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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earlier event reported): AUGUST 24, 1999
GBI CAPITAL MANAGEMENT CORP.
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(Exact Name of Registrant as Specified in Charter)
FLORIDA 0-22265 65-0701248
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(State of Incorporation (Commission File No.) (IRS Identification
or other Jurisdiction) Number)
1055 Stewart Avenue
BETHPAGE, NEW YORK 11714
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(Address of Principal Executive Offices) (Zip Code)
(516) 470-1000
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(Registrant's Telephone Number Including Area Code)
Frost Hanna Capital Group, Inc.
327 PLAZA REAL, SUITE 319, BOCA RATON, FLORIDA 33432
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On August 24, 1999, GBI Capital Management Corp., formerly Frost Hanna
Capital Group, Inc. (the "Registrant"), consummated a merger (the "Merger")
pursuant to which FHGB Acquisition Corporation, a New York corporation and
wholly-owned subsidiary of the Registrant ("FHGB"), merged with and into Gaines,
Berland Inc., a New York corporation ("Gaines Berland"). The Merger was effected
pursuant to the terms of an Agreement and Plan of Merger, dated as of May 27,
1999, among the Registrant, FHGB, Gaines Berland, GBI Trading Corp., a New York
corporation and wholly-owned subsidiary of Gaines Berland ("GBI"), and Gaines
Berland Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of
Gaines Berland ("Holdings") (the "Merger Agreement").
As a result of the Merger, Gaines Berland became a wholly-owned subsidiary
of the Registrant and each share of Gaines Berland common stock issued and
outstanding immediately prior to the Merger was canceled and converted into the
right to receive 21,917 shares of the Registrant's common stock, $.0001 par
value per share (the "Common Stock"), resulting in the former Gaines Berland
shareholders collectively owning 15,999,410 shares of Common Stock, or
approximately 85% of the total issued and outstanding shares. Joseph Berland,
Richard J. Rosenstock, Mark Zeitchick, Vincent Mangone and David Thalheim,
principal shareholders of Gaines Berland immediately prior to the Merger,
received in the aggregate 12,426,939 shares of Common Stock, or approximately
66%.
Upon consummation of the Merger, all of the officers and directors of the
Registrant resigned and Messrs. Berland, Rosenstock, Zeitchick, and Mangone and
Steven A. Rosen and Benjamin D. Pelton were elected directors of the Registrant,
and the following persons were elected to the following offices: Mr. Berland,
Chairman of the Board and Chief Executive Officer; Mr. Rosenstock, President and
Chief Operating Officer; Mr. Zeitchick, Executive Vice President; Mr. Mangone,
Executive Vice President; and Diane Chillemi, Chief Financial Officer.
In connection with the Merger, the Registrant amended its Articles of
Incorporation to change its name to "GBI Capital Management Corp." and to
provide for an authorized class of blank check preferred stock consisting of
2,000,000 shares, par value $.0001 per share (the "Preferred Stock").
As a result of the Merger, the Registrant, through its direct and indirect
wholly-owned subsidiaries, operates a full service securities brokerage and
trading firm providing personalized investment advice and service to individual
and institutional investors throughout the world.
The Registrant's common stock continues to trade on the NASD OTC market,
under its new symbol "GBIC."
For additional information regarding the Merger, see the Merger Agreement
which was included as an exhibit to both the Registrant's Current Report on Form
8-K dated May
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27, 1999 and the Registrant's Proxy Statement filed with the Commission on July
30, 1999.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Merger is described in Item 1. above.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On September 3, 1999, Registrant notified Arthur Andersen LLP, the
independent accounting firm previously engaged as the principal accountant to
audit the Registrant's financial statements, of its dismissal. Such principal
accountant's report on the Registrant's financial statements for each of the
past two years did not contain an adverse opinion or a disclaimer of opinion,
and was not qualified or modified as to uncertainty, audit scope, or accounting
principles. The decision to change accountants was approved by the Board of
Directors of the Registrant. During the Registrant's two most recent fiscal
years and any subsequent interim period preceding such dismissal there were no
disagreements with the former accountant on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of the former
accountant, would have caused it to make reference to the subject matter of the
disagreements in connection with its report.
The following statements apply to the Registrant's two most recent fiscal
years and any subsequent interim period preceding the former accountant's
dismissal (each of the described events is hereinafter referred to as a
"reportable event"):
(A) The former accountant did not advise the Registrant that the internal
controls necessary for the Registrant to develop reliable financial statements
do not exist;
(B) The former accountant did not advise the Registrant that information
had come to the accountant's attention that led it to no longer be able to rely
on management's representations, or that made it unwilling to be associated with
the financial statements prepared by management;
(C) The former accountant did not advise the Registrant of the need to
expand significantly the scope of its audit, or that information had come to the
accountant's attention during such time period that if further investigated may
(i) materially impact the fairness or reliability of either: a previously issued
audit report or the underlying financial statements; or the financial statements
issued or to be issued covering the fiscal period(s) subsequent to the date of
the most recent financial statements covered by an audit report (including
information that may prevent it from rendering an unqualified audit on those
financial statements), or (ii) cause it to be unwilling to rely on management's
representations or be associated with the Registrant's financial statements; and
(D)(1) The former accountant did not advise the Registrant that
information had come to the accountant's attention that it had concluded
materially impacts the fairness or
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reliability of either (i) a previously issued audit report or the underlying
financial statements, or (ii) the financial statements issued or to be issued
covering the fiscal period(s) subsequent to the date of the most recent
financial statements covered by an audit report (including information that,
unless resolved to the accountant's satisfaction, would prevent it from
rendering an unqualified audit report on those financial statements).
On September 3, 1999, Registrant engaged Goldstein Golub Kessler LLP, a
new independent accountant, as the principal accountant to audit the
Registrant's financial statements. During the Registrant's two most recent
fiscal years, and any subsequent interim period prior to engaging that
accountant, neither the Registrant nor anyone on its behalf consulted the newly
engaged accountant regarding either: (i) the application of accounting
principles to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Registrant's financial
statements; or (ii) any matter that was either the subject of a disagreement or
a reportable event. Goldstein Golub Kessler LLP audited the financial statements
of Gaines Berland in connection with the Merger.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
This Report includes the following financial statements of Gaines
Berland, all of which are incorporated by reference to the financial statements
of Business to be Acquired, Gaines Berland, Inc., included on Pages F-23 through
F-34, inclusive, of Registrant's Proxy Statement, Schedule 14A filed with the
Commission on July 30, 1999 (the "Proxy Statement"):
Independent Auditor's Report (Goldstein Golub Kessler LLP)
Independent Auditor's Report (Lerner, Sipkin & Company)
Statements of Financial Condition as of August 31, 1998 and 1997 and
May 31, 1999 (unaudited)
Statements of Income for the years ended August 31, 1998 and 1997
and the nine months ended May 31, 1999 and 1998 (unaudited)
Statements of Changes in Stockholders' Equity for the three years
ended August 31, 1998
Statements of Changes in Stockholders' Equity for the nine months
ended May 31, 1999 (unaudited)
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Statements of Cash Flows for the years ended August 31, 1998 and
1997 and the nine months ended May 31, 1999 (unaudited)
Notes to Financial Statements
(b) PRO FORMA FINANCIAL INFORMATION.
This Report includes the following Pro Forma financial information
relating to Gaines Berland, all of which is incorporated by reference to the Pro
Forma Combined Condensed Financial Information included on Pages P-2 through
P-6, inclusive, of the Proxy Statement:
Introduction to Unaudited Pro Forma Combined Condensed Financial
Information
Unaudited Pro Forma Combined Condensed Balance Sheet as of March 31,
1999
Unaudited Pro Forma Combined Condensed Statement Of Operations for
the three month period ended March 31, 1999
Unaudited Pro Forma Combined Condensed Statement of Operations for
the year ended December 31, 1998
Notes to Unaudited Pro Forma Combined Condensed Financial
Information
(c) EXHIBITS:
2(a) Agreement and Plan of Merger, dated as of May 27, 1999, among
Frost Hanna Capital Group, Inc., FHGB Acquisition Corporation,
Gaines, Berland Inc., GBI Trading Corp., and Gaines Berland
Holdings, Inc., incorporated by reference to Exhibit A to the
Proxy Statement.
16 Letter of Arthur Andersen LLP re: Change in Certifying
Accountant
99 Press Release of Registrant, dated August 24, 1999, announcing
consummation of the Merger
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ITEM 8. CHANGE IN FISCAL YEAR
On September 3, 1999, the Registrant determined to change its fiscal year
from the calendar year to September 30. The fiscal year end for Gaines Berland
was August 31.
The Registrant will file an Annual Report on Form 10-K covering the period
from September 1, 1998 through August 24, 1999, which will be considered a
transition report. The Registrant also will file a Quarterly Report on Form 10-Q
covering the period from August 25, 1999 through September 30, 1999.
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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.
GBI CAPITAL MANAGEMENT CORP.
By: /s/ JOSEPH BERLAND
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Name: Joseph Berland
Title: Chairman of the Board,
Chief Executive Officer
Dated: September 7, 1999
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Exhibit 16
[LETTERHEAD OF ARTHUR ANDERSEN]
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Arthur Andersen LLP
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September 8, 1999 Suite 1700
Phillips Point-West Tower
Office of the Chief Accountant 777 South Flagler Drive
Securities and Exchange Commission West Palm Beach FL 33401
450 Fifth Street, N.W. 561 832 8100
Washington, D.C. 20549
Dear Madame:
We have read the first two paragraphs of Item 4 included in the Form 8-K
dated August 24, 1999 of GBI Capital Management Corp. to be filed with the
Securities and Exchange Commission and are in agreement with the statements
contained therein.
Very truly yours,
/s/ Arthur Andersen LLP
Copy to:
Diane Chillerni, Chief Financial Officer, GBI Capital Management Corp.
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Exhibit 99
GAINES, BERLAND INC. AND
FROST HANNA CAPITAL GROUP, INC.
CONSUMMATE MERGER
Bethpage, New York, August 24, 1999 -- Gaines, Berland Inc. and Frost Hanna
Capital Group, Inc. (OTC Bulletin Board: FHAN) today announced the consummation
of a merger that provided Gaines, Berland with approximately $4.5 million in
cash, and resulted in Gaines, Berland becoming a wholly-owned subsidiary of the
publicly-traded Frost Hanna. The shareholders of Gaines, Berland received
newly-issued shares of the common stock of Frost Hanna, aggregating
approximately 85% of the total outstanding common stock, and Frost Hanna has
changed its name to GBI Capital Management Corp. The new trading symbol for the
Company's shares of common stock on the OTC Bulletin Board will be "GBIC." The
Company's shares will begin trading under such new symbol on Wednesday, August
25, 1999.
Gaines, Berland is a full service securities brokerage and trading firm
providing personalized investment advice and service to individual and
institutional investors throughout the world.
For further information, please contact Richard J. Rosenstock, President
of the Company at (516) 470-1101.
