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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Hawaiian Holdings, Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
419879101
--------------------------------------------------------------------------------
(CUSIP Number)
Erin C. Ross
Watershed Asset Management, L.L.C.
One Maritime Plaza, Suite 1525
San Francisco, California 94111
(415) 391-8900
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 10, 2007
--------------------------------------------------------------------------------
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 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 the
disclosures provided in a prior cover page.
The information required in 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).
(Continued on following pages)
Page 1 of 17 Pages
13D
===================
CUSIP No. 419879101
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Watershed Capital Partners, L.P.
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing hold an
aggregate of 2,233,902 Shares, which is 4.7% of the
class of securities. The reporting person on this
cover page, however, may be deemed a beneficial owner
only of the securities reported by it on this cover
page. [See Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
WC, OO
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 385,218 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
385,218 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
385,218 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.8% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
PN
------------====================================================================
Page 2 of 17 Pages
13D
===================
CUSIP No. 419879101
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Watershed Capital Institutional Partners, L.P.
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing hold an
aggregate of 2,233,902 Shares, which is 4.7% of the
class of securities. The reporting person on this
cover page, however, may be deemed a beneficial owner
only of the securities reported by it on this cover
page. [See Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
WC
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 1,341,422 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
1,341,422 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,341,422 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.8% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
PN
------------====================================================================
Page 3 of 17 Pages
13D
===================
CUSIP No. 419879101
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
WCIP Cayman, Ltd.
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing hold an
aggregate of 2,233,902 Shares, which is 4.7% of the
class of securities. The reporting person on this
cover page, however, is a beneficial owner only of
the securities reported by it on this cover page.
[See Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
WC, OO
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Cayman Islands
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 71,500 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
71,500 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
71,500 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.2% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
OO
------------====================================================================
Page 4 of 17 Pages
13D
===================
CUSIP No. 419879101
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Watershed Asset Management, L.L.C.
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing hold an
aggregate of 2,233,902 Shares, which is 4.7% of the
class of securities. The reporting person on this
cover page, however, may be deemed a beneficial owner
only of the securities reported by it on this cover
page. [See Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
AF
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 2,233,902 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
2,233,902 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,233,902 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
4.7% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
OO
------------====================================================================
Page 5 of 17 Pages
13D
===================
CUSIP No. 419879101
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
WS Partners, L.L.C.
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing hold an
aggregate of 2,233,902 Shares, which is 4.7% of the
class of securities. The reporting person on this
cover page, however, may be deemed a beneficial owner
only of the securities reported by it on this cover
page. [See Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
AF
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 1,726,640 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
1,726,640 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,726,640 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
3.6% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
OO
------------====================================================================
Page 6 of 17 Pages
13D
===================
CUSIP No. 419879101
===================
------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Meridee A. Moore
------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]**
2
** The reporting persons making this filing hold an
aggregate of 2,233,902 Shares, which is 4.7% of the
class of securities. The reporting person on this
cover page, however, may be deemed a beneficial owner
only of the securities reported by it on this cover
page. [See Preliminary Note]
------------====================================================================
3 SEC USE ONLY
------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
AF
------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
------------====================================================================
SOLE VOTING POWER
7
NUMBER OF -0-
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 2,233,902 [See Preliminary Note]
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
2,233,902 [See Preliminary Note]
------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,233,902 [See Preliminary Note]
------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions)
[ ]
------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
4.7% [See Preliminary Note]
------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
IN
------------====================================================================
Page 7 of 17 Pages
This Amendment No. 2 to Schedule 13D amends the Schedule 13D initially
filed on December 12, 2005 (collectively, with all amendments thereto, the
"Schedule 13D").
Preliminary Note: The Reporting Persons (as defined in the prior
Schedule 13D) are filing this Schedule 13D with respect to shares of common
stock, par value $0.01 per share (the "Shares"), of Hawaiian Holdings, Inc. (the
"Company"). Certain of the Reporting Persons own, in aggregate, (i) 1,292,489
Shares, (ii) Warrants (the "Warrants") to purchase 725,896 Shares (which
Warrants were reported in the prior Schedule 13D) and (iii) certain warrants
(the "Trade Warrants") issued by the Company to purchase an aggregate of 215,517
Shares. Each Warrant has an exercise price of $7.20, subject to adjustment from
time to time, and is immediately exercisable, subject to the terms of the
exercise cap described in Item 6 below. Each Warrant can be exercised through
and including June 1, 2010. Each Trade Warrant has an exercise price of $5.00
per Share, subject to adjustment from time to time, is immediately exercisable
and has an expiration date of March 13, 2009. For additional information
regarding the Warrants and the Trade Warrants, see Item 6 below.
Unless stated otherwise, all numbers and percentages contained in this
Schedule 13D represent Shares currently held by certain Reporting Persons and
all Shares that would be issued to certain Reporting Persons assuming full
exercise of the Warrants and the Trade Warrants, and such numbers and
percentages do not otherwise reflect the Warrants or the Trade Warrants.
Item 3. Source And Amount Of Funds And Other Consideration
------ --------------------------------------------------
Item 3 of the Schedule 13D is amended and supplemented by the
following:
Even though this Schedule 13D reports a net decrease in the Reporting
Person's beneficial ownership of Shares, since the filing of the prior Schedule
13D, the Funds and Watershed Offshore acquired 371,300 Shares through
open-market purchases (the "Open Market Shares") as well as the Trade Warrants
to purchase 215,517 Shares.
The investment cost (including commissions) for the Open Market Shares
acquired by each of the Funds and Watershed Offshore since the filing of the
prior Schedule 13D is set forth below:
Entity Shares Acquired Approximate
------ --------------- ---------------
Investment Cost
---------------
WCP 162,400 $689,847.65
WCIP 0 $0.00
WCIP Cayman 0 $0.00
Watershed Offshore 208,900 $887,902.65
The consideration for such acquisitions was obtained as follows: (i)
with respect to WCP, WCIP Cayman and Watershed Offshore, from working capital
and/or borrowings pursuant to margin accounts maintained in the ordinary course
of business by WCP, WCIP Cayman and Watershed Offshore at Goldman, Sachs & Co.
and (ii) with respect to WCIP, from working capital. WCP, WCIP Cayman and
Watershed Offshore hold certain securities in their respective margin
Page 8 of 17 Pages
accounts at Goldman, Sachs & Co., and the accounts may from time to time have
debit balances. It is not possible to determine the amount of borrowings, if
any, used to acquire the Open Market Shares and/or Trade Warrants.
Item 4. Purpose Of The Transaction
------ --------------------------
Item 4 of the Schedule 13D is amended and updated as follows:
The purpose of the acquisitions of the Shares, Warrants and Trade
Warrants is for investment, and the acquisitions of the Shares, Warrants and/or
Trade Warrants by each of the Funds and Watershed Offshore were made in the
ordinary course of business and were not made for the purpose of acquiring
control of the Company.
Although no Reporting Person has any specific plan or proposal to
acquire or dispose of Shares, Warrants and/or Trade Warrants, consistent with
its investment purpose, each Reporting Person at any time and from time to time
may acquire additional Shares, Warrants and/or Trade Warrants or dispose of any
or all of its Shares, Warrants and/or Trade Warrants depending upon an ongoing
evaluation of the investment in such securities, prevailing market conditions,
other investment opportunities, liquidity requirements of the Reporting Person
and/or other investment considerations. No Reporting Person has made a
determination regarding a maximum or minimum number of Shares, Warrants and/or
Trade Warrants which it may hold at any point in time.
Also, consistent with their investment intent and in an effort to
maximize shareholder value, the Reporting Persons may engage in communications
with one or more shareholders of the Company, one or more officers of the
Company, one or more members of the board of directors of the Company, potential
investors in the Company and/or other persons regarding the Company, including
but not limited to its operations.
For information regarding the Warrants and the Trade Warrants, see Item
6 below.
Except to the extent the information stated in this Item 4 may be
deemed a plan or proposal, none of the Reporting Persons has any plans or
proposals which relate to, or could result in, any of the matters referred to in
paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule
13D. The Reporting Persons may, at any time and from time to time, review or
reconsider their position and/or change their purpose and/or formulate plans or
proposals with respect thereto.
Item 5. Interest In Securities Of The Issuer
------ ------------------------------------
Item 5 of the Schedule 13D is amended and restated in its entirety as
follows:
(a) The Funds
---------
(a),(b) The information set forth in Rows 7 through 13 of the
cover page hereto for each Fund is incorporated
herein by reference for each such Fund. The
percentage amount set forth in Row 13 for all cover
pages filed herewith is
Page 9 of 17 Pages
calculated based upon the 46,553,914 Shares
outstanding as of October 31, 2006, as reported by
the Company in its Quarterly Report on Form 10-Q for
the period ended September 30, 2006 and filed with
the Securities and Exchange Commission on November 3,
2006, plus the number of additional Shares each
Reporting Person is deemed to own through its
beneficial ownership of Warrants and Trade Warrants.
(c) The trade dates, number of Shares purchased or sold
and the price per Share for all purchases and sales
of the Shares by the Funds in the past 60 days are
set forth on Schedules A-B hereto and are
incorporated herein by reference. All of such
transactions were open-market transactions. No
transactions by WCIP Cayman have been consummated in
the past 60 days.
(d) The General Partner has the power to direct the
receipt of dividends relating to, or the disposition
of the proceeds of the sale of, all of the Shares,
Warrants and Trade Warrants held by WCP and WCIP as
reported herein. WCIP is the sole shareholder of WCIP
Cayman. The Management Company, as an investment
adviser, has the power to direct the receipt of
dividends relating to, or the disposition of the
proceeds of the sale of, all of the Shares, Warrants
and Trade Warrants held by the Funds as reported
herein. The Individual Reporting Person is the Senior
Managing Member of the General Partner and the
Management Company.
(e) As of January 10, 2007, the Reporting Persons are no
longer deemed the beneficial owners of 5% or more of
the Shares.
(b) The Management Company
----------------------
(a),(b) The information set forth in Rows 7 through 13 of the
cover page hereto for the Management Company is
incorporated herein by reference.
(c) The trade dates, number of Shares purchased or sold
and the price per Share for all purchases and sales
of the Shares by the Management Company on behalf of
Watershed Offshore in the past 60 days are set forth
on Schedule C hereto and are incorporated herein by
reference. All of such transactions were open-market
transactions.
For information regarding transactions by the
Management Company on behalf of the Funds, see Item
5(a) above.
(d) The Management Company, as an investment adviser, has
the power to direct the receipt of dividends relating
to, or the disposition of the proceeds of the sale
of, all of the Shares, Warrants and Trade Warrants
held by Watershed Offshore and the Funds as reported
herein. The General Partner has the power to direct
the receipt of dividends relating to, or the
disposition of the proceeds of the sale of, all of
the Shares, Warrants and Trade Warrants
Page 10 of 17 Pages
held by WCP and WCIP as reported herein. WCIP is the
sole shareholder of WCIP Cayman. The Individual
Reporting Person is the Senior Managing Member of the
Management Company.
(e) As of January 10, 2007, the Reporting Persons are no
longer deemed the beneficial owners of 5% or more of
the Shares.
(c) The General Partner
-------------------
(a),(b) The information set forth in Rows 7 through 13 of the
cover page hereto for the General Partner is
incorporated herein by reference.
(c) None.
(d) The General Partner has the power to direct the
receipt of dividends relating to, or the disposition
of the proceeds of the sale of, all of the Shares,
Warrants and Trade Warrants held by WCP and WCIP as
reported herein. WCIP is the sole shareholder of WCIP
Cayman. The Management Company, as an investment
adviser, has the power to direct the receipt of
dividends relating to, or the disposition of the
proceeds of the sale of, all of the Shares, Warrants,
and Trade Warrants held by the Funds as reported
herein. The Individual Reporting Person is the Senior
Managing Member of the General Partner and the
Management Company.
(e) As of January 10, 2007, the Reporting Persons are no
longer deemed the beneficial owners of 5% or more of
the Shares.
(d) The Individual Reporting Person
--------------------------------
(a),(b) The information set forth in Rows 7 through 13 of the
cover page hereto for the Individual Reporting Person
is incorporated herein by reference for the
Individual Reporting Person.
(c) None.
(d) The General Partner has the power to direct the
receipt of dividends relating to, or the disposition
of the proceeds of the sale of, all of the Shares,
Warrants and Trade Warrants held by WCP and WCIP as
reported herein. WCIP is the sole shareholder of WCIP
Cayman. The Management Company, as an investment
adviser, has the power to direct the receipt of
dividends relating to, or the disposition of the
proceeds of the sale of, all the Shares, Warrants and
Trade Warrants held by Watershed Offshore and the
Funds as reported herein. The Individual Reporting
Person is the Senior Managing Member of the General
Partner and the Management Company.
Page 11 of 17 Pages
(e) As of January 10, 2007, the Reporting Persons are no
longer deemed the beneficial owners of 5% or more of
the Shares.
The Shares reported hereby for WCP and WCIP Cayman are beneficially
owned by such Funds (in each case through their direct ownership of Shares,
Warrants and Trade Warrants). Of the Shares reported hereby for WCIP, 1,269,922
Shares are beneficially owned directly by WCIP (through its direct ownership of
Shares, Warrants and Trade Warrants) and the remaining 71,500 Shares are
beneficially owned directly by WCIP Cayman. WCIP, as the sole shareholder of
WCIP Cayman, may be deemed to be the beneficial owner of all such Shares owned
by WCIP Cayman. WCIP hereby disclaims any beneficial ownership of any such
Shares owned directly by WCIP Cayman. The Shares reported hereby by the
Management Company on behalf of Watershed Offshore are beneficially owned by
Watershed Offshore (through its direct ownership of Shares, Warrants and Trade
Warrants). The General Partner, as general partner to WCP and WCIP, may be
deemed to be the beneficial owner of all such Shares beneficially owned by WCP
and WCIP (in each case through their direct and indirect ownership of Shares,
Warrants and Trade Warrants). The Management Company, as investment adviser to
Watershed Offshore and the Funds, may be deemed to be the beneficial owner of
all such Shares beneficially owned by Watershed Offshore and the Funds. The
Individual Reporting Person, as the Senior Managing Member of both the General
Partner and the Management Company, may be deemed to be the beneficial owner of
all such Shares beneficially owned by the Funds and Watershed Offshore. Each of
the Management Company, the General Partner and the Individual Reporting Person
hereby disclaims any beneficial ownership of any such Shares.
Item 6. Contracts, Arrangements, Understandings Or Relationships With
-------------------------------------------------------------
Respect To Securities Of The Issuer
-----------------------------------
Item 6 of the Schedule 13D is amended and updated as follows:
As described in the Preliminary Note, WCP, WCIP and Watershed Offshore
purchased Trade Warrants issued by the Company to purchase in aggregate 215,517
Shares. Each Trade Warrant has an exercise price of $5.00 per Share, subject to
adjustment from time to time, is immediately exercisable and has an expiration
date of March 13, 2009. As a result of the purchase of the Trade Warrants, the
Reporting Persons are deemed to beneficially own an additional 215,517 Shares.
The Reporting Persons had reported in the prior Schedule 13D that they had
entered into an agreement to purchase the Trade Warrants but had not yet
consummated such transaction. The description above of the Trade Warrants is
qualified in its entirety by the full terms and conditions of the Trade
Warrants, which are incorporated herein by reference. For the full terms and
conditions of the Trade Warrants, see Exhibit 10.03 to the Form 8-K filed by the
Company with the Securities and Exchange Commission on March 17, 2006.
As described in the Preliminary Note, WCP, WCIP and Watershed Offshore
own in aggregate Warrants to purchase 725,896 Shares. Each Warrant has an
exercise price of $7.20, subject to adjustment from time to time, and is
immediately exercisable, subject to a cap (which may be waived by the holder
upon 65 days' notice) that would prevent the holder of the Warrants from
acquiring the underlying Shares to the extent that such acquisition would cause
such holder, or any other persons who are deemed to beneficially own any Shares
beneficially owned by such
Page 12 of 17 Pages
holder, to beneficially own in aggregate more than 9.999% of the total number of
issued and outstanding Shares (including Shares that would be issuable upon the
exercise of the Warrants). Each Warrant can be exercised through and including
June 1, 2010. The description above of the Warrants is qualified in its entirety
by the full terms and conditions of the Warrants, which are incorporated herein
by reference. For the full terms and conditions of the Warrants, see Exhibit 5
to the prior Schedule 13D.
Other than the Warrants, the RC LLC Agreement (as defined in the prior
Schedule 13D), the Trade Warrants and as otherwise described in the Schedule
13D, there are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the Reporting Persons or between such persons and any
other person with respect to any securities of the Company, including but not
limited to the transfer or voting of any securities of the Company, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, divisions of profits or loss, or the giving or withholding of proxies.
Page 13 of 17 Pages
SIGNATURES
----------
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: January 11, 2007
/s/ Meridee A. Moore
----------------------------------------
WS PARTNERS, L.L.C.,
On its own behalf and
As the General Partner of
WATERSHED CAPITAL PARTNERS, L.P.
and WATERSHED CAPITAL INSTITUTIONAL PARTNERS, L.P.
By Meridee A. Moore,
Senior Managing Member
/s/ Meridee A. Moore
----------------------------------------
WATERSHED ASSET MANAGEMENT, L.L.C.
On its own behalf and on behalf of
WCIP CAYMAN, LTD.
By Meridee A. Moore,
Senior Managing Member
/s/ Meridee A. Moore
----------------------------------------
Meridee A. Moore
Page 14 of 17 Pages
SCHEDULE A
-----------
WATERSHED CAPITAL PARTNERS, L.P.
--------------------------------
NO. OF SHARES PRICE
TRADE DATE PURCHASED (P) OR SOLD (S) PER SHARE ($)
----------- ------------------------- -------------
12/15/06 1,800 (S) 5.25
12/18/06 8,100 (S) 5.25
12/19/06 29,600 (S) 5.07
12/20/06 1,400 (S) 5.13
12/21/06 900 (S) 5.11
12/26/06 3,900 (S) 5.00
12/27/06 8,000 (S) 5.00
12/28/06 400 (S) 4.96
1/8/07 600 (S) 5.00
1/9/07 37,500 (S) 5.00
1/9/07 887 (S) 5.00
1/10/07 261,700 (S) 5.00
Page 15 of 17 Pages
SCHEDULE B
----------
WATERSHED CAPITAL INSTITUTIONAL PARTNERS, L.P.
----------------------------------------------
NO. OF SHARES PRICE
TRADE DATE PURCHASED (P) OR SOLD (S) PER SHARE ($)
----------- ------------------------- -------------
12/13/06 50,000 (S) 4.90
12/14/06 200,000 (S) 5.15
12/15/06 5,100 (S) 5.25
12/18/06 21,900 (S) 5.25
12/19/06 80,900 (S) 5.07
12/20/06 3,700 (S) 5.13
12/21/06 2,400 (S) 5.11
12/26/06 10,500 (S) 5.00
12/27/06 21,900 (S) 5.00
12/28/06 1,200 (S) 4.96
1/8/07 1,600 (S) 5.00
1/9/07 102,500 (S) 5.00
1/9/07 2,300 (S) 5.00
1/10/07 714,400 (S) 5.00
Page 16 of 17 Pages
SCHEDULE C
----------
WATERSHED ASSET MANAGEMENT, L.L.C.
----------------------------------
The transactions listed below were effected solely on behalf of Watershed
Offshore. For transactions on behalf of WCP and WCIP, see Schedules A and B,
respectively.
NO. OF SHARES PRICE
TRADE DATE PURCHASED (P) OR SOLD (S) PER SHARE ($)
----------- ------------------------- -------------
12/15/06 2,500 (S) 5.25
12/18/06 10,700 (S) 5.25
12/19/06 39,500 (S) 5.07
12/20/06 1,800 (S) 5.13
12/21/06 1,200 (S) 5.11
12/26/06 5,100 (S) 5.00
12/27/06 10,700 (S) 5.00
12/28/06 600 (S) 4.96
1/8/07 800 (S) 5.00
1/9/07 50,000 (S) 5.00
1/9/07 1,100 (S) 5.00
1/10/07 348,900 (S) 5.00
Page 17 of 17 Pages