CHERRY HILL FOODS TO SELL STOCK. Cherry Hill Foods, Inc., 1739 Country Club Drive, Cherry Hill, N.J. 08034 filed a registration statement (File 2-31252) with the SEC on December 30 seeking registration of 200,000 shares of common stock, to be offered for public sale at $2.50 per share. The offering is to be made on a “best efforts” basis by Contes & Company, 30-96 42nd St, Long Island City, N. Y. 11103, for which it will receive a commission of 30¢ per share plus $15,000 for expenses. The company has agreed to sell to the underwriter, for $200, six-year warrants to purchase 20,000 shares, exercisable after one year at $2.50 per share. The company was organized on December 18; on December 27 it acquired all of the outstanding stock of Shooster’s Inc., and is engaged in the marketing of specialty frozen foods under the brand name, “Shooster’s”. Of the net
proceeds from its stock sale, the company will use $6,849 for repayment of a loan from Herman Shooster, its presi- dent, and $12,500 for repayment of a bank loan guaranteed by him; $50,000 will be used for advertising and marketing and $100,000 for acquisition of addition inventories; and the balance will be added to general funds of the company and used for working capital purposes, including a $30,000 per year salary for Shooster. The company now has outstanding 520,000 shares, of which 270,000 were issued to Shooster for the outstanding stock of Shooster’s Inc. (which had a net worth of $6,330), and 250,000 were issued to Henry C. Malon, vice president, for a cash consideration of $5,000. Purchasers of the stock being registered will acquire a 27.8% stock interest in the company for an investment of $500,000; Shooster and Malon will then own 72.2%, for an investment of $11,330, or an average price of 2¢ per share.
Securities and Exchange Commission, Jan. 8th, 1969 Cherry Hill Foods becomes effective
giving us an S-1 designation, as compared to a Regulation A limited offering. 27.8% of the company was offered for a 1/2 mil., which, today, seems like a small sum. Not in 1967 [4 mil- 2021]. It was a lot of money. Watching this unfold was thrilling. I had public partners and with them came sophistication and investment. The primary partners were Hank and me with a declared value of a little over 72% of the company. With a solid offering, we ended up with over 1/2 million dollars in the bank. It seemed like we were well on our way to creating something of value for everyone. Meanwhile, treachery was lurking near- by. Hank called while we were celebrating the news. He said, “ Herman, in order not to get caught in a short position, the underwrit- ers are allowed an over-allotment of stock beyond what had been agreed to be sold. The buffer was 10%. They called me and said they
demanded the additional shares. The company will receive the additional funds, but they will own the shares.” They had us over a barrel. Reluctantly, we agreed. I knew it was really a form of black- mail, and I thought it was also illegal, but fighting was not a good plan either. I needed to focus on all the positive energy I could muster to make this business successful. I wasn’t going to start day one with a legal problem. In the end, it didn’t matter. The stock market collapsed soon after we went public. In that climate, you couldn’t give stock away. At least we were flush with capital. But since we could no longer trade our stock for ownership of another company, we had to resort to expanding the sales of our original products. I was worried. I knew this would not be enough. To achieve success, we needed the sales plus a rising stock market to help cover the additional expenses that are
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