As filed with the Securities and Exchange Commission on June 25,
2004.
UNITED STATES
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
Date of Report (Date of earliest event reported):
June 23, 2004
Shells Seafood Restaurants, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-28258 65-0427966
(State or other (Commission (IRS employer
jurisdiction of file number) identification
incorporation) No.)
16313 N. Dale Mabry Hwy, Ste 100, Tampa, FL 33618
(Address of principal executive offices)
Registrant's telephone number, including area code:
(813) 961-0944
Not Applicable
(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant
The Company has been notified that on June 23, 2004, GCM Shells
Seafood Partners, LLC ("GCM"), a Delaware limited liability
company, and Trinad Capital, L.P. ("Trinad"), a Delaware limited
partnership, purchased the $1,000,000 promissory note issued by
the Company to Shells Investment Partners, LLC ("SIP")on January
31, 2002 as part of the Company's $2,000,000 financing; and that
the note was purchased with the working capital of each entity
in the amount of $400,000 and $600,000 for GCM and Trinad,
respectively. The Company refinanced deferred interest of
$165,315.07 on the $1 million note, previously scheduled to be
payable to SIP in full on January 31, 2005, through a note which
calls for 24 equal monthly payments beginning June 1, 2005.
This deferred interest note is secured by a second mortgage on
certain real estate owned by the Company.
In connection with the $2 million financing transaction in
January 2002, we issued to each of SIP and Banyon a warrant to
purchase 4,454,015 shares of Common Stock at an exercise price
of $0.16 per share. The warrants are exercisable through
January 31, 2005. SIP has retained the rights with respect to
10% (445,400 shares) of its warrants. The remaining portion of
the SIP warrant was reissued to Galloway Capital Management, LLC
for 668,103 shares, GCM for 1,068,964 shares, Trinad for
1,603,445 shares, and Atlantis Equities, Inc. for 668,103
shares.
In connection with the $2 million financing transaction, we also
granted Banyon and SIP a security interest in certain of our
property and entered into an Investor Rights Agreement with
SIP, Banyon and certain other stockholders. SIP's rights to a
security interest and under the Investor Rights Agreement have
been transferred to GCM and Trinad in conjunction with the
purchase by GCM and Trinad of the $1 million note on June 23,
2004. The Investor Rights Agreement, among other things, fixes
the composition of the Board at seven members, subject to
certain requirements, and provided each of Banyon and SIP with
the right to nominate three individuals to serve on the Board.
Banyon, SIP (now GCM and Trinad) and the other stockholders
parties to the Investor Rights Agreement have agreed to vote
their respective shares for the election as directors of the
other's nominees. As part of the transfer by SIP to GCM and
Trinad, we have received and accepted the resignation of J.
Stephen Gardner, John N. Giordano and Thomas R. Newkirk (SIP's
designees) as members of our Board of Directors and have elected
Robert S. Ellin, Jay A. Wolf and Gary Herman (the board nominees
of GCM and Trinad) to our Board, to fill these three vacancies.
Based, in part, on filings made with the Securities and Exchange
Commission (primarily the Schedule 13D for the June 23, 2004
transaction), the beneficial ownership of the new directors and
warrant holders is as follows:
Director Name of Stock Warrants Total Beneficial Percent
or Officer Beneficial Owner Ownership Exercisable Ownership Amount of Class
---------- ----------------------- --------- ----------- ---------------- ---------
Director Robert Ellin 1,603,445 1,603,445 25.55%
Director Gary Herman 1,737,067 1,737,067 27.11%
Director Jay Wolf 1,603,445 1,603,445 25.55%
Nancy Ellin 668,103 668,103 12.51%
Bruce Galloway 281,000 1,737,067 2,018,067 31.49%
Irwin Gross 1,603,445 1,603,445 25.55%
Atlantis Equities, Inc. 668,103 668,103 12.51%
GCM Shells Seafood
Partners, LL 1,068,964 1,068,964 18.62%
Galloway Capital
Management, LLC 668,103 668,103 12.51%
Trinad Advisors GP, LLC 1,603,445 1,603,445 25.55%
Trinad Capital, L.P. 1,603,445 1,603,445 25.55%
Total Class 281,000 4,008,615 4,289,615 49.42%
The "total beneficial ownership amount" and "percent of class"
each were calculated based on the assumed conversion with
respect to each such person (or total class) of the warrants
exercisable by that person (or total class) and, in the case of
"percent of class", based on 4,671,375 shares of common stock
outstanding as of March 28, 2004, our most recently ended
quarter.
Item 7. Financial Statements and Exhibits
(c) Exhibits
10.01 Securities Purchase Agreement dated June 23, 2004
between Shells Investment Partners, LLC and
GCM Shells Seafood Partners, LLC and Trinad Capital, LP
10.02 Secured Senior Note in the aggregate principal
amount of $400,000 issued to GCM Shells Seafood
Partners, LLC on June 21, 2004.
10.03 Secured Senior Note in the aggregate principal
amount of $600,000 issued to Trinad Capital, LP
on June 21, 2004.
10.04 Warrant to purchase 668,103 shares of Common
Stock of Shells Seafood Restaurants, Inc., issued
to Galloway Capital Management, LLC
10.05 Warrant to purchase 1,068,964 shares of Common
Stock of Shells Seafood Restaurants, Inc., issued
to GCM Shells Seafood Partners, LLC
10.06 Warrant to purchase 1,603,445 shares of Common
Stock of Shells Seafood Restaurants, Inc., issued
to Trinad Capital, LP
10.07 Warrant to purchase 668,103 shares of Common
Stock of Shells Seafood Restaurants, Inc., issued
to Atlantis Equities, Inc.
10.08 Warrant to purchase 445,400 shares of Common
Stock of Shells Seafood Restaurants, Inc., issued
to Shells Investment Partners, LLC
10.09 Promissory Note in the aggregate principal amount
of $165,315.07 issued to Shells Investment
Partners, L.L.C.
10.10 Mortgage and Security Agreement in the aggregate
principal amount of $165,315.07 issued to Shells
Investment Partners, L.L.C.
99.1 Press release dated June 25, 2004.
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: June 25, 2004 SHELLS SEAFOOD RESTAURANTS, INC.
By: /s/ Leslie J. Christon
President
Chief Executive Officer