SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 1 to
Form 8-K
on
FORM 8-K/A
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 8, 2001
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GBI CAPITAL MANAGEMENT CORP.
(Exact Name of Registrant as Specified in Charter)
Florida 1-15799 65-0701248
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
1055 Stewart Avenue, Bethpage, New York 11714
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (516) 470-1000
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Items 1 and 2. Changes in Control of Registrant and Acquisition or Disposition
of Assets
On April 25, 2001, GBI Capital Management Corp. ("Company") entered
into an amendment to the previously reported Stock Purchase Agreement ("Purchase
Agreement") with New Valley Corporation ("New Valley"), Ladenburg, Thalmann
Group Inc. ("LTGI"), Berliner Effektengesellschaft AG ("Berliner") and
Ladenburg, Thalmann & Co. Inc. ("Ladenburg") and an amendment to the previously
reported Loan Agreement ("Loan Agreement") with Frost-Nevada, Limited
Partnership ("Frost-Nevada").
As a result of the transactions contemplated by the Purchase Agreement,
Loan Agreement and the related transactions ("Stock Purchase Transactions"), New
Valley, Berliner and Frost-Nevada would have beneficially owned approximately
53.9%, 11.6% and 14.9%, respectively, of the Company's common stock ("GBI
Stock") on and after the closing ("Closing Date") of the Stock Purchase
Transactions, assuming conversion by the parties of the full amount of the
senior convertible promissory notes ("Notes") to be issued to each party and
including shares of GBI Stock that were previously owned by Frost-Nevada.
The Purchase Agreement had provided for an adjustment, in certain
situations, of the purchase price ("Purchase Price Adjustment") to be paid by
the Company for the common stock of Ladenburg ("Ladenburg Stock"). The amendment
to the Purchase Agreement, among other things, replaces the existing Purchase
Price Adjustment. Under the new adjustment provision, the number of shares of
GBI Stock that the Company will be required to issue to New Valley and Berliner
will be adjusted ("Stock Adjustment") based on the respective changes in the
total stockholder equities of the Company and Ladenburg through the end of the
calendar month immediately preceding the month in which the Closing Date occurs.
The amendment to the Purchase Agreement also provides for the
conversion price of the Notes to be issued to New Valley and Berliner ("Sellers'
Notes") to be adjusted in the same manner as the adjustment in the number of
shares of GBI Stock. However, the conversion price of the Sellers' Notes will
not be decreased below a price that would result in a total number of additional
shares of GBI Stock being issuable upon conversion of the Sellers' Notes, when
added to the additional shares of GBI Stock being issued to New Valley and
Berliner as a result of the Stock Adjustment, exceeding 80% of the sum (such sum
being referred to as the "Total Additional Shares") of:
o the total number of additional shares to be issued and to be
issuable to New Valley and Berliner as provided for in the new
adjustment provision contained in the amendment to the
Purchase Agreement; and
o the number of additional shares of GBI Stock issuable to
Frost-Nevada as a result of the amendment to the Loan
Agreement described below.
The amendment to the Loan Agreement provides for an adjustment in the
conversion price of the Note that will be issued to Frost-Nevada ("Frost Note")
similar to the adjustment provided for in the amendment to the Purchase
Agreement. However, the adjustment provision in the amendment to the Loan
Agreement provides that if the conversion price, after adjustment as set forth
in the Loan Amendment, would not yield a number of shares of GBI Stock equal to
at least the sum of 5,000,000 shares of GBI Stock and 20% of the Total
Additional Shares, the conversion price of the Frost Note will be further
adjusted so that Frost-Nevada, upon conversion of the Frost Note, will receive
such sum of 5,000,000 shares of GBI Stock and 20% of the Total Additional
Shares.
Under the new adjustment provisions, based on what the Company
anticipates the respective stockholder equities of the Company and Ladenburg to
be on April 30, 2001, the Company will be required to issue approximately:
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o 2,595,747 additional shares of GBI Stock to LTGI and 644,886
additional shares of GBI Stock to Berliner;
o 491,016 additional shares of GBI Stock to LTGI and 121,988
additional shares of GBI Stock to Berliner upon conversion of
the Sellers' Notes, each at a conversion price of $2.2426
reduced from the original conversion price of $2.60; and
o 963,409 additional shares of GBI Stock upon conversion of the
Frost Note, at a conversion price of $1.6769 reduced from the
original conversion price of $2.00.
Accordingly, based on these estimates, New Valley, Berliner and Frost-Nevada
will beneficially own approximately 56.3%, 12.5% and 15.6%, respectively, of the
Company's common stock on and after the Closing Date. Therefore, as a result of
the issuance of the additional 4,817,046 shares of GBI Stock, the total increase
in these three parties' beneficial ownership of GBI Stock will increase by
approximately 4.0%. However, these figures are based on estimates rather than
actual figures that will be used and the Company may be required to issue a
greater or lesser number of shares of GBI Stock than is currently anticipated.
Change in Closing Conditions
The amendment to the Purchase Agreement also removes the requirement
that the American Stock Exchange ("Exchange") approve the Stock Purchase
Transactions. Although the Company believes that it will obtain approval by the
Exchange, there is no assurance that such approval will be obtained by the
Closing Date. If the Company is unable to obtain approval by the Exchange, the
Company's common stock will be listed on the OTC Bulletin Board.
Additionally, the amendment to the Purchase Agreement provides that the
Company will reimburse New Valley for its out-of-pocket expenses incurred in
connection with the Purchase Agreement and the related transactions. As of the
date of this Current Report, New Valley and Berliner estimate that they will
incur combined expenses of approximately $400,000 through the Closing Date.
Updated Fairness Opinion
In connection with the amendment to the Purchase Agreement, Roth
Capital Partners, LLC, financial advisor to the Company with regard to the
Purchase Agreement, delivered a new opinion to the Company's board of directors
stating that the consideration the Company will pay in exchange for the
Ladenburg Stock, as set forth in the Purchase Agreement and amended by the
Amendment, is fair to the Company's shareholders from a financial point of view.
The Company's Board of Directors relied on Roth Capital Partners' opinion in
reaching its decision to approve the Amendment and the Purchase Agreement and
the related transactions.
Changes in management after the Closing Date
In connection with the amendments to the Purchase Agreement and Loan
Agreement, David Thalheim, the Company's Administrator, will resign from his
position with the Company effective as of the Closing Date. The resignation
agreement provides, among other things, for the Company to pay Mr. Thalheim
$1,000 for two years from the Closing Date and to continue to maintain life,
disability, medical and dental insurance plans on his behalf. Additionally, the
Company will grant Mr. Thalheim a ten-year option to purchase 100,000 shares of
GBI Stock on the Closing Date at the same price as the option to be granted to
Mr. Victor Rivas on such date.
As a result of the amendments, the Company adjourned its annual meeting
of shareholders from April 18 to May 7. The closing of the Purchase Agreement is
expected to occur on that date.
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Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
(c) Exhibits
Exhibit
Number Description
4.1 Amendment No. 1 to the Stock Purchase Agreement, dated February 8,
2001, by and among the Company, New Valley Corporation, Ladenburg,
Thalmann Group Inc., Berliner Effektengesellschaft AG and Ladenburg,
Thalmann & Co. Inc.
4.2 Form of amended Senior Convertible Promissory Note to be issued to
Ladenburg, Thalmann Group Inc. and Berliner Effektengesellshaft AG
4.3 Form of amended Senior Convertible Promissor Note to be issued to
Frost-Nevada, Limited Partnership
10.1 Amendment No. 1 to the Loan Agreement, dated as of February 8, 2001,
between the Company and Frost-Nevada, Limited Partnership
10.2 Second Amendment to the Employment Agreement, dated August 24, 1999,
between GBI Capital Partners Inc. and David Thalheim
99.1 Press Release dated April 26, 2001
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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: April 30, 2001 GBI Capital Management Corp.
By: /s/ Richard J. Rosenstock
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Name: Richard J. Rosenstock
Title: President and Chief Operating
Officer
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