. This resolves the open question of how common shareholders would be treated. HII also agreed to an SEC settlement under which its stock registration will be revoked, and Loretta Cross became the sole director and officer.

bankruptcy or receivership

On January 4, 2016 HII's Frac Water Management business sold some non-core assets, including an exclusive distribution agreement for HydroFLOW water treatment equipment, to Heat Waves Water Management, LLC for $1,225,000 cash plus assumed liabilities. The bankruptcy court approved the sale on December 17, 2015, and under that order the proceeds go to Hilco Industrial ($211,500) and the DIP lenders ($783,500), with $50,000, $150,000 (BLC Equipment Leasing claim) and $30,000 (transfer tax) held back. HII and Apache also leased HydroFLOW units back to the buyer for 24 months. This is the first asset sale in the Chapter 11 case; the filing does not say what shareholders receive.

asset acquisition disposition

On October 14, 2015 the bankruptcy court entered a final order approving the roughly $12 million DIP facility with Heartland and McLarty Capital Partners: up to $500,000 of new money and an $11.5 million roll-up that satisfies the prepetition secured debt (owed at filing: $10,292,897.22 on the term loan and $890,680.71 on the receivables agreement). It bears 13.75% interest and matures at the earliest of six months after the filing, a confirmed plan, a sale of substantially all assets, or a default termination. The DIP lenders get priority over other claims. The filing also notes the October monthly operating report was filed with the court on November 20, 2015. This resolves the pending DIP request, but the filing does not say what happens to shareholders.

debt financing

On September 18, 2015 HII and its four subsidiaries (Apache Energy Services, Aqua Handling of Texas, Hamilton Investment Group and Sage Power Solutions) filed for Chapter 11 reorganization in the Southern District of Texas, Victoria Division (Case No. 15-60070). They asked the court to approve a DIP loan of up to $12 million from Heartland and McLarty Capital Partners, made up of up to $500,000 of new money and an $11.5 million roll-up of the existing Heartland debt. The filing also says bankruptcy lets Series B holders redeem at the greater of 112% of the amount or a share-price-based formula. This is the outcome of the default and forbearance sequence since July. The filing does not say what happens to common shares.

bankruptcy or receivership

On July 21, 2015 Apache Energy Services signed a factoring facility with Bay View Funding allowing advances of up to $1 million against receivables, with HII guaranteeing it. On August 21, 2015 HII also signed a Fifth Modification with Heartland that raised Term Loan 2 by $345,760.50 to $579,643.50, extended the pause on enforcement only to August 25, 2015, and required HII to repay $315,392.50 when the Bay View facility closed. HII again acknowledged existing defaults. This continues the short-dated forbearance with Heartland, and the Bay View facility is a replacement source of receivables funding after Heartland said it would stop advancing under its own facility.

debt financing

On August 7, 2015 HII and Heartland signed a Fourth Modification and Forbearance Agreement. HII confirmed about $9.2 million of principal and $96,737 of interest on the term loan and acknowledged existing defaults. Heartland and the lenders agreed not to enforce their rights until August 15, 2015, and a new $233,833 Term Loan 2 was funded by the lenders and Magna Equities II, with the second tranche of $68,725 at the lenders' sole discretion. HII also gave up defenses and released the lenders from claims. The filing is signed by a Chief Restructuring Officer, Loretta R. Cross, rather than the CEO (the first such signature in this record).

debt financing

On July 9, 2015 Heartland's lawyers sent HII and its subsidiaries a Notice of Default that did not say what the default was. Heartland took $675,000 from the reserve account and applied it to the term loan, and said it would stop advancing funds under the receivables facility. About $9.2 million was outstanding on the term loan and about $2.26 million on the receivables facility. Heartland did not demand immediate repayment. The filing says the default could raise the interest rate to as much as 18.75%, let Nations Fund I demand about $1.4 million under an equipment lease, and let Series B holders convert at 85% of the recent average share price, with the dividend rising from 12% to 15%. This follows the May covenant waiver and the Series B raise, whose proceeds partly went to the Heartland restricted account.

debt financing

On May 20, 2015 HII sold the first 2,735 Series B preferred shares and warrants for 3,418,750 common shares to 14 investors for $2,735,000. The same day Heartland Bank waived covenant defaults under the August 2014 credit facility for periods ended December 31, 2014 and March 31, 2015, and waived default interest through March 31, 2015. In return, the term loan interest rate rose to 13.75%, principal payments became $110,000 a week, and covenants were reset. About $1.97 million of the raise goes to accounts payable and $757,575 to a restricted account for the Heartland term loan. The filing shows the company had breached its loan covenants.

capital raising announcement

On May 12, 2015 HII agreed to sell 3,050 shares of Series B Convertible Preferred Stock to accredited investors for expected gross proceeds of $3,050,000. The preferred pays a 12% cumulative dividend, converts at $0.40 per share and comes with five-year warrants for 3,812,500 common shares at $0.50. This adds new preferred stock ranking ahead of common shareholders for dividends, and potential dilution if converted or exercised.

capital raising announcement

This amended report adds the financial statements and pro forma figures for the August 12, 2014 purchase of Hamilton Investment Group, which was bought for $9,000,000 cash and 3,523,554 HII shares, plus a working-capital adjustment. It also restates the terms of the Heartland Bank $12 million three-year term loan and up to $6 million receivables facility used to fund it, with a 4-year warrant for 2.5 million shares at $1.00 given to the lenders. Also disclosed are an employment agreement with William Hamilton ($125,000 a year) and a $1,516,000 equipment purchase from his company, S&M Assets, leased meanwhile at $10,000 a month. The Hamilton deal adds debt and share dilution on top of the Apache business bought in 2012.

asset acquisition disposition

On August 12, 2014 HII bought Hamilton Investment Group for $9,000,000 cash and 3,523,554 common shares (valued at $2,300,000), subject to a working capital adjustment. It financed this with a new Heartland Bank senior secured facility: a 3-year $12 million term loan at WSJ prime plus 5.50% to 8.25% (maturing August 12, 2017), and an account purchase agreement for up to $6 million of receivables, which replaced the earlier receivables facility. Heartland also received a 4-year warrant for 2.5 million shares at $1.00 and a $450,000 fee, and the loans carry financial covenants and are secured by all borrower assets and the subsidiary equity. Hamilton's president William Hamilton got a 2-year employment agreement at $125,000, and HII agreed to buy equipment from his company S&M Assets for $1,516,000 on or before August 12, 2015, with a $10,000 monthly lease in the meantime. This is the largest deal in the company's history and a much bigger debt load, replacing the Rosenthal facility.

asset acquisition disposition

Between June 21 and July 2, 2014 HII sold 4,000 units at $1,000 each to 22 accredited investors for $4,000,000 gross. Each unit has one Series A convertible preferred share (convertible at $0.70 per common share) and warrants for 550 common shares at $1.00 for 3 years. Of the proceeds, $124,250 went to placement agent fees and about $500,000 repaid 10% promissory notes, with the rest for working capital and growth opportunities. The authorized Series A shares were raised from 3,000 to 4,000, and the issue adds dilution for existing common holders.

capital raising announcement

On November 12, 2013 HII bought Aqua Handling of Texas, LLC for $300,000 cash, $500,000 of 5% subordinated secured notes due November 1, 2016 and 1,443,696 common shares. To fund it, HII issued $750,000 of 10% convertible notes (convertible at $0.50 a share, two-year term) to six investors, of which $600,000 was new cash and $150,000 replaced an earlier note. Aqua's co-owner Chris George got a three-year employment agreement and an option for 250,000 shares at $0.38. This is a second acquisition after Apache, adding debt and some dilution; the acquired company's financial statements were promised by amendment.

asset acquisition disposition

On June 26, 2013, subsidiaries KMHVC, Inc. and Apache Energy Services entered a $2 million revolving receivables financing facility with Rosenthal & Rosenthal. Borrowing is capped at the lesser of $2 million or 85% of eligible receivables, at prime plus 4.00%, secured by the borrowers' assets and guaranteed by HII with its own assets. The initial term is two years, with a $30,000 closing fee, $20,000 annual fee and monthly charges. This is new bank-style debt backing the Apache business.

material agreement

On September 26, 2012 HII Technologies bought all of Apache Energy Services LLC for $290,000 in cash, $1,300,000 of 5% subordinated secured notes (maturing November 1, 2015) and 6,500,000 restricted shares vesting 500,000 per quarter from December 31, 2012. Apache's founders Brent Mulliniks and Billy Cox got three-year employment agreements at $180,000 a year plus quarterly bonuses, and Mulliniks joined the board. The company also sold $300,000 of 10% secured notes due September 13, 2013, with Class A warrants for 1,800,000 shares and Class B warrants for up to 900,000 shares, both at $0.10. This is a new business after the earlier asset sales, and it adds debt and share dilution.

asset acquisition disposition

HII Technologies, Inc. deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

On June 30, 2010 Eads Investments I and D. Bradley McWilliams bought the company's Stillwater National Bank debt, and Stillwater released the company and Hemiwedge Valve Corporation. The debt was replaced by a 10% note for $706,125 due June 30, 2011, secured by all assets and the subsidiary's stock, with forbearance from accelerating the loans. The new lenders also got 5-year warrants for 2,875,000 shares at $0.10, cut to 575,000 if the note is sold or repaid by August 15, 2010; interest can be paid in stock at 5,000 shares per day. This ends the long Stillwater lending relationship.

capital raising announcement

The company, now named Hemiwedge Industries, was told on June 19, 2009 that its Q1 2009 quarterly report was incomplete, so it is not current in its filings. Unless the filing was received by July 20, 2009, its stock would be removed from the OTC Bulletin Board (effective July 22) and trade on the pink sheets. The company said it did not intend to appeal or expect to fix the filing in time, but plans to reapply when current. It also said it is still evaluating strategic options, including a merger, sale of all or part of the company, restructuring or recapitalization, with no plan adopted.

listing compliance notice

The company said its 2007 annual report (10-KSB/A) should no longer be relied on, because a $2 million debt forgiveness from Stillwater was booked as 2006 income and should instead be recorded as additional paid-in capital. The 2006 net loss increases by $2 million; total equity is unchanged by the move. Revised statements will be filed in Amendment No. 2, and the auditors agree with the change. This revisits the 2006 Stillwater forgiveness noted in the company's history.

financial restatement

On October 15, 2008 the company and Hemiwedge Valve Corporation transferred assets and granted licence rights for the Hemiwedge valve technology to Tejas Research & Engineering for $3.5 million in cash plus a 5-year warrant for 2,443,269 shares at $0.25 (about 9.99% of shares outstanding). The licence covers sub-sea, offshore, drilling and workover, surface safety and all downhole fields, plus two pending patent applications and trademark use in those fields; Tejas transferred the warrant to Intervale Capital. This appears to be the HemiWedge licensing deal flagged earlier as pending, though the filing does not link them, and it covers the downhole and sub-sea applications.

capital raising announcement

The sale of Shumate Machine Works' assets to American International Industries closed on October 8, 2008, at an aggregate price of $6,703,749: the buyer took over $5 million of Stillwater notes plus $1,703,749 of other liabilities. The company expects to issue about 1,401,170 shares (about $420,351 at $0.30) to the buyer under the working-capital adjustment, subject to final calculation within 45 days. Larry Shumate resigned as President, CEO and Chairman, and Kenton Chickering III, previously head of Hemiwedge Valve Corporation, replaced him. This resolves the pending sale and removes the contract machining business, leaving Hemiwedge as the remaining operating subsidiary named in the filing.

asset acquisition disposition

On August 29, 2008 the company and its subsidiary Shumate Machine Works agreed to sell substantially all of Machine Works' assets to American International Industries for $5,000,000 plus assumed liabilities. The $5,000,000 could be paid in cash or by the buyer taking over the company's Stillwater term notes (up to $5,000,000). The deal was conditional on the buyer getting Stillwater financing, and closing was expected around October 1, 2008. Up to $700,000 of company stock (price capped at $0.40) could be issued to the buyer if liabilities exceed working assets.

material agreement

On January 25, 2008 the company and its subsidiaries signed an amended loan agreement with Stillwater. A new term note of $3,329,000 replaces the old one (about $3,003,998 outstanding), now due April 19, 2010 instead of April 2008, and a new $1,000,000 revolver (about $893,676 drawn) runs to April 19, 2009. Both carry prime plus 2%, and now also have a security interest in certain personal assets of CEO Larry Shumate. This pushes out the maturity of the debt that was due in April 2008, supersedes the earlier balloon structure, and the term note requires 26 equal monthly payments from February 28, 2008 sized to amortise over 64 months.

material agreement

On November 5, 2007 Sunbelt terminated the August 2007 agreement to be acquired by the company. The filing says the principal reason was the company's inability to obtain the financing the closing required. The company now plans to buy about $2 million of equipment and lease a building next to its Conroe plant to make more HemiWedge valves, which management says would dilute shareholders less than the Sunbelt deal would have. This ends the Sunbelt thread without a deal.

material agreement termination

On August 17, 2007 the company agreed to buy Sunbelt Machine Works Corporation for about $14,500,000: $9,000,000 cash, about $0.5 million of assumed debt, a $2.5 million note and $2.5 million of company stock. Closing depended on the company raising at least $14,000,000 in financing and was expected by September 30, 2007; a $150,000 break-up fee applies to certain terminations. This would be the company's first acquisition since HemiWedge, and it is not completed.

material agreement

On July 10, 2007 the company agreed to issue a $2,000,000 convertible note (10%, one-year term, convertible at $1.89) and a warrant for 400,000 shares at $1.89 to a single accredited investor, with net proceeds of about $1,850,000 for working capital and general corporate purposes. The note must be prepaid if the company completes a later equity financing within 12 months. This adds new debt and potential dilution; SMH Capital was paid $140,000 in commissions.

capital raising announcement

This amended filing revises the fall 2006 offering: through December 14, 2006 the company sold 3,787,550 shares at $1.00 (not $1.10) for $3,787,550 gross, with 1,893,775 Class A warrants at $1.25 and no Class B warrants. It also reports that on December 1, 2006 the company paid Stillwater $525,000 in full settlement of the $2.5 million debenture, with the remaining principal and about $225,000 of accrued interest cancelled. This resolves the open thread on the Stillwater note. Stillwater still holds 2,368,000 shares (about 13%), plus an equipment term loan of about $3.46 million and about $900,000 on the credit line as of September 30, 2006. Investors have full-ratchet protection on sales below $1.00 until the earlier of March 14, 2008 or a definitive distribution agreement with @Balance.

capital raising announcement

Between October 30 and November 3, 2006 the company sold 953,228 shares at $1.10 each in a private placement for gross proceeds of $1,048,550, with Class A ($1.50) and Class B ($1.75) warrants of 238,308 each, and more closings expected. Proceeds are meant for the HemiWedge launch and working capital, including settling the $2.5 million Stillwater debenture for $525,000. Investors get full-ratchet price protection if the company later sells shares below $1.10, which could dilute existing holders further, and the company must file a resale registration within 30 days of the final closing.

capital raising announcement

On July 13, 2006 the HemiWedge subsidiary signed a two-year development agreement (expires July 12, 2008) with At Balance Americas, a Shell Technology Ventures subsidiary, to jointly develop a downhole isolation valve. The company's subsidiary keeps ownership of any new technology; At Balance may later get a worldwide exclusive purchase right if it chooses to commercialise, subject to conditions including an exclusivity fee, a minimum purchase and funding of some or all of the production capital. Shell Technology Ventures also received rights to invest in future financings, behind the February 2006 investors. This extends the HemiWedge line begun in December 2005; no money amounts are stated.

material agreement

On April 13, 2006 Stillwater agreed to accept $500,000 in full payment of the $2,500,000 convertible note from the October 2005 restructuring, if it is paid by September 1, 2006 from new equity funds (not borrowed money) on terms no better than those recently approved by Stillwater. If this happens the company expects about $2,000,000 of debt forgiveness income; it is conditional and not yet done.

material agreement

The company and Stillwater signed an amendment forgiving $2,000,000 of the term note from the October 2005 restructuring, replaced by a new note of $3,633,053 due April 19, 2008, which follows through on the debt forgiveness flagged in February. Separately, Shumate Machine Works replaced its lease on its ~25,000 sq ft Conroe plant with a five-year lease at $18,600 a month, which is $4,000 a month lower. (The filing says the amendment was dated March 31, 2005, which appears to be a typo for 2006 - inference.)

material agreement termination

On February 22, 2006 the company sold 3,333,333 shares at $0.60 in a private placement (First Montauk as placement agent for 2,500,000), netting about $1,810,000 to launch the HemiWedge valve, and for working capital. The press release says the total raise was $2.25 million with the December 2005 closing, and that Stillwater agreed to forgive about $2.0 million of the $5.6 million term loan; this adds shares and dilutes existing holders but cuts debt.

capital raising announcement

On December 5, 2005 the company, through a new subsidiary HemiWedge Valve Corporation, bought the HemiWedge valve patents, trademarks and website from Soderberg Research and Development for $138,500 cash, a $100,000 two-year 6% note, $72,000 in escrowed monthly advances and 3% of related net sales through March 29, 2013. This starts a new product line alongside Shumate Machine Works; the cash was funded by A. Earl Swift buying 416,667 shares at $0.60 ($250,000). On December 1 the machine works also leased a ~60,000 sq ft Conroe facility (about $14,000 a month, with a purchase option at $1,825,000).

bankruptcy or receivership

This amended 8-K replaces the October 25 report to reflect post-closing adjustments to the October 19, 2005 restructuring. The main change is that the restated Stillwater term note is about $5,600,000 (not ~$4,000,000), with interest-only payments for six months and 24 monthly payments after that; the other terms (convertible note, share swaps, restricted stock) are unchanged in the text.

capital raising announcement

On October 19, 2005 the company (now renamed Shumate Industries, formerly Excalibur Industries) completed an out-of-court debt restructuring, resolving the Excalibur Holdings/Shumate Machine Works stock sale threat from earlier in 2005: Stillwater transferred 100% of Shumate Machine Works' stock to the company. Stillwater's notes of about $9,413,000 were restated into a ~$4,000,000 term note, plus a $2,500,000 convertible note (at $1.00 per share) and $2,368,000 of debt swapped for shares (not less than 20% of the post-deal stock). Unsecured notes were swapped for about 1,691,310 shares (~14.61%), about 3,950,000 restricted shares (~34.12%) went to officers and directors, and a 1-for-7 reverse split took effect, so existing shareholders were heavily diluted.

capital raising announcement

This continues the Excalibur Holdings bankruptcy. On April 20, 2005 the court lifted the stay so Stillwater National Bank, the senior lender, could enforce its rights over the Shumate Machine Works stock, including foreclosure. Stillwater has given notice that it intends to sell the Shumate stock in a private sale after May 9, 2005, and Excalibur Industries says it intends to bid. The filing does not say whether the bid will succeed.

bankruptcy or receivership

On March 9, 2005 Excalibur Holdings, the subsidiary created in the 2002 merger and parent of Shumate Machine Works, filed for Chapter 7 bankruptcy in the Southern District of Texas, listing about $13.6 million of liabilities. Shumate's stock is the estate's only asset and is pledged to senior lender Stillwater National Bank, which could sell it or a third party could buy it. Excalibur Industries and Shumate did not file, and Excalibur Industries says it intends to bid for the Shumate stock if it is put up for sale.

bankruptcy or receivership

On April 8, 2002 the company (then named Global Realty Management Group, Inc.) merged with Excalibur Holdings, Inc., a Texas steel fabrication and manufacturing group, which became its wholly owned subsidiary. Excalibur shareholders received 11,633,699 common shares, 1,000,000 Series A preferred and 806,000 Series B preferred (each preferred convertible into one common share). The filing says the company intends to rename itself Excalibur Industries, Inc., and Excalibur's management replaced the former directors and officers. This explains the earlier large holder notices and marks a complete change of business and control. Financial statements for the acquired business were promised by amendment within 60 days.

asset acquisition disposition