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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Amendment No. 2
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED
PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(a)
PDK Labs Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
Common Stock: 693293508
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(CUSIP Number)
Robert H. Cohen, Esq.
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
(212) 735-8680
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
July 13, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and
is filing this schedule because of Rule 13d-1(b)(3)
or (4), check the following box . / /
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CUSIP
No.69329350813D
1 Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (Entities Only)
Reginald Spinello
2 Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3 SEC Use Only
4 Source of Funds* PF, OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization U.S.A.
7 Sole Voting Power
Number of 672,500 shares of Common Stock.
Shares
Beneficially 8 Shared Voting Power
Owned By 0 shares of Common Stock
Each
Reporting 9 Sole Dispositive Power
Person 522,500 shares of Common Stock
With
10 Shared Dispositive Power
0 shares of Common Stock
11 Aggregate Amount Beneficially Owned By Each Reporting Person
672,500 shares of Common Stock..
12 Check Box if the Aggregate Amount in Row (11) excludes Certain Shares*
/ /
13 Percent of Class Represented by Amount in Row (11)
29.2 % of Common Stock
14 Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP
No. 693293508 13D
2
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1 Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (Entities Only)
Raveendra Nandigam
2 Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3 SEC Use Only
4 Source of Funds* PF, OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization U.S.A.
7 Sole Voting Power
Number of 100,000 shares of Common Stock.
Shares
Beneficially 8 Shared Voting Power
Owned By 0 shares
Each
Reporting 9 Sole Dispositive Power
Person 100,000 shares of Common Stock.
With
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
100,000 shares of Common Stock.
12 Check Box if the Aggregate Amount in Row (11) excludes Certain Shares*
/ /
13 Percent of Class Represented by Amount in Row (11)
4.3% of Common Stock.
14 Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
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CUSIP
No. 693293508 13D
1 Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (Entities Only)
Karine Hollander
2 Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3 SEC Use Only
4 Source of Funds* PF, OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization U.S.A.
7 Sole Voting Power
Number of 0 shares.
Shares
Beneficially 8 Shared Voting Power
Owned By 0 shares
Each
Reporting 9 Sole Dispositive Power
Person 50,000 shares of Common Stock.
With
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
50,000 shares of Common Stock.
12 Check Box if the Aggregate Amount in Row (11) excludes Certain Shares*
/ /
13 Percent of Class Represented by Amount in Row (11)
2.2 % of Common Stock.
14 Type of Reporting Person*
IN
4
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CUSIP
No. 693293508 13D
1 Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (Entities Only)
Michael Lulkin
2 Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3 SEC Use Only
4 Source of Funds* PF, OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization U.S.A.
7 Sole Voting Power
Number of 0 shares.
Shares
Beneficially 8 Shared Voting Power
Owned By 0 shares
Each
Reporting 9 Sole Dispositive Power
Person 100,000 shares of Common Stock.
With
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned By Each Reporting Person
100,000 shares of Common Stock.
12 Check Box if the Aggregate Amount in Row (11) excludes Certain Shares*
/ /
13 Percent of Class Represented by Amount in Row (11)
4.3 % of Common Stock
14 Type of Reporting Person*
IN
5
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CUSIP
No.693293508 13D
1 Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (Entities Only)
PDK Acquisition Corp.
2 Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3 SEC Use Only
4 Source of Funds* WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) / /
6 Citizenship or Place of Organization New York
7 Sole Voting Power
Number of 200,000 shares of Common Stock.
Shares
Beneficially 8 Shared Voting Power
Owned By 0 shares of Common Stock
Each
Reporting 9 Sole Dispositive Power
Person 200,000 shares of Common Stock
With
10 Shared Dispositive Power
0 shares of Common Stock
11 Aggregate Amount Beneficially Owned By Each Reporting Person
200,000 shares of Common Stock..
12 Check Box if the Aggregate Amount in Row (11) excludes Certain Shares*
/ /
13 Percent of Class Represented by Amount in Row (11)
8.7% of Common Stock
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Item 1. Security and Issuer.
This Amendment No. 2 to Schedule 13D (the "Amendment No. 2") relates to
the Schedule 13D filed on July 21, 2000, as amended on September 19, 2000,
relating to shares of the Common Stock, par value $.01 per share (the "Common
Stock"), of PDK Labs Inc., a New York corporation (the "Company"). The Company's
principal executive office is at 145 Ricefield Lane, Hauppauge, NY 11788.
Item 2. Identity and Background.
(a)-(d)
Reginald Spinello
Chairman of the Board, President and Chief Executive Officer
PDK Labs Inc.
145 Ricefield Lane
Hauppauge, NY 11788
Raveendra Nandigam
Vice President of Operations
PDK Labs Inc.
145 Ricefield Lane
Hauppauge, NY 11788
Karine Hollander
Chief Financial Officer and Secretary
PDK Labs Inc.
145 Ricefield Lane
Hauppauge, NY 11788
Michael Lulkin
PDK Labs Inc.
145 Ricefield Lane
Hauppauge, NY 11788
PDK Acquisition Corp.
c/o PDK Labs Inc.
145 Ricefield Lane
Hauppauge, NY 11788
(e) During the last five years, none of the persons filing this
Schedule 13D have been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), except that Michael Lulkin, who is not a
Continuing Shareholder (as defined below) and, other than being a party to the
Lulkin Voting Trust Agreement, has no connection to the proposed transaction,
consented in July 1998 to four counts set forth in an information filed in the
Southern District, including counts
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for conspiracy to commit securities fraud, mail fraud, wire fraud, making false
statements, and money laundering.
(f) During the last five years, none of the persons filing this
Schedule 13D have been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction which resulted in that person
being subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, Federal or State
securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Reginald Spinello, Raveendra Nandigam, Karine Hollander and Michael
Lulkin (the "Reporting Persons") each acquired their shares of Common Stock
through the exercise of board approved stock grants in connection with
employment or consulting services rendered to the Company and/or, in the case of
Mr. Spinello, certain direct acquisitions of such shares using personal funds.
As more fully described in Item 4 of this Schedule 13D, Reginald
Spinello, Karine Hollander and Raveendra Nandigam (the "Continuing
Shareholders") have made a proposal (the "Proposal") to the Company pursuant to
which the Continuing Shareholders would acquire all of the outstanding shares of
Common Stock and Series A Convertible Preferred stock, par value $.01, of the
Company (the "Preferred Stock") not already owned by the Continuing Shareholders
(the "Acquisition"). The Proposal contemplates that current stockholders of the
Company (other than the Continuing Shareholders) would be paid $5.00 in cash for
each share of Common Stock held and $8.00 in cash for each share of Preferred
Stock held. The Continuing Shareholders expect that the funds to be used in
making the Acquisition will come from various sources, including institutional
lenders.
Item 4. Purpose of Transaction.
On July 13, 2000, Reginald Spinello transmitted a letter to the Board
of Directors of the Company proposing that the Continuing Shareholders acquire
all of the outstanding shares of Common Stock not owned by the Continuing
Shareholders at a price of $4.00 per share in cash and all of the outstanding
shares of Preferred Stock not owned by the Continuing Shareholders at a price of
$7.00 per share in cash. The Proposal proposed that the Acquisition would be
(i)structured as a merger of the Company with a Corporation to be formed by the
Continuing Shareholders and (ii) subject to the terms and conditions to be set
forth in a definitive merger agreement to be negotiated between the parties. The
Proposal proposed that the Acquisition would be subject to (i) approval of a
special committee of the Board of Directors of the Company consisting solely of
directors who are not affiliated with the Continuing Shareholders (the "Special
Committee"), (ii) approval of two-thirds of the shares of Common Stock at a
meeting called for such purpose and (iii) other customary conditions. It is
expected that, in the event the Acquisition is completed, the registration of
the Common Stock under Section 12 of the 1934 Act would be terminated, and the
Common Stock and Preferred Stock would cease to be listed on the NASDAQ or any
other inter-dealer quotation system.
From July 13, 2000 until July 19, 2000, the Continuing Shareholders
negotiated the terms of the Proposal with the Special Committee, consisting of
Ira Helman who is not a Continuing Shareholder. On July 19, 2000, the Continuing
Shareholders and the Special Committee reached an agreement that the Continuing
Shareholders acquire all of the outstanding shares of Common Stock
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not owned by the Continuing Shareholders at a price of $5.00 per share in cash
and all of the outstanding shares of Preferred Stock not owned by the Continuing
Shareholders at a price of $8.00 per share in cash. The Continuing Shareholders
have been informed that the Special Committee recommended the Proposal to the
Board of Directors and the Board of Directors has approved the Proposal which is
to be submitted for a shareholder vote on November 8, 2000. There can be no
assurance that the Proposal will be approved by the shareholders or that the
Acquisition will be completed.
One shareholder, Perry Krape, has asserted so-called "derivative"
claims on behalf of the Company in two separate lawsuits seeking damages from
various persons, including among others, the Reporting Persons and Ira Helman,
and/or the cancellation of a significant number of shares issued by the Company
to certain officers and consultants in past years, including the Reporting
Persons (other than Raveendra Nandigam). These suits are discussed in the
Company's prior public disclosures to which reference is made, including the
Company's Form 10Q filed on October 13, 2000. If the Proposal is approved and
the merger consummated, Krape (and all other shareholders) will likely lose the
ability to prosecute derivative claims and any remaining derivative actions will
likely be terminated as a matter of law. To the extent that the derivative
actions are terminated, the individuals sued in those actions, including the
Reporting Persons (other than Raveendra Nandigam) will, or course, no longer
face the possibility, no matter how remote, of exposure on the claims. For the
reasons previously stated in the Company's most recent Form 10-Q, the Reporting
Persons believe that the dismissal of the derivative actions is at best of
marginal benefit to them because they believe that the claims asserted therein
are meritless, and as such the Reporting Persons and Ira Helman did not consider
the possible dismissal of the derivative claims as a factor in the decision to
pursue or approve the Proposal.
Item 5. Interest in Securities of the Issuer.
(a) Reginald Spinello currently owns 522,500 shares of Common Stock,
constituting 22.7% of such shares and no shares of Preferred Stock. Reginald
Spinello has the right to vote an additional 150,000 shares of Common Stock
(constituting a total of 29.2% of such shares). Reginald Spinello acquired the
right to vote 50,000 such shares through a Voting Trust Agreement (the
"Hollander Voting Trust Agreement"), dated October 6, 1995, by and between
Corrine Hollander and Michael Krasnoff, as Voting Trustee, pursuant which
Corrine Hollander agreed that the President and CEO of the Company would have
the right to vote her shares for a period of ten years. Reginald Spinello
acquired the right to vote the remaining 100,000 of such shares through a Voting
Trust Agreement (the "Lulkin Voting Trust Agreement"), dated October 6, 1995, by
and between Michael Lulkin and Michael Krasnoff, as Voting Trustee, pursuant
which Michael Lulkin agreed that the President and CEO of the Company would have
the right to vote his shares for a period of ten years. Karine Hollander and
Michael Lulkin entered into the Voting Trust Agreements upon the commencement of
their employment with the Company and the issuance to them of their shares of
Common Stock. Michael Lulkin is not a Continuing Shareholder and, other than
being a party to the Lulkin Voting Trust Agreement, has no connection to the
proposed transaction. Raveendra Nandigam owns 100,000 shares of Common Stock,
constituting 4.3% of such shares and no shares of Preferred Stock. Karine
Hollander owns 50,000 shares of Common Stock, constituting 2.2% of such shares
and no shares of Preferred Stock, all of which are subject to the Hollander
Voting Trust Agreement and are currently voted by Reginald Spinello. PDK
Acquisition Corp. ("Acquisition Corp.") owns 200,000 shares of Common Stock,
consisting of 8.7% of such shares, and no shares of Preferred Stock (see Item
4(c) below). The percentages herein are based upon
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2,300,007 shares of Common Stock, which is derived from 2,320,007 shares
outstanding as of July 10, 2000, as reported in the Company's Form 10-Q, filed
on July 14, 2000, and 20,000 shares which were surrendered to the Company on
September 15, 2000.
(b) The group consisting of the Reporting Persons, pursuant to Rule
13d-5(b)(1) is deemed to beneficially own 972,500 shares of Common Stock,
constituting 42.3% of the outstanding Common Stock.
(c) On September 15, 2000, PDK Acquisition Corp., a corporation wholly
owned by the Continuing Shareholders, entered into a Stock Purchase Agreement
(the "Purchase Agreement") with Dune Holdings Inc. Pursuant to the terms of the
Purchase Agreement, Acquisition Corp. agreed to buy, and Dune Holdings Inc.
agreed to sell, 200,000 shares of Common Stock for a purchase price of $5.00 per
share within 5 days of the date of the Purchase Agreement. The purchase price
for the shares will be increased if the price per share of Common Stock paid in
connection with the Acquisition exceeds $5.00, or if the Company accepts an
offer from a different bidder for the shares of Common Stock for a price in
excess of $5.00. In either case, Acquisition Corp. will pay the difference
between the consideration received per share of Common Stock and $5.00, payable
within ten days of the closing of such a transaction.
(d) None.
(e) None.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
See Item 4.
Item 7. Material to be Filed as Exhibits.
See Exhibits attached hereto.
* (a) Offer Letter from Reginald Spinello to the Board of Directors of
PDK Labs Inc., dated July 13, 2000.
* (b) Revised Offer Letter from Reginald Spinello to the Board of
Directors of PDK Labs Inc., dated July 19, 2000.
* (c) Voting Trust Agreement, dated as of October 6, 1995, by and between
Michael Lulkin and Michael Krasnoff, as Voting Trustee.
* (d) Voting Trust Agreement, dated as of October 6, 1995, by and between
Karine Hollander and Michael Krasnoff, as Voting Trustee
* (e) Stock Purchase Agreement, dated as of September 15, 2000, by and
between Dune Holdings Inc. and PDK Acquisition Corp.
* Previously filed.
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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.
Dated: October 19, 2000 /s/ Reginald Spinello
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President
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