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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.3___________)*
JETRONIC INDUSTRIES, INC.
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(Name of Issuer)
COMMON
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(Title of Class of Securities)
477178108
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(CUSIP Number)
Robert L. Gipson c/o Ingalls & Snyder LLC 61 Broadway, New York, NY 10006
(212) 269-7827
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 4, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement of Schedule 13G to report
the acquisition which is the subject of the Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [X].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
<PAGE>
CUSIP No. 477178108 Schedule 13D Page 2 of 7 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert L. Gipson ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF;WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK STATE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 361,231 shares owned directly by Mr. Gipson
OWNED BY
8 SHARED VOTING POWER
EACH
REPORTING 218,533 shares owned by Ingalls and Snyder Value Partners,
L.P. (ISVP). Robert L. Gipson is a General Partner of ISVP.
(Assuming exercise of the preferred stock warrants and the
subsequent conversion of the preferred stock into common
stock as more fully described in Item 4)
PERSON 9 SOLE DISPOSITIVE POWER
WITH
361,231 directly owned by Mr. Gipson
10 SHARED DISPOSITIVE POWER
218,533 directly owned by ISVP (See Item 8)-------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
579,764 including shares owned by ISVP (See Item 8)---------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.2% (Based on 3,824,499 shares outstanding as of October 31, 1997
pursuant to the Company's Form 10Q for the period ended October 31, 1997
and assuming the issue of 220,000 shares of common stock issuable pursuant
to the conversions described in Item 8, above.)
14 TYPE OF REPORTING PERSON*
IN------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 477178108 Schedule 13D Page 3 of 7 Pages
Item 1. Security and Issuer
(a) Title of Class of Equity Securities: Common
(b) Name and Address of Issuer's Jetronic Industries, Inc.
Principal Executive Offices: 4200 Mitchell Street
Philadelphia, PA 19128
Item 2. Identity and Background
(a) Name: Robert L. Gipson
(b) Business Address: 61 Broadway
New York, NY 10006
(c) (1)Present Occupation:
Stockbroker and a Managing Director of Ingalls & Snyder LLC, a
registered broker-dealer. Mr. Gipson (Gipson)is a general partner of and
holds a limited partnership interest in Ingalls & Snyder Value Partners L.P.
(ISVP), a New York Limited Partnership. ISVP beneficially owns 218,533 shares.
(Assuming exercise of the preferred stock warrants and the subsequent
conversion of the preferred stock into common stock as more fully described
in Item 4. Gipson may be deemed to be the beneficial owner of the ISVP shares.
(d) Criminal Proceedings: N/A
(e) Securities Law Proceedings: N/A
(f) Citizenship or State of Organization: USA
Item 3. Source and Amount of Funds or Other Consideration
(a)Source: Personal Funds (Gipson)
Working Capital (ISVP)
(b)Amount: $34,135.38- (Gipson)
$32,743.00- (ISVP)
Item 4. Purpose of Transaction
As of the date of this filing, Gipson beneficially owns the shares of
common stock reported in Item 5(a) for investment purposes. Pursuant to an
agreement between Jetronic, on the one hand, and certain holders of the 10%
debentures due 12/21/99,(principally ISVP), on the other hand, the holders have
given Jetronic the option to retire all of the debentures and deferred interest
at a discount to face value until May 15, 1998, in exchange for Jetronic
issuing to the holders 220,000 warrants to acquire a share of preferred stock
with an exercise price of $.10 per warrant. The preferred stock holders have
the right to elect 50% of a reconstituted board of directors. In addition,
the preferred stock is convertible into the common stock of Jetronic on a share
for share basis. In the event that Jetronic does not retire the debenture by
May 15, 1998 the company will issue an additional 220,000 warrants to the
debenture holders. If Jetronic does retire the debentures prior to May 15,
1998 the company has the option to call the warrants at a price of $1 per
warrant.
Item 5. Interest in Securities of the Issuer
(a) (1)A total of 579,764 shares, represented by 361,231 shares directly
owned by Gipson. Gipson is a general partner of (and holds a limited
partnership interest in ISVP) and, therefore, may be deemed to be the beneficial
ownerof the ISVP shares.
(2) 15.2%(based on 3,824,499 shares outstanding as of October 31, 1997
pursuant to the company's Form 10Q for the period ended October 31, 1997.
Assuming the ISVP ownership specified in 5(a)(1)and the issuance of 220,000
common shares as described in Item 4.
(b) (1)Sole Power to vote or direct the vote:
361,231 directly owned shares.
(2)Shared power to vote or direct the vote:
218,533 directly owned by ISVP. Gipson may be deemed to share voting power
with Thomas O. Boucher, Jr. and ISVP. Mr. Boucher is a stockbroker, a general
partner of ISVP and a Managing Director of Ingalls & Snyder LLC. He is a U.S.
citizen. The name and address of his employer is Ingalls & Snyder LLC,
61 Broadway, New York, NY 10006, and its principal business is stock
brokerage. ISVP is an investment partnership organized in New York.
Its principal business and office is 61 Broadway, New York, NY 10006.
Items 2(d) and 2(e) are answered in the negative with respect to Mr. Boucher
and ISVP, respectively.
(3)Sole power to dispose or direct the disposition:
361,231 directly owned shares.
<PAGE>
CUSIP No. 477178108 Schedule 13D Page 4 of 7 Pages
(4)Shared power to dispose or direct the disposition:
218,533 directly owned by ISVP. (Assuming exercise of the preferred stock
warrants and the subsequent conversion of the preferred stock into common
stock as more fully described in Item 4). Gipson may be deemed to share
dispositive power with Ingalls & Snyder LLC, a registered broker-dealer and
a New York Limited Liability Co. of which Gipson is a Managing Director.
Ingalls & Snyder's principal business and office is set forth in Item 5(b)(2).
Items 2(d) and 2(e) are answered in the negative with respect to Ingalls &
Snyder LLC.
(c) Ingalls & Snyder Value Partners, L.P.
(1) July 7, 1994
(2) Bought 65,286 Restricted Common
(3) $.50 per share
(4) Agency cross (Section 4(1/2)( Transaction by
Ingalls & Snyder, 61 Broadway, New York, NY 10006
(d) Yes
(e) Not Applicable
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
(a) Article 11 of the Agreement of Limited Partnership of ISVP, dated as of
December 15, 1992, provides that Messrs. Boucher and Gipson, as general
partners of ISVP, are authorized and empowered to vote securities held by
ISVP. Incorporated herein by reference see item 7 below.
(b) The Subordinated Debenture Agreement Dated May 4, 1998. Attached as Exhibit
2.
Item 7. Material to be Filed as Exhibits
Exhibit 1( Relevant portions of the partnership agreement for Ingalls & Snyder
Value Partners L.P. Incorporated by reference to Mr. Gipson's Amendment No.
1 to his previously filed 13D on Jetronic Industries, July 7, 1994.
Exhibit 2- Jetronic Subordinated Debenture Agreement dated May 4,1998
Attached.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date:
/Robert L. Gipson/---------------
Signature
--Robert L. Gipson----------------
Name/Title
<PAGE>
CUSIP No. 477178108 Exhibit 2 to Schedule 13D Page 5 of 7 Pages
SUBORDINATED DEBENTURE AGREEMENT
AGREEMENT, made this 4th day of May, 1998, by and between JETRONIC
INDUSTRIES, INC., a corporation duly organized and existing under the laws
of the Commonwealth of Pennsylvania, with offices located at 4200 Mitchell
Street, Philadelphia, Pennsylvania 19128 (hereinafter referred to as the
"Company") and the undersigned holders of the Company's ten year 10%
convertible Subordinated Debentures and 15 year 14.5% convertible subordinated
Debentures due December 21, 1999 (the "Debentures"). Such undersigned holders
of the 10% and 14.5% Debentures are hereinafter sometimes referred to
collectively as the "Holders").
W I T N E S S E T H
WHEREAS, as at the date hereof there are $3,856,000 principal amount of
Debentures outstanding each bearing interest at the rate of 10% per annum; and
WHEREAS, paragraph 16 of the Debentures provides that each such Debenture
may be amended, and any obligations of the company or rights of the holder of
each such Debenture may be waived, by the written consent of the holders of
two-thirds of the principal amount of all of the Debentures then outstanding;
and
WHEREAS, Holders hold in excess of two-thirds of the principal amount of
the Debentures; and
WHEREAS, as at May 15, 1998, there will be due to the debentureholders
$1,426,206.95 on account of interest deferred and accrued interest under and
pursuant to agreements entered into on July 31, 1992 and May 24, 1995
(hereinafter referred to as the "Deferred Interest"); and
WHEREAS, there is also due to certain debentureholders interest on the
Debentures which remains unpaid in addition to and not included in Deferred
Interest (hereinafter referred to as the "Unpaid Interest").
WHEREAS, the Company desires to amend the Debentures, and obtain other
agreements relating thereto and the Holders are willing and agree to consent
to the same.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Company shall have the right, at any time through May 15, 1998 to
pay all, but not less than all of the unpaid principal amount of the Debentures
and Deferred Interest plus any interest accrued on Deferred Interest through
the date of such payment by payment in cash of 80% of the total of the unpaid
principal balance of the Debentures, the Deferred, Interest and accrued
interest on such amounts to the date of payment and by payment of 100% of any
Unpaid interest. Such payment shall be made in full satisfaction of the
principal balance, Deferred Interest and accrued interest thereon and
allocated first to the payment of principal then to the payment of interest
and then to the payment of Deferred Interest until such funds are exhausted.
2. In consideration of the Holders' agreements contained herein, the
company shall issue to the Debentureholders contemporaneouslY with the
execution of this agreement, warrants for 220,000 shares of the Company's
preferred stock, no par value which shall be in turn convertible on ten days
prior written notice to the Company, into a like amount of shares of the
Company's common stock, par value $.l0 per share. The warrants shall be in
the form of Exhibit A to this agreement, with an exercise price of $.10 per
share for a period of five years. In the event that the Company shal1 be
unable to satisfy the unpaid principal balance of the Debentures, the Deferred
Interest and accrued interest thereon by May 15, 1998, as set forth in
paragraph 1 hereof, the Company shall issue to the Debentureholders warrants
for an additional 220,000 shares of the Company's preferred stock, no par
value which shall be in turn convertible on ten days' prior written notice to
the Company, into a like amount of shares of the Company's common stock, par
value $.lO per share in the form of Exhibit A to this agreement, with an
exercise price of $.l0 per share for a period of five years (the "warrants").
3. Provided that Company's obligations set forth in paragraph 1 hereof
have been fully satisfied, the Company shall have the right, until May 26,
1998, to call the Warrants for a price of $1 per share, which call may be
exercised at any time upon ten days' prior written notice to the holders
thereof.
4. In the event that the Company shall fail to make payment of the
principal balances, the Deferred Interest and accrued interest thereon and the
Unpaid Interestas provided in paragraph 1 hereof, on or before May 15, 1998,
the due date of the Debentures shall automatically be extended until
January 1, 2003.Similarly, the Company's obligation to pay Deferred Interest
and interest accrued thereon shall be extended until January 1, 2003, with the
understanding and agreement that (a) commencing July 31, 1998, the Company
shall pay interest at the rate of 10% per annum on the Deferred Interest with
each installment of interest due on the Debentures, and (b) that the Company
shall issue a new debenture to the debentureholders reflecting the Deterred
interest and accrued interest thereon due May 15, 1998.
<PAGE>
CUSIP No. 477178108 Exhibit 2 to Schedule 13D Page 6 of 7 Pages
5. In the event that the due date for the Debentures and Deferred Interest
is extended to January 1, 2003, the Company shall be and become obligated to
make payments on account of the unpaid principal balance of the Debentures as
follows: $150,000 on December 31, 1999, $250,000 on December 31, 2000,
$350,000 on December 31, 2001 and $450,000 on December 31, 2002, which
obligations may be satisfied by purchase or redemption of Debentures.
6. The preferred stock to be issued upon exercise of the Warrants shall
enable preferred shareholders voting as a class, to elect three members of
the Board of Directors of the Company. Upon receipt of notice of exercise of
the Warrants, the Board of Directors of the Company shall within thirty days
after receipt of such notice, take such steps as are necessary or required to
establish a six member Board of Directors, three members of which shall be
elected by the preferred shareholders voting as a class. The preferred
shareholders shall retain the right to elect three members of the Board of
Directors of the Company so long as any shares of such preferred stock remain
issued and outstanding. The remaining three members of the Board of Directors
shall be nominated by management of the Company. In the event that any
director elected to the Board is unable to serve or resigns, the preferred
shareholders and the management of the Company agree to replace such director
so that at all times the Board of Directors shall be constituted by three
members elected by the preferred shareholders and three members nominated by
management of the Company. Upon payment in full of the Debentures, the
Deferred Interest and all interest accrued thereon the Company shall have
the right on thirty days' prior written notice to call any and all then
outstanding shares of preferred stock for a price of $1 per share.
7. In consideration of the rights granted to the holders of the
Debentures herein contained, the holders hereby agree that during the period
from the date hereof through January 1, 2003, they will not acquire any
additional shares of common stock of the Company without the written permission
of a majority of the Company's Board of Directors, except in connection with
exercise of the Warrants. The Holders additionally agree to vote their shares
of preferred stock of the Company as may be necessary or required to implement
the purposes of this agreement.
8. The Company has agreed that effective with the interest payment on the
Debentures due April 30, l998, all debentureholders shall receive interest on
a timely basis and the Company will use its best efforts, consistent with its
cash flow requirements, during the period from the date hereof and December
31, 1998 to bring all outstanding Debentures up to an equivalent status,
curing any failures to pay interest on a timely basis and issue common stock
in good negotiable form as required.
9. The Company also represents and warrants to the Holders that since
January 31, 1997, there have been no material changes in employment contracts,
management options, securities outstanding or management compensation except
that in March 1997, the Company issued warrants for 65,000 shares in
connection with the acquisition of PGS Computers, Ltd. and the Company is in
the process or issuing warrants for 37,500 shares in partial settlement of a
pending litigation. Until such time as the Holders Board of representatives
are seated, the Company agrees that it will make no material changes in
employment contracts, management options, securities outstanding or management
compensation.
10. The Holders and the Company each represent and warrant to the other that
all action necessary to authorize the execution and delivery of this agreement
has been taken, and that this agreement, when executed and delivered, will
constitute the legal, valid and binding obligations of the Holders on one hand
and the Company on the other in accordance with its terms.
11. Except as modified and amended by this agreement, the terms of the
Debentures and the May 24, 1995 agreement relating thereto shall continue in
full force and effect in accordance with their respective terms.
12. If the Company defaults in the performance of any of its obligations
hereunder and fails to cure such default within thirty days after written
notice from the Holders, an Event of Default shall be deemed to have occurred
under the Debentures and any amendments thereto.
13. This agreement may be executed in any number of counterparts, and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
14. In the event that any one or more of the provisions contained herein or the
application thereof in any circumstances is held invalid, illegal or
unenforceable, the validity, legality and enforceability of such provision in
every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
<PAGE>
CUSIP No. 477178108 Exhibit 2 to Schedule 13D Page 7 of 7 Pages
IN WITNESS WHEREOF, the parties hereto have executed this agreement the day and
year first above written.
JETRONIC INDUSTRIES, INC.
By: /Peter Kursman/
President, Jetronic Industries Inc.
Ingalls & Snyder Value Partners L.P.
By /Thomas O. Boucher, Jr./
Thomas O. Boucher, Jr.
General Partner
By: /J. Michael Kadick/
J. Michael Kadick
(120496DTI)
