================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-KSB/A No. 1
----------------------------------
Mark One
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED MARCH 31, 2000
OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
----------------------------------
Commission file number 0-26202
GLOBAL CAPITAL PARTNERS, INC.
(Exact name of small business issuer as specified in its charter)
----------------------------------
DELAWARE 52-1807562
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
6000 FAIRVIEW ROAD, SUITE 1410, CHARLOTTE, NORTH CAROLINA, 28210
(Address of principal executive offices) (Zip Code)
(704) 643-8220
(Issuer's telephone number, including area code)
----------------------------------
SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:
None
SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT:
Common Stock, $.05 par value
Placement Agent Warrants
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |_|
State issuer's revenues for its most recent fiscal year: $45,908,499
The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average of the bid and ask price of
such common equity on June 28, 2000 was approximately $43,750,000
The total number of shares of the registrant's common stock, $.05 par value,
outstanding on June 28, 2000 was 10,430,839
Transitional Small Business Disclosure Format: Yes |_| No |X|
================================================================================
<PAGE>
GLOBAL CAPITAL PARTNERS, INC.
INDEX TO FORM 10-KSB/A NO. 1
PART III
<TABLE>
<S> <C>
Item 9. Directors and Executive Officers, Promoters and Control Persons; Compliance with Section
16(a) of the Exchange Act.............................................................................1
Item 10. Executive Compensation................................................................................3
Item 11. Security Ownership of Certain Beneficial Owners and Management........................................6
Item 12. Certain Relationships and Related Transactions........................................................7
Item 13. Exhibits, List and Reports on Form 8-K...............................................................10
Signatures......................................................................................................11
</TABLE>
<PAGE>
EXPLANATORY NOTE
Pursuant to General Instruction E(3) of Form 10-KSB, this amended
report on Form 10-KSB/A is being filed hereby to amend the annual report on Form
10-KSB of Global Capital Partners, Inc. filed on July 3, 2000 solely to include
the information required by Items 9, 10, 11 and 12 of Part III of such annual
report in lieu of incorporation by reference from the proxy statement of Global
Capital Partners, Inc. to be filed in connection with the 2000 annual meeting of
stockholders, and to revise Exhibit 21.1 to such report. The terms "GCAP," "we,"
"us," or "our" are used herein to simplify the presentation of information and
refer to Global Capital Partners, Inc. The term "SEC" refers to the U.S.
Securities and Exchange Commission
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
A. DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors, including our two directors
who resigned subsequent to our fiscal year ended March 31, 2000, and
their respective ages and positions are set forth below:
<TABLE>
<CAPTION>
<S> <C>
Name Age Position
Martin A. Sumichrast 33 Chairman of the Board, President and Chief
Executive Officer
Kevin D. McNeil 40 Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
Wolfgang Kossner 32 Vice Chairman of the Board
Frank Devine 56 Director
Dr. Lawrence Chimerine 60 Director
Jay R. Schifferli 40 Director
Paul F. McCurdy 39 Director
Michael Sumichrast, Ph.D. 79 Director
</TABLE>
Messrs. Kossner and Martin A. Sumichrast were elected as Class III
Directors, each to serve until the annual meeting of stockholders to be held
during the year 2001. Effective May 1, 2000, Mr. Kossner resigned his
directorship in connection with the sale of our European operations to pursue
other opportunities in Europe. The remaining directors unanimously elected Frank
Devine to fill the vacancy created by Mr. Kossner's resignation and Mr. Devine
shall serve until the annual meeting of stockholders to be held during the year
2001. Dr. Lawrence Chimerine was elected to serve as a Class I Director until
the annual meeting of stockholders to be held in 2002. Mr. Jay R. Schifferli and
Michael Sumichrast, Ph.D. were elected to serve as Class II Directors, each
until the annual meeting of stockholders to be held during the year 2000.
Effective July 1, 2000, Mr. Schifferli resigned his directorship in connection
with his acceptance of a full-time, in-house, general counsel position with Nx
Networks. The remaining directors unanimously elected Paul F. McCurdy to fill
the vacancy created by Mr. Schifferli's resignation. Mr. McCurdy is, and Mr.
Schifferli was until joining Nx Networks, a partner with our outside law firm,
Kelley Drye & Warren LLP. Mr. McCurdy shall serve until the annual meeting of
stockholders to be held in the latter half of 2000. There are no family
relationships among any of our officers and directors except that Michael
Sumichrast, Ph.D. and Martin A. Sumichrast are father and son, respectively.
1
<PAGE>
MARTIN A. SUMICHRAST, 33, has served as our Chairman of the Board, Chief
Executive Officer and President since December 1998, Vice Chairman from March
1997 to March 1998 and as a director since our inception in 1993. Mr. Sumichrast
is a founder of GCAP and was formerly Secretary, Executive Vice President and
Chief Financial Officer. Mr. Sumichrast is also a director of EBI Securities
Corporation and Chairman of MoneyZone.com, each a subsidiary of ours.
KEVIN D. McNEIL, 40, has served as our Executive Vice President and
Secretary since December 1998, as Treasurer and Chief Financial Officer since
March 1997 and as comptroller since August 1996. From 1994 to 1996, Mr. McNeil
served as a supervising auditor for Pannell Kerr Forster PC, an international
accounting firm. From 1990 until 1994, Mr. McNeil served as a supervising
auditor for Schoenadel, Marginot & Company, CPAs, a Washington D.C. regional
accounting firm. Mr. McNeil is a member of the American Institute of Certified
Public Accountants, the Virginia Society of Certified Public Accountants and the
Internal Auditors Division of the Securities Industry Association.
WOLFGANG KOSSNER, 32, served as our Vice Chairman of the Board since
December 1998 and as director since August 1996 until his May 1, 2000
resignation. Mr. Kossner was our Executive Vice President from August 1996 until
November 1, 1996. Mr. Kossner is a co-founder of Eastbrokers Beteiligungs AG.
From 1993 through 1995, Mr. Kossner served as the managing director of WMP Bank
AG (formerly named WMP Borsenmakler AG), a subsidiary acquired by us in 1996.
Prior to that, Mr. Kossner was the manager of securities trading at WMP Bank AG
from 1991 to 1993. Mr. Kossner also served on the Supervisory Boards of our
subsidiaries in Vienna, Ljubljana and Zagreb. Mr. Kossner is also principal and
founder of our largest stockholder, General Partners Beteiligungs AG.
FRANK DEVINE, 56, has served as a director since July 4, 2000. Mr.
Devine also serves as a business consultant for various entities. He has founded
or co-founded Bachmann-Devine, Incorporated, a venture capital firm and Shapiro,
Devine & Craparo, Inc., a manufacturers' agency serving the retail industry and
serves on the boards of directors of these companies. Since December 1994, Mr.
Devine has served as a member of the board of directors of Salton, Inc., a
publicly owned corporation that markets and sells electrical appliances to the
retail trade under various brand names, and of SAFLINK Corporation, a publicly
owned software security company.
DR. LAWRENCE CHIMERINE, 60, has served as a director since February 1999,
and has been Managing Director and Chief Economist at the Economic Strategy
Institute since 1993. Since 1991, Dr. Chimerine has served as President of
Radnor International Consulting, Inc., an international consulting firm. Dr.
Chimerine is also a director of Bank United Corp., Outsource International, Inc.
and Sanchez Computer Associates, Inc.
MICHAEL SUMICHRAST, Ph.D., 79, has served as a director since 1993, and
as our Chairman of the Board from our inception in 1993 until March 1997. From
1990 to 1994, Dr. Sumichrast served as Chairman of the Board of Sumichrast
Publications, Inc., a real estate publication located in Rockville, Maryland,
and as an economic adviser and representative of various international American
companies. From 1963 to 1990, Dr. Sumichrast was the senior vice president and
chief economist of the National Association of Home Builders, a home builders
professional association.
JAY R. SCHIFFERLI, 40, served as a director since January 1, 1999 until
his July 1, 2000 resignation and was a partner at our outside law firm, Kelley
Drye & Warren LLP, an international law firm with offices in the United States,
Europe and Asia. Mr. Schifferli joined Kelley Drye & Warren LLP in 1986, and
concentrated his practice in securities and corporate law.
2
<PAGE>
PAUL F. McCURDY, 39, has served as a director since July 4, 2000. Mr.
McCurdy is a partner at Kelley Drye & Warren LLP. Mr. McCurdy joined Kelley Drye
& Warren LLP in 1987 and concentrates his practice in broker-dealer regulation,
securities law, business organizations and arbitration.
DIRECTOR COMPENSATION. In April 1999, our board of directors adopted a
company policy that eliminated all cash payments for services on the board and
attendance at board meetings. Instead, each of our non-officer directors will be
awarded 7,500 shares of restricted stock at the time he or she joins the Board
and an annual award of 5,000 options pursuant to our 1996 Stock Option Plan, as
amended. Provisions of the Stock Option Plan are described under "Item 10.
Executive Compensation - 1996 Stock Option Plan" on page 6 of this report. We
granted 7,500 shares of restricted stock and an option to purchase up to 5,000
shares of our common stock to each of Dr. Chimerine, Dr. Sumichrast and Mr.
Schifferli at the time the policy was adopted in April 1999.
During the fiscal year ended March 31, 2000, no fees were paid to
directors. Each of our current directors waived such fees for the fiscal year
ended March 31, 2000.
B. COMPLIANCE WITH SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our officers and directors and persons who own more than 10 percent of
a registered class of our equity securities to file with the SEC initial reports
of beneficial ownership within ten days of becoming such a reporting person and
reports of changes in their ownership of our equity securities by the tenth day
of the month following such changes in ownership, and such persons are required
by SEC rules to furnish us with copies of such filed reports. Based solely on a
review of the copies of Forms 3, 4 and 5 and amendments thereto furnished by
such persons to us, or written representations that they have filed on a timely
basis all reports required by Section 16(a) and the rules promulgated
thereunder, and without researching or making any inquiry regarding delinquent
Section 16(a) filings, we note that four reports were filed subsequent to filing
due dates in respect of twenty-five transactions effected by Martin A.
Sumichrast, four reports were filed subsequent to filing due dates in respect of
twenty-two transactions effected by Belle Holdings, Inc., four reports were
filed subsequent to filing due dates in respect of sixteen transactions effected
by Corona Corp., four reports were filed subsequent to filing due dates in
respect of sixteen transactions effected by Reid Breitman, two reports were
filed subsequent to filing due dates in respect of two transactions effected by
Kevin D. McNeil, two reports were filed subsequent to filing due dates in
respect of two transactions effected by Wolfgang Kossner, one report was filed
subsequent to the filing due date in respect of two transactions effected by
Michael Sumichrast, Ph.D., two reports were filed subsequent to filing due dates
in respect of two transactions effected by Dr. Chimerine and two reports were
filed subsequent to filing due dates in respect of eight transactions effected
by General Partners Beteiligungs AG. We also note that as of the date hereof and
to our knowledge, no report has been filed in respect of certain dispositions by
each of Michael Sumichrast, Ph.D. and General Partners Beteiligungs AG.
ITEM 10. EXECUTIVE COMPENSATION
The following summary compensation table sets forth the compensation
for the executives and non-executive employees named below for the years ended
March 31, 2000, 1999 and 1998. No other executive officer had total annual
salary and bonus during any such period equal to or greater than $100,000.
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C>
Long Term Compensation
----------------------------------------------------------
Annual Compensation Awards Payouts
--------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name and Principal Other Annual Restricted Underlying LTIP All Other
-------------------
Position Year Salary Bonus Compensation Stock Awards($) Options/SARs(#) Payouts Compensation
-------- ---- ------ ----- ------------ --------- --------------- ------- ------------
Martin A. Sumichrast(1) 2000 $240,000 $120,000 -- -- 75,000 -- --
Chairman, President 1999 $ 175,000 $ -- -- -- 75,000 -- --
and Chief Executive 1998 $ 120,000 $ 20,000 -- -- -- -- --
Officer
3
<PAGE>
Long Term Compensation
----------------------------------------------------------
Annual Compensation Awards Payouts
--------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name and Principal Other Annual Restricted Underlying LTIP All Other
-------------------
Position Year Salary Bonus Compensation Stock Awards($) Options/SARs(#) Payouts Compensation
-------- ---- ------ ----- ------------ --------- --------------- ------- ------------
Kevin D. McNeil(2) 2000 $ 120,000 $ -- -- 50,000 -- --
Chief Financial 1999 $ 75,000 5,000 -- -- 50,000 -- --
Officer, Executive 1998 $ 57,500 $ 25,000 -- -- -- -- --
Vice President of $ 17,250
Finance, Treasurer, and
Secretary
RALPH OLSON,(3) 2000 $ 74,998 -- $225,000
Non-officer employee
Peter Schmid(4) 2000 -- -- -- -- -- --
Former Chairman, 1999 -- -- -- -- -- -- --
President and Chief 1998 $ 138,305 -- -- -- -- --
Executive Officer --
$30,000
------------------
<FN>
(1) Mr. Sumichrast became Chairman of the Board, President and Chief
Executive Officer of GCAP in December 1998, and was Vice Chairman of
the Board since March 1997.
(2) Kevin D. McNeil became Executive Vice President and Secretary of GCAP
in December 1998. He continues to serve as Chief Financial Officer and
Treasurer.
(3) Mr. Olson is a non-officer employee, Mr. Olson is a Vice President of
EBI Securities. Mr. Olson received 44,500 shares of common stock as
compesation for investment banking services.
(4) Mr. Schmid was the Chairman of the Board and Chief Executive Officer of
GCAP from March 1997 through December 15, 1998 and President of GCAP
from August 1996 through December 1998.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS
Effective as of January 1, 1999, we entered into an employment
agreement with Martin A. Sumichrast which will expire on December 31, 2004, and
will renew for a period of five years following the expiration date, unless
contrary notice is given by either party. We also entered into an employment
agreement, effective as of January 1, 1999, with Mr. McNeil, which will expire
on December 31, 2002, unless contrary notice is given by either party. The
annual salaries for Mr. Sumichrast and Mr. McNeil were initially fixed at
$240,000 and $120,000, respectively, with such subsequent increases in salary
during the term of their respective agreements as may be determined by our Board
of Directors. Messrs. Sumichrast and McNeil are each eligible to receive a
quarterly performance bonus of up to 1 percent and 1/4 of 1 percent,
respectively, of total revenue of GCAP in excess of $6,000,000 per quarter. As
an inducement for entering into each of their respective employment agreements,
we agreed to sell 200,000 shares and 50,000 shares at $3.50 and $3.00 per share
of our common stock, respectively, to Mr. Sumichrast and Mr. McNeil, in exchange
for each of Messrs. Sumichrast and McNeil issuing to us a promissory note in the
amount of $700,000 and $150,000, respectively, each bearing interest at an
annual rate of 7 percent, and expiring on January 1, 2004 and January 1, 2002,
respectively. Each employment agreement provides, among other things, for
participation in an equitable manner in any profit-sharing or retirement plan
for employees or executives and for participation in employee benefits
applicable to our employees and executives, as well as for the use of an
automobile and other fringe benefits commensurate with their duties and
responsibilities and for benefits in the event of disability. Pursuant to each
such employment
4
<PAGE>
agreement, employment may be terminated by us with cause or by the
executive with or without good reason. Termination by us without cause or by the
executive for good reason would subject us to liability for liquidated damages
in an amount equal to the current salary of the terminated executive as of the
date of termination and a pro rata portion of his prior year's bonus for the
remaining term of the agreement, payable in equal monthly installments, without
any set-off for compensation received from any new employment. In addition, the
terminated executive would be entitled to continue to participate in and accrue
benefits under all employee benefit plans and to receive supplemental retirement
benefits to replace benefits under any qualified plan for the remaining term of
the agreement to the extent permitted by law. Under the employment agreements,
we are obligated to purchase insurance policies on the lives of Messrs.
Sumichrast and McNeil. We will pay the premiums on these policies and would,
upon the death of the employee, receive an amount equal to the premiums paid
under the policy and the remaining proceeds would be paid to the employee's
designated beneficiary. Additionally, we have a $l million key-person life
insurance policy on Mr. Sumichrast and a $500,000 key-person life insurance
policy on Mr. McNeil, in each case with us as the beneficiary.
Effective January 1, 1999, we entered into a one-year consulting
agreement with Wolfgang Kossner, at that time the Vice Chairman of our Board of
Directors. Mr. Kossner received compensation for his consulting services of
200,000 Class C Warrants, payable in equal installments on March 31, 1999, June
30, 1999, September 30, 1999 and December 31, 1999, the value of such warrants
determined for compensation purposes using the Black Scholes method at the time
of grant. None of the warrants were exercised prior to their respective
expirations. Mr. Kossner's consulting agreement also provided for
project-success fees to be determined on a project-by-project basis. The
agreement provided for termination by GCAP for cause and, in the event that GCAP
terminated the agreement for any reason other than for cause, Mr. Kossner would
have been entitled to the remaining payments that would have otherwise been
payable had his services not been terminated. The agreement also provided for
full compensation and reimbursement of expenses in the event of disability.
OPTION/SAR GRANTS
During the fiscal year ended March 31, 2000, except as indicated under
the heading "--Director Compensation" on page 3 of this amended report, there
were no grants to any of the named executive officers of directors of options,
stock appreciation rights or similar instruments. On December 23, 1998, our
board of directors granted stock options to Messrs. Sumichrast, McNeil and
Kossner, pursuant to which, Messrs. Sumichrast and Kossner are each entitled for
10 years to purchase 75,000 shares of our common stock at $4.00 per share and
Mr. McNeil is entitled for 7 years to purchase 50,000 shares of our common stock
at $4.00 per share. During the fiscal year ended March 31, 1998, there were no
grants to any of the named executive officers or directors of options, stock
appreciation rights or similar instruments.
OPTION/SAR EXERCISES
During the fiscal year ended March 31, 2000, no options to purchase
shares of our common stock were exercised. During the fiscal years ended March
31, 1999 and March 31, 1998, options to purchase 10,000 and 7,750 shares,
respectively, of our common stock were exercised.
5
<PAGE>
FISCAL YEAR-END OPTION/SAR VALUES
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION> Value of Unexercised
Number of Securities In-The-Money
Underlying Unexercised Options/SARs at
Options/SARs at FY-End FY-End($) Exercisable/
Shares Acquired Value (#) Exercisable/ Unexercisable
on Exercise (#) Realized Unexercisable (e)
Name (b) ($) (d)
(a) (c)
<S> <C> <C> <C> <C> <C> <C>
---------------------------- ------------------ -------------- --------------------------- -----------------------
----------------------------
Martin A. Sumichrast - - 0/75,000 -
----------------------------
Kevin D. McNeil - - 0/50,000 -
----------------------------
</TABLE>
1996 STOCK OPTION PLAN
At our annual meeting of stockholders held on December 10, 1996, the
stockholders approved our 1996 Stock Option Plan, pursuant to which our
officers, employees, directors and consultants and certain of our affiliates are
eligible to be granted awards of stock options, stock appreciation rights and/or
restricted stock. Pursuant to its terms, the plan shall be administered by a
stock award committee, or, in the absence of such a committee, by the entire
board of directors having the plenary authority to grant awards in any
combination permitted under the plan, and to determine the terms and conditions
of the awards.
The total number of shares of common stock reserved and available to be
awarded under the plan was initially 400,000. The plan was since amended in
December 1997, April 1999 and November 1999 increasing the total number of
shares of common stock available under the plan to 600,000, 850,000 and
1,200,000, respectively. Currently, the total number of shares of common stock
available under the plan is 1,200,000.
During the fiscal year ended March 31, 2000, options to purchase
295,000 shares of our common stock were granted under the 1996 Stock Option
Plan, as amended. During the year ended March 31, 1999, options to purchase
220,000 shares of our common stock were granted under this plan. During the
fiscal year ended March 31, 1998, 10,000 shares were issued outside of the plan
as compensation for services provided to us.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information about shares of our common stock
owned as of July 28, 2000 by:
o each person who is known by us to own beneficially more than five
percent of our common stock,
o each of our officers and directors named on pages 1-2 of this amended
report, and
o all of our officers and directors as a group.
6
<PAGE>
Except as otherwise noted, the persons named in the table below do not
own any other shares of our capital stock and have sole voting and investment
power with respect to all shares beneficially owned by them. As of July 28, 2000
10,430,839 shares of voting stock were outstanding, consisting solely of shares
of our common stock.
<TABLE>
<CAPTION>
<S> <C>
Percentage of
Number of Outstanding
Name and Address (1) Position Held Shares Owned Shares
------------------------------- ------------------------------------- ---------------------- ----------------
Martin A. Sumichrast (2) Chairman of the Board, President,
Chief Executive Officer and Director 1,205,000 11.31%
Kevin D. McNeil (3) Executive Vice President,
Secretary, Treasurer and Chief
Financial Officer 160,078 1.51%
Dr. Lawrence Chimerine (4) Director 12,500 *
Jay R. Schifferli (4) Director 12,500 *
Michael Sumichrast, Ph.D. Director 7,500 *
Paul F. McCurdy Director 0 *
Frank Devine Director 0 *
Belle Holdings, Inc. Stockholder 740,000 6.83%
Reid Breitman (5) Stockholder 1,967,500 18.86%
Corona Corp. Stockholder 1,960,000 18.79%
General Partners Beteiligungs
AG Stockholder 1,128,500 10.82%
All Officers and Directors as 1,385,078 12.86%
a Group (5 persons)
--------------------
* Less than 1 percent
<FN>
(1) Except as otherwise noted, c/o Global Capital Partners,
Inc., 6000 Fairview Road, Suite 1410, Charlotte, North
Carolina 28210.
(2) Includes (A) 740,000 shares of common stock owned by Belle
Holdings, Inc., a Nevada corporation of which Mr. Sumichrast
is sole officer, director and stockholder, (B) 240,000 shares
of common stock owned by Mr. Sumichrast directly, (C) 75,000
shares of common stock issuable upon the exercise of options
to purchase common stock at $4.00 per share exercisable
immediately and expiring December 23, 2008 and (D) 150,000
shares of common stock issuable upon the exercise of Class C
Warrants to purchase common stock at $7.00 per share
exercisable immediately and expiring on February 19, 2003.
(3) Includes (A) 50,000 shares of common stock issuable upon the
exercise of options to purchase common stock at $4.00 per
share exercisable immediately and expiring December 23, 2008,
and (B) 57,583 shares issuable upon exercise of Class C
Warrants to purchase common stock at $7.00 per share
exercisable immediately and expiring on February 19, 2003.
(4) Includes 7,500 shares of restricted common stock and
5,000 options to acquire shares of common stock at $5.00 per
share.
7
<PAGE>
(5) Includes 1,960,000 shares indirectly owned through Corona
Corp., a corporation of which Mr. Breitman is sole
stockholder, director and officer.
</FN>
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Executive Officer Compensation--Employment Agreements" on page 4
of this amended report, and see pages 3, 5 and 6 for information concerning
stock option grants to related persons.
Until the sale of our European operations on June 14, 2000, we leased
office space from General Partners Immobielenz (formerly Residenz Realbesitz AG)
for our Vienna operations pursuant to a month-to-month lease. Under the terms of
the lease, we incurred occupancy costs of approximately 1,200,000 Austrian
Schillings (approximately $95,000 USD) in the fiscal year ended March 31, 1999.
This property was sold I early 1999 and has thereafter not been owned by a
related party. The terms of this lease were negotiated such that we were subject
to occupancy expenses no greater than the current market rates. General Partners
Immobielenz is a subsidiary of General Partners Beteiligungs, AG, an Austrian
holding company and the beneficial owner of 1,462,920 shares of our common
stock. Wolfgang Kossner owns approximately 30 percent of the outstanding shares
of General Partners Beteiligungs, AG and is a member of the Supervisory Board of
each of General Partners Beteiligungs, AG, Eastbrokers Beteiligungs AG and WMP
Bank AG, a majority-owned subsidiary of Eastbrokers Beteiligungs AG.
WMP Bank AG is an Austrian broker-dealer, market maker and member of
the Vienna Stock Exchange. The common stock of WMP Bank AG is publicly traded on
the Main Market of the Vienna Stock Exchange. From time to time, WMP Bank AG has
made a market in stock of companies that have a relationship to us through our
directors or stockholders. For the year ended March 31, 1999, we generated
profits of approximately $1,190,000, and for the year ended March 31, 2000 our
trading in shares of these companies resulted in a loss.
We have periodically engaged in securities transactions with URBI S.A.,
a Spanish investment company. Wolfgang Kossner was a member of the Supervisory
Board of URBI S.A. from November 1996 through June 1998. On June 30, 1998, URBI
S.A. repaid in full 2,780,030 Austrian Schillings or (approximately $236,000
USD) due with respect to transactions occurring subsequent to December 31, 1997.
During our two most recent fiscal years, we have conducted various
business transactions with General Partners Beteiligungs, AG. As of the December
31, 1998, GCAP was owed $3,787,339 relating to these transactions, which
receivable was transferred in connection with the sale of our European
operations to the purchaser thereof.
On October 8, 1998, Peter Schmid, then our Chairman, Chief Executive
Officer and President, paid in full a balance due to GCAP of 6,748,111 Austrian
Schillings.
At December 31, 1998, we had a receivable related to securities
transactions from Mr. Kossner in the amount of 1,132,776 Austrian Schillings
(approximately $97,000 USD), which receivable was transferred in connection with
the sale of our European operations to the purchaser thereof.
At December 31, 1998, we had a receivable related to securities
transactions from Z.E. Beteiligungs AG, a subsidiary of General Partners
Beteiligungs AG, in the amount of 7,745,600 Austrian Schillings (approximately
$661,000 USD), which receivable was transferred in connection with the sale of
our European operations to the purchaser thereof.
8
<PAGE>
As of December 31, 1998, ZE Beteiligungs AG, an approximately 25
percent-owned subsidiary of General Partners Beteiligungs AG, owned
approximately 25 percent of UCP Beteiligungs AG, an Austrian holding company.
UCP Beteiligungs AG, in turn, owns 27.7 percent of a Russian chemical company,
UCP AOOT. Shares of UCP AOOT are listed over-the-counter on the Vienna Stock
Exchange. WMP Bank AG is a market maker in the shares of UCP AOOT on the Vienna
Stock Exchange. As of the close of the sale of our European operations, our
relationship with ZE Beteiligungs AG ceased to exist.
On January 1, 1999, Martin A. Sumichrast and Kevin D. McNeil purchased
70,000 and 32,583 Class C Warrants, respectively, from Eastbrokers North
America, Inc., a subsidiary of ours, in each case for an amount equal to $0.25
per warrant. The warrants entitle Mr. Sumichrast and Mr. McNeil, each, to
purchase one (1) share of our common stock at a price of $7.00 per share.
Payment for the warrants was in the form of unsecured promissory notes, with
one-year terms and interest accruing at 8 percent. We have extended the terms of
such notes for an additional year.
Effective January 1, 1999, Jay R. Schifferli, a partner at Kelley Drye
& Warren LLP, became a director of GCAP, and effective July 4, 2000, Paul F.
McCurdy, also a partner at Kelley Drye & Warren LLP, became a director of GCAP
to fill the vacancy created upon Mr. Schifferli's resignation. GCAP paid legal
fees to Kelley Drye & Warren LLP during the fiscal year ended March 31, 1999 in
the amount of $345,311.64 and during the fiscal year ended March 31, 2000
accrued fees payable to Kelley Drye & Warren LLP in the amount of approximately
$467,000.
As of Mr. Schifferli's July 1, 2000 resignation, Mr. Schifferli had
received 7,500 restricted shares of our common stock and 5,000 options to
acquire shares of our common stock at $5.00 per share as non-employee director
compensation.
In February 1999, Martin A. Sumichrast paid in full a note due in
aggregate principal amount of $300,000 payable to us in connection with his
acquisition in September 1997 of 50,000 shares of our common stock.
On April 19, 1999, Mr. Sumichrast and Mr. McNeil purchased 80,000
and 25,000 Class C Warrants from Eastbrokers North America, Inc., in each case
for an amount equal to $0.25 per warrant. Each warrant entitles Mr. Sumichrast
and Mr. McNeil, each, to purchase one (1) share of our common stock at a
price of $7.00 per share. We have extended the terms of such notes for an
additional year.
In order to partially fund our acquisition of Global Capital Markets,
LLC (then, The JB Sutton Group, LLC) on November 8, 1999, Belle Holdings, Inc.,
a Nevada corporation of which Mr. Sumichrast is sole director, officer and
stockholder, entered into an agreement with us pursuant to which it purchased
1,000,000 shares of our 10% Convertible Preferred Stock, Series A for $2.00 per
share and a warrant to purchase up to 700,000 shares of our common stock and, in
connection with such purchases, received an option to purchase up to an
additional 1,000,000 shares of preferred stock. The preferred stock was
convertible at any time and from time to time into shares of our common stock on
a 1:1 basis. On the same date, Belle Holdings, Inc. entered into an agreement
with Corona Corp., a Nevada corporation, pursuant to which Belle Holdings, Inc.
sold to Corona Corp. a $1 million note convertible at any time and from time to
time into shares of preferred stock owned by Belle Holdings, Inc. on a .35:1
basis and a warrant to purchase up to 490,000 shares of our common stock and, in
connection with such sale, gave Corona Corp. the option to purchase additional
notes, on the same terms as the initial $1 million note, additional notes up to
an aggregate principal amount of $1 million.
On January 10, 2000, Belle Holdings, Inc. partially exercised
its option and purchased 100,000 additional shares of preferred stock and,
simultaneously, Corona Corp. partially exercised its option and purchased an
additional note in principal amount of $200,000.
9
<PAGE>
As of the date of the purchase agreement between Belle Holdings, Inc.
and us, each share of preferred stock subject to such agreement was entitled to
one (1) vote on all matters submitted to our stockholders for their approval. As
a further inducement to Belle Holdings, Inc. to invest in us, we agreed to seek
stockholder approval to increase the voting power of the preferred stock from
one (1) vote per share to four (4) votes per share in order that the preferred
stock holders would obtain control of approximately 39% of the voting power of
our capital stock entitled to vote on all matters submitted to stockholders for
approval, rather than the approximately 14% of the voting power they would have
had without such approval. These terms were negotiated by Corona Corp., whose
purchase price of the convertible notes was used by Belle Holdings, Inc. to
purchase the preferred stock and warrants under the agreement, as a condition
precedent to the investments by Corona Corp., having in mind that Mr. Sumichrast
would participate in Belle Holdings, Inc. in order to more fully align the
interests of our management with those of our stockholders. Subsequent to
shareholder approval of the increase in voting power of the preferred stock,
NASDAQ informed us that their listing guidelines proscribe empowering any class
of security with a higher voting right than any other class. Additionally,
NASDAQ informed us that pursuant to certain other listing requirements, the
initial $2.00 price per share of our preferred stock must to be increased to
$2.0625 per share, the closing price on November 8, 1999. Accordingly, on
January 31, 2000, we modified our agreement with the holders of, and negotiated
the acceleration of the conversion of all shares of, our preferred stock and the
exercise of all warrants held by Belle Holdings. Inc. In consideration of these
changes, on January 31, 2000 we sold to Belle Holdings, Inc., in exchange for a
$375,000 note, due July 1, 2001 and bearing interest at a rate of 8% per annum,
a Class D Warrant to purchase up to 1,500,000 shares of our preferred stock at a
price of $5.50 per share, exercisable beginning July 1, 2001 and expiring
December 31, 2005. Holders of these warrants have certain anti-dilution
protections and are entitled to piggyback registration after July 1, 2001. On
the same date, Belle Holdings, Inc. sold to each of Corona Corp. and a
third-party Class D Warrants to purchase up to 900,000 and 200,000,
respectively, of such shares. In further consideration of such changes, on March
31, 2000, Belle Holdings, Inc. transferred 70,000 shares of common stock to
Corona Corp.
On March 31, 2000, Corona Corp. exercised the remaining portion of its
option and purchased an additional note in principal amount of $1.8 million,
converted all notes it had purchased from Belle Holdings, Inc. in aggregate
principal amount of $4 million, receiving thereby 1,400,000 shares of preferred
stock, converted the 1,400,000 shares of preferred stock, receiving thereby
1,400,000 shares of common stock, and exercised its warrant, receiving thereby
490,000 shares of common stock. Simultaneously, Belle Holdings, Inc. exercised
the remaining portion of its option and purchased from us 900,000 shares of
preferred stock, converted 600,000 of such shares, receiving thereby 600,000
shares of common stock, transferred the remaining 1,400,000 shares of the
preferred stock to Corona Corp. upon conversion of the $4 million in notes and
exercised its warrant, receiving thereby an additional 210,000 shares of our
common stock.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-B
See Exhibit 21.1 immediately following the signature page
hereto.
REPORTS ON FORM 8-K
GCAP filed no reports on Form 8-K during the quarter ended
March 31, 2000.
10
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
GLOBAL CAPITAL PARTNERS, INC.
(Registrant)
By: July 31, 2000
---------------------------------------------- ---------------------
Martin A. Sumichrast Date
Chairman, Chief Executive Officer, President and Director
11
</TABLE>
<PAGE>
