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): May 30, 2014
GREAT AMERICAN GROUP, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-54010 | 27-0223495 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
|
21860 Burbank Boulevard, Suite 300 South Woodland Hills, California |
91367 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (818) 884-3737
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On June 5, 2014, Great American Group, Inc. (the “Company”) closed its previously announced private placement (the “Private Placement”) pursuant to which it issued and sold to 53 accredited investors (collectively, the “Investors”) an aggregate of 10,289,300 shares of the Company’s common stock (collectively, the “Private Placement Shares”) at a purchase price of $5.00 per share. The Private Placement was completed pursuant to the terms and provisions of a securities purchase agreement entered into among the Company and the Investors on May 19, 2014 (the “Purchase Agreement”).
At the closing of the Private Placement on June 5, 2014, the Company received aggregate gross proceeds of approximately $51.4 million. The Company used a portion of the net proceeds from the Private Placement to repay certain indebtedness in accordance with the Payoff Letters, as defined and described in Item 8.01 below, and expects to use all remaining net proceeds for working capital and general corporate purposes.
Effective as of the closing of the Private Placement, the Company entered into a registration rights agreement with the Investors (the “Registration Rights Agreement”) pursuant to which the Company is obligated, subject to certain conditions, to file with the Securities and Exchange Commission, within 45 days after the initial closing (the “First Closing”) under the Acquisition Agreement entered into on and filed as Exhibit 2.1 to the Company’s Form 8-K dated May 19, 2014 (the “Acquisition Agreement”), one or more registration statements to register the Private Placement Shares and certain shares of common stock to be issued as Acquisition Consideration (as defined in the Acquisition Agreement) at the First Closing (the “Acquisition Shares”) for resale under the Securities Act of 1933, as amended (the “Securities Act”), and to maintain the effectiveness of all such registration statements until the earlier of five years after the First Closing or such time as the Private Placement Shares and Acquisition Shares registered thereunder have been sold or become eligible for sale without restriction under Rule 144 promulgated under the Securities Act.
The issuance and sale of the Private Placement Shares has not been registered under the Securities Act, and the Private Placement Shares may not be offered or sold in the United States absent registration under or exemption from the Securities Act and any applicable state securities laws. The Private Placement Shares have been issued and sold in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act, based on the following facts: each of the Investors has represented that it is an accredited investor as defined in Rule 501 promulgated under the Securities Act, that it is acquiring the Private Placement Shares for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable securities laws and that it has sufficient investment experience to evaluate the risks of the investment; the Company used no advertising or general solicitation in connection with the issuance and sale of the Private Placement Shares to the Investors; and the Private Placement Shares will be issued as restricted securities. This Current Report on Form 8-K is not and shall not be deemed to be an offer to sell or the solicitation of an offer to buy any of the Private Placement Shares.
The foregoing description of the Purchase Agreement and Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of each document. Additional descriptions of the foregoing documents are contained in, and copies of the same are filed as exhibits to, the Current Report on Form 8-K filed by the Company on May 19, 2014 and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under the heading “Debt Repayment” under Item 8.01 is hereby incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 is hereby incorporated by reference into this Item 3.02.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth under the heading “Reverse Stock Split” under Item 8.01 is hereby incorporated by reference into this Item 3.03.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The information set forth under the heading “Reverse Stock Split” under Item 8.01 is hereby incorporated by reference into this Item 5.03.
Item 8.01 Other Events.
Reverse Stock Split
On May 30, 2014, the Company filed a Certificate of Amendment to its Certificate of Incorporation (the “Amendment”) to effect a 1-for-20 reverse stock split of its common stock (the “Reverse Stock Split”), effective as of 12:01 a.m. Eastern Time on June 3, 2014 (the “Effective Time”). As previously disclosed in (i) Item 5.07 of the Current Report on Form 8-K filed by the Company on May 13, 2014, the Company’s stockholders approved a proposal on May 12, 2014 authorizing the Company’s Board of Directors, in its discretion, to implement a reverse stock split of the Company’s issued and outstanding common stock at a ratio of not less than 1-for-10 and not more than 1-for-50 and (ii) Item 8.01 of the Current Report on Form 8-K filed by the Company on May 19, 2014, the Company’s Board of Directors approved the Reverse Stock Split on May 18, 2014 at a ratio of 1-for-20.
Pursuant to the Amendment, as of the Effective Time, every twenty shares of the Company’s pre-split common stock were automatically combined into one share of common stock. No fractional shares were issued as a result of the Reverse Stock Split, and holders of the Company’s common stock who otherwise would have been entitled to a fractional share will receive, in lieu thereof, a cash payment of $10.40 per share, which was the most recent closing price per share of the common stock on the Over-the-Counter Bulletin Board prior to the Effective Time (as adjusted for the Reverse Stock Split).
The Reverse Stock Split did not change the number of authorized shares of the Company’s common stock or alter the par value thereof. The new CUSIP number for the Company’s common stock following the Reverse Stock Split is 38984G 203.
A copy of the Amendment, as filed on May 30, 2014, is attached hereto as Exhibit 3.1 and is incorporated herein by reference.
Debt Repayment
On June 5, 2014, the Company completed its previously announced repayment of certain indebtedness (the “Debt Repayment”) in accordance with the terms of letter agreements (the “Payoff Letters”) entered into by the Company on May 19, 2014, and each of Andrew Gumaer, the Company’s Chief Executive Officer and Chairman, and Harvey Yellen, the Company’s President and Vice Chairman (collectively, the “Great American Members”). In connection with the Debt Repayment, the Company paid an aggregate of $30 million, plus accrued interest through June 5, 2014, to the Great American Members in exchange for the complete satisfaction of all amounts owed to the Great American Members pursuant to certain Subordinated Unsecured Promissory Notes, dated as of July 31, 2009, issued by the Company to such Great American Members, as amended, restated or modified from time to time (such notes, as amended, the “Notes”). Immediately prior to the repayment, the Notes had an aggregate face principal amount of $48.8 million. The Notes were originally issued to the Great American Members on July 31, 2009 in connection with (i) the contribution to the Company of all of the membership interests of Great American Group, LLC by the members thereof and (ii) the merger of Alternative Asset Management Acquisition Corp. with and into its wholly-owned subsidiary, AAMAC Merger Sub, Inc.
The foregoing description of the Payoff Letters does not purport to be complete and is qualified in its entirety by reference to the full text of each document. Additional descriptions of the foregoing documents are contained in, and copies of the same are filed as exhibits to, the Current Report on Form 8-K filed by the Company on May 19, 2014 and are incorporated herein by reference.
___________________
The Company’s press release announcing the closing of the Private Placement and the Debt Repayment and the completion of the Reverse Stock Split, issued on June 5, 2014, is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit No. |
Description | |
| 3.1 | Certificate of Amendment of the Certificate of Incorporation, dated as of May 30, 2014. | |
| 99.1 | Press Release dated June 5, 2014. |
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.
| June 5, 2014 | GREAT AMERICAN GROUP, INC. | |||
| By: | /s/ Phillip J. Ahn | |||
| Name: | Phillip J. Ahn | |||
| Title: | Chief Financial Officer | |||
Certificate of Amendment of the
Certificate of Incorporation of
Great American Group, Inc.,
a Delaware corporation
The undersigned hereby certifies that:
One: He is the duly elected and acting Chief Executive Officer of Great American Group, Inc., a Delaware corporation (the “Corporation”).
Two: The Certificate of Incorporation of the Corporation was originally filed in the Office of the Secretary of State of the State of Delaware on May 7, 2009.
Three: Article Four.A. of the Certificate of Incorporation of the Corporation shall be amended by deleting it in its entirety and substituting the following therefore:
“A. Capital Stock.
The total number of shares of capital stock which the Corporation shall have the authority to issue is One Hundred Forty-Five Million (145,000,000) shares, such shares being divided into One Hundred Thirty-Five Million (135,000,000) shares of common stock, par value $0.0001 per share (the “Common Stock”), and Ten Million (10,000,000) shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”). Upon the filing and effectiveness (the “Effective Time”) of this Certificate of Amendment of the Certificate of Incorporation pursuant to the Delaware General Corporation Law, each twenty (20) shares of Common Stock, that are issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock, par value $0.0001 per share, of the Corporation (the “Automatic Conversion”). No fractional shares shall be issued and, in lieu thereof, any holder of less than one share of Common Stock shall be entitled to receive cash for such holder’s fractional share based upon the fair market value of the Common Stock as of the Effective Time as determined by the Corporation’s Board of Directors. All numbers set forth in this Certificate of Incorporation give effect to the Automatic Conversion provided for above.
The following is a statement of the designations, preferences, privileges, qualifications, limitations, restrictions and the special or relative rights granted to or imposed upon shares of each class.”
Four: This amendment of the Certificate of Incorporation herein certified has been duly adopted by the Board of Directors and stockholders of the Corporation in accordance with the provisions of Sections 222 and 242 of the General Corporation Law of the State of Delaware.
Five: This amendment of the Certificate of Incorporation shall become effective as of June 3, 2014 at 12:01 a.m., Eastern Time.
[Remainder of Page Left Intentionally Blank]
In Witness Whereof, this Certificate of Amendment has been executed as of this 30th day of May, 2014.
| Great American Group, Inc. | ||
| By: | /s/ Andrew Gumaer | |
| Name: Andrew Gumaer | ||
| Title: Chairman and Chief Executive Officer | ||
[Signature Page to Certificate of Amendment]
Great American Group Closes $51.4 Million Private Placement
| · | 10.3 million shares of common stock issued in private placement |
| · | Approximately $30 million of proceeds used to retire $48.8 million of debt payable to Great American Group principals at a discount |
| · | Great American Group and B. Riley & Co. combination expected to close later in June |
Woodland Hills, Calif. (June 5, 2014) — Great American Group, Inc. (OTCBB: GAMR) (OTCBB: GAMRD) (“Great American Group”), a leading provider of asset disposition and financial advisory services, announced today the closing of its previously announced $51.4 million private placement offering through the sale of approximately 10.3 million shares of common stock.
Great American Group has also announced that it has completed the previously announced repayment of indebtedness owed to Great American Group founders, Mr. Andrew Gumaer and Mr. Harvey Yellen. Approximately $48.8 million in principal of outstanding promissory notes due to Messrs. Gumaer and Yellen was retired in full for an aggregate payment of approximately $30 million plus accrued interest. The repayment satisfies the outstanding principal and accrued interest obligations due to the Great American Group founders under such notes, and represents a 38 percent discount to the face amount of principal owed on the debt.
The previously announced combination with B. Riley & Co., LLC, a leading, full-service independent investment bank, is anticipated to close later this month. The stock-for-stock transaction will create a uniquely positioned investment banking and financial services firm with over 250 employees and a geographic footprint extending across the United States and Europe. The terms of the combination provide for the issuance of an estimated aggregate of 4.2 million shares of Great American Group common stock (subject to working capital adjustments) in exchange for 100 percent of the ownership interests of B. Riley. Upon consummation of the transaction, Mr. Bryant Riley will assume the role of Chairman of the Board and Chief Executive Officer of the combined company.
Earlier in the week, Great American Group announced a 1-for-20 reverse stock split which took effect June 3, 2014. The reverse stock split reduced the number of common shares outstanding at such time from approximately 30 million shares to approximately 1.5 million shares. Including the shares issued in the private placement, Great American Group currently has approximately 11.8 million shares outstanding. Great American Group’s common stock will continue to trade on the OTCBB. For the first 20 business days post-reverse split, the stock will trade under the symbol “GAMRD” before reverting back to ticker symbol “GAMR.”
Important Information for Investors
Effective as of the closing of the private placement, Great American Group entered into a registration rights agreement with the investors in the private placement pursuant to which Great American Group is obligated, subject to certain conditions, to file with the Securities and Exchange Commission one or more registration statements to register the private placement shares and certain shares of common stock to be issued in the initial closing of the combination with B. Riley for resale under the Securities Act of 1933, as amended (the “Securities Act”), and to maintain the effectiveness of all such registration statements until the earlier of five years thereafter or such time as the shares registered thereunder have been sold or become eligible for sale without restriction under Rule 144 promulgated under the Securities Act. The issuance and sale of the private placement shares has not been registered under the Securities Act, and the private placement shares may not be offered or sold in the United States absent registration under, or exemption from, the Securities Act and any applicable state securities laws.
About Great American Group, Inc. (OTCBB: GAMR) (OTCBB: GAMRD)
Great American Group is a leading provider of asset disposition and auction solutions, advisory and valuation services, capital investment, and real estate advisory services for an extensive array of companies. A trusted strategic partner at every stage of the business lifecycle, Great American Group efficiently deploys resources with sector expertise to assist companies, lenders, capital providers, private equity investors and professional service firms in maximizing the value of their assets. The company has in-depth experience within the retail, industrial, real estate, healthcare, energy and technology industries. The corporate headquarters is located in Woodland Hills, Calif. with additional offices in Atlanta, Boston, Charlotte, N.C., Chicago, Dallas, New York, Norwalk, Conn., San Francisco, London, Milan and Munich. For more information, call (818) 884-3737 or visit www.greatamerican.com.
Forward-Looking Statements
This press release may contain forward-looking statements by Great American Group that are not based on historical fact, including, without limitation, statements containing the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions and statements. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Such factors include those risks described from time to time in Great American Group's filings with the SEC, including, without limitation, the risks described in Great American Group's Annual Report on Form 10-K for the year ended December 31, 2013. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and Great American Group undertakes no duty to update this information.
Investor Contact
Great American Group
Phillip Ahn
Chief Financial Officer and Chief Operating Officer
(818) 884-3737
pahn@greatamerican.com
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