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U.S. 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: November 19, 1997
Commission File No.: 0-15934
JAY JACOBS, INC.
(Exact name of registrant as specified in its charter.)
WASHINGTON 91-0698077
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization.)
1530 FIFTH AVENUE, SEATTLE, WASHINGTON 98101
(Address of principal executive offices.)
(206) 622-5400
(Registrant's telephone number, including area code.)
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Item 5. Other Events.
On November 18, 1997, Jay Jacobs, Inc. (the "Company") issued a press release
announcing a new proposal for a recapitalization. Pursuant to a proposed letter
of intent received from Cahill, Warnock & Company, LLC ("Cahill"), Cahill and
certain other investors will provide equity financing in the amount of
$6,500,000 subject to several conditions including due diligence by Cahill and
the execution of definitive agreements. The anticipated closing date of this
transaction is December 3, 1997.
The recapitalization of the Company will occur on the anticipated closing date
and will involve the following aspects:
. Issuance of $4,000,000 of Series A Preferred Stock and $2,500,000 of Series B
Preferred Stock, which will rank senior to all classes of preferred and common
stock of the Company. The Series B Preferred Stock will be convertible into
common stock representing 87.5% of the common stock outstanding as of the
closing and subject to issuance upon conversion of the Series B Preferred
Stock.
. The payment of $1,500,000 in cash and the issuance of $1,000,000 of the
Company's common stock as payment in full for the approximately $2,500,000
still owed to pre-bankruptcy creditors. The proposed recapitalization will
require a change in the plan under which the Company emerged from bankruptcy
in November 1995. The Company has applied to the bankruptcy court for
approval of this change.
Rex Steffey and William L. Lawrence, Jr. will continue as Chief Executive
Officer and President, and Senior Vice President and Chief Financial Officer,
respectively. Both will be directors of the Company upon closing of the
recapitalization. Cahill will have the right to appoint a majority of the Board
of Directors.
In the press release, Rex Steffey said "We are very pleased that Cahill has
provided a letter of intent for the recapitalization of Jay Jacobs. Upon
closing, the recapitalization will strengthen our balance sheet, complete our
obligations under the Chapter 11 bankruptcy plan, and allow for the
implementation of our business plan including increasing our inventory to meet
the demand of our customers and opening new stores, beginning in the Spring of
1998."
If the Cahill proposed recapitalization closes as planned, the previously
announced recapitalization with Noari Capital Corporation will not be
consummated. The proposed letter of intent constitutes a proposal in principle
only and does not obligate either the Company or Cahill to consummate the
proposed reorganization.
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The press release and this Form 8-K contain certain forward-looking statements
within the meaning of Section 27E of the Securities Exchange Act of 1934, as
amended. Actual results could differ materially from those anticipated in the
forward-looking statements as a result of a variety of factors including, but
not limited to, the failure of the proposed recapitalization to close or a
material modification thereof.
SIGNATURE
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In accordance with the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
DATED: November 19, 1997 JAY JACOBS, INC.
BY: /s/ William L. Lawrence, Jr.
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William L. Lawrence, Jr.
(Principal Financial Officer)
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