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
June 17, 2004
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Date of Report
AMERICAN LEISURE HOLDINGS, INC.
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(Exact name of registrant as specified in its Charter)
Nevada 333-48312 75-2877111
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(State of Incorporation) (Commission File No.) (IRS Tax Identification No.)
Park 80 Plaza East, Saddle Brook, NJ 07663
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(Address of Principal Executive Offices) (Zip Code)
(210) 843-0820
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(Registrant's Telephone No.)
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ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
New Credit Facilities
On June 17, 2004, American Leisure Holdings, Inc. (the "Company")
entered into two new credit facilities with Stanford Venture Capital Holdings,
Inc. ("Stanford"). The terms of these facilities and certain related
transactions are described below.
A. $1,000,000 Credit Facility.
The Company and Stanford have entered into a Credit Agreement dated as
of June 17, 2004, pursuant to which the Company has borrowed $1,000,000 from
Stanford.
The proceeds of the loan will be used by the Company to fund operating
and related costs of the Company's customer service and marketing center located
in Antigua. This facility is owned by Caribbean Leisure Marketing Ltd. ("CLM").
CLM is 100% owned by Castlechart Limited, which in turn is 100% owned by the
Company.
The loan bears interest at 8% per annum, payable quarterly in arrears.
All principal is due in one lump sum on April 27, 2007.
The loan is secured by a lien on all shares of CLM and all of the
shares of Castlechart Limited. Both liens are subordinated to existing liens
previously granted to Stanford for an earlier loan.
Under the credit agreement, the loan is non-recourse to the Company
except in certain limited circumstances.
The loan is convertible by Stanford at any time into shares of the
common stock of the Company, at a conversion price of $10.00 per share.
B. $3,000,000 Credit Facility.
The Company and Stanford have entered into a Credit Agreement dated as
of June 17, 2004, pursuant to which the Company may borrow up to $3,000,000 from
Stanford. To date, the Company has received $2,514,000, and expects to receive
the remaining $486,000 in August 2004.
The proceeds of the loan will be used by the Company to support the
Company's proposed acquisition of Around The World Travel, Inc. and to pay
expenses of the Company's travel division. Certain of the company's travel
division subsidiaries are co-borrowers.
The loan bears interest at 8% per annum, payable quarterly in arrears.
The principal balance is due in one lump sum on April 27, 2007.
The loan is secured by the following:
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(i) A lien on the stock owned by the Company in all of the
co-borrowers except the Corporation;
(ii) a collateral assignment of the Company's rights under a
certain Option Agreement dated as of May 17, 2004, under which
the Company has the right to acquire all of the membership
interests in Around The World Holdings, LLC. This company owns
a majority of the outstanding common stock of AWT.
(iii) a collateral assignment of certain notes payable made by
AWT which are held by the Company. These notes evidence loans
in the outstanding principal amount of $19,200,000, and are
secured by a first priority lien on substantially all of the
assets of AWT.
(iv) all of the other assets, property and rights of the
Company's active travel division subsidiaries other than CLM
and Castlechart.
The loan is convertible at the option of Stanford at any time into
shares of the Company's common stock, at a conversion price of $10.00 per share.
C. Amendment of the Designation of the Series C Preferred Stock Terms
In connection with the new credit facilities, the Company, with the
consent of the holders of more than 75% of the issued and outstanding Series C
Preferred Stock, amended the terms of the Company's Series C Preferred Stock to
eliminate any obligation of the Company to redeem the Series C Preferred Stock.
Stanford holds approximately 82% of the Series C shares.
D. Modification of Certain Existing Warrants
In connection with the new credit facilities, the Company agreed to
modify the terms of certain warrants previously issued to Stanford and certain
individuals affiliated with Stanford. These warrants, which were issued in
December 2003, entitled the holders to purchase 1,350,000 shares of the
Company's common stock at an exercise price of $2.96 per share. Under the terms
of the amendment, the Company agreed to reduce the exercise price of warrants to
$.001 per share. No other terms of these existing warrants were changed.
E. Issuance of New Warrants
As additional consideration for the new credit facilities, the Company
issued warrants to purchase common stock of the Company to Stanford and certain
of its affiliates. These warrants allow the holders to purchase 500,000 shares
at an exercise price of $5.00 per share. These warrants have a five year term.
F. Grant of Registration Rights
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In conjunction with the new credit facilities, the Company and Stanford
entered into a Registration Rights Agreement pursuant to which the Company
agreed to register the shares issuable to Stanford and its affiliates upon the
conversion of the loans under the new credit facilities. The Company has agreed
to file a registration statement for this purpose with the Securities and
Exchange Commission on or before August 15, 2004. The Company is currently
seeking to modify this agreement to extend the date for filing the registration
statement until November 2004.
G. Management Agreement with AWT.
The Company has made an agreement with AWT, d/b/a TraveLeaders to
manage the growth and expansion of its travel division. AWT will have access to
the services of the Company's travel subsidiaries' staff and resources. Its
duties include recommendations for structural change within the division,
candidates for acquisition by the Company for the travel division and the
integration of the existing subsidiaries into a cohesive and cutting edge
services and distribution enterprise.
H. Press Release.
On August 3, 2003, the Company issued a press release relating to the
new credit facilities. A copy of the press release is attached as an Exhibit
99.1.
I. Letter to Shareholders and Creditors of AWT.
On August 3, 2003, the Company issued a letter to the shareholders and
creditors of AWT regarding the Company's plans for AWT. A copy of this letter is
attached as Exhibit 99.2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: none
(c) Exhibits:
Exhibit No. Description
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3.1 Amended and Restated Certificate of Designation of Series and
Determination of Rights and Preferences of Series C Preferred
Stock
10.1 Credit Agreement dated as of June 17, 2004 by and between the
Company and Stanford Venture Capital Holding Inc. and related
$1,000,000 Note
10.2 Credit Agreement dated as of June 17, 2004 by and between the
Company and Stanford Venture Capital Holding Inc. and related
$3,000,000 Note
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10.3 Instrument of Re-Pricing dated as of June 17, 2004 by and
between the Company and Stanford Venture Capital Holding Inc.
10.4 Warrant Purchase Agreement dated as of June 17, 2004 by and
between the Company and Stanford Venture Capital Holding Inc.
10.5 Registration Rights Agreement dated as of June 17, 2004 by and
between the Company and Stanford Venture Capital Holding Inc.
99.1 Press Release dated August 3, 2004
99.2 Letter dated August 3, 2004 from the Company to the
Shareholders and Creditors of AWT
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.
Dated: August 3, 2004
AMERICAN LEISURE HOLDINGS, INC.
l/s L. William Chiles
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L. William Chiles
Chairman of the Board
l/s Malcolm J. Wright
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Malcolm J. Wright
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT
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3.1 Amended and Restated Certificate of Designation of Series and
Determination of Rights and Preferences of Series C Preferred
Stock
10.1 Credit Agreement dated as of June 17, 2004 by and between the
Company and Stanford Venture Capital Holding Inc. and related
$1,000,000 Note
10.2 Credit Agreement dated as of June 17, 2004 by and between the
Company and Stanford Venture Capital Holding Inc. and related
$3,000,000 Note
10.3 Instrument of Re-Pricing dated as of June 17, 2004 by and
between the Company and Stanford Venture Capital Holding Inc.
10.4 Warrant Purchase Agreement dated as of June 17, 2004 by and
between the Company and Stanford Venture Capital Holding Inc.
10.5 Registration Rights Agreement dated as of June 17, 2004 by and
between the Company and Stanford Venture Capital Holding Inc.
99.1 Press Release dated August 3, 2004
99.2 Letter dated August 3, 2004 from the Company to the
Shareholders and Creditors of AWT
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