UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Puerto Rico Residents Tax-Free Fund, Inc.
(Name of Issuer)
Common Shares, $0.01 par value
(Title of Class of Securities)
745274100
(CUSIP Number)
W. Heath Hawk
GAM Tower, 2 Tabonuco St., Suite 200
Guaynabo, Puerto Rico 00968
(770) 777-9373
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 7, 2021
(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 that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. ☐
| * | The remainder of this cover page shall be filled 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 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).
| CUSIP No. 745274100 | SCHEDULE 13D |
| 1 | NAME OF REPORTING PERSON
Ocean Capital LLC |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a): ☐ (b): ☐ |
| 3 | SEC USE ONLY
|
| 4 | SOURCE OF FUNDS
WC |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ☐ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Puerto Rico |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER
0 |
| 8 | SHARED VOTING POWER
1,008,052 | |
| 9 | SOLE DISPOSITIVE POWER
0 | |
| 10 | SHARED DISPOSITIVE POWER
1,008,052 |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,008,052 |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
☐ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.7%1 |
| 14 | TYPE OF REPORTING PERSON
OO |
| 1 | The percentages used herein are calculated based upon 7,910,587 shares of common stock outstanding as of November 1, 2021, as disclosed in the issuer’s proxy statement filed with the Securities and Exchange Commission on December 6, 2021. |
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| CUSIP No. 745274100 | SCHEDULE 13D |
| 1 | NAME OF REPORTING PERSON
William Heath Hawk |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a): ☐ (b): ☐ |
| 3 | SEC USE ONLY
|
| 4 | SOURCE OF FUNDS
WC, PF |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
☐ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A. |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER
0 |
| 8 | SHARED VOTING POWER
1,025,0521 | |
| 9 | SOLE DISPOSITIVE POWER
0 | |
| 10 | SHARED DISPOSITIVE POWER
1,025,0521 |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,025,052 |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
☐ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.0%2 |
| 14 | TYPE OF REPORTING PERSON
IN |
| 1 | Consisting of (i) 17,000 shares held in a joint account of Mr. Hawk and his spouse and (ii) 1,008,052 shares held by Ocean Capital LLC, which are deemed to be beneficially owned by Mr. Hawk in his capacity as managing member of Ocean Capital LLC. |
| 2 | The percentages used herein are calculated based upon 7,910,587 shares of common stock outstanding as of November 1, 2021, as disclosed in the issuer’s proxy statement filed with the Securities and Exchange Commission on December 6, 2021. |
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| CUSIP No. 745274100 | SCHEDULE 13D |
| 1 | NAME OF REPORTING PERSON
Brent D. Rosenthal |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a): ☐ (b): ☐ |
| 3 | SEC USE ONLY
|
| 4 | SOURCE OF FUNDS
|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
☐ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A. |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER
0 |
| 8 | SHARED VOTING POWER
0 | |
| 9 | SOLE DISPOSITIVE POWER
0 | |
| 10 | SHARED DISPOSITIVE POWER
0 |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
0 |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
☐ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0% |
| 14 | TYPE OF REPORTING PERSON
IN |
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| CUSIP No. 745274100 | SCHEDULE 13D |
| 1 | NAME OF REPORTING PERSON
José R. Izquierdo II |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a): ☐ (b): ☐ |
| 3 | SEC USE ONLY
|
| 4 | SOURCE OF FUNDS
|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
☐ |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A. |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER
0 |
| 8 | SHARED VOTING POWER
0 | |
| 9 | SOLE DISPOSITIVE POWER
0 | |
| 10 | SHARED DISPOSITIVE POWER
0 |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
0 |
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ☐ |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0% |
| 14 | TYPE OF REPORTING PERSON
IN |
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| CUSIP No. 745274100 | SCHEDULE 13D |
The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”). This Amendment No. 1 amends, supplements and, to the extent inconsistent with, supersedes the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on November 16, 2021.
Item 4. PURPOSE OF TRANSACTION
Item 4 is hereby amended and restated as follows:
The Reporting Persons acquired the shares of Common Stock to which this Schedule 13D relates in the ordinary course of business for investment purposes because they believe that the shares are undervalued and represent an attractive investment opportunity.
On November 15, 2021, Ocean Capital sent a letter by email to the Issuer (the “Notice”), providing notice of intent to (i) nominate Brent D. Rosenthal and José R. Izquierdo II (together, the “Nominees”) for election to the Board at the Issuer’s upcoming 2021 annual meeting of shareholders (the “Annual Meeting”) and (ii) propose to repeal any provision of, or amendment to, the Issuer’s bylaws adopted by the Board without shareholder approval subsequent to November 15, 2021, the date of the Notice. A copy of the Notice was delivered to the Issuer on November 16, 2021. In connection with the submission of the Notice, the Reporting Persons filed a preliminary proxy statement with the SEC on November 16, 2021.
On December 7, 2021, the Reporting Persons filed their definitive proxy statement and accompanying BLUE proxy card with the SEC in connection with their solicitation of proxies for the Annual Meeting. The Reporting Persons will seek shareholder support for Ocean Capital’s proposals to (i) elect the Nominees to the Board and (ii) repeal any provision of, or amendment to, the Issuer’s bylaws adopted by the Board without shareholder approval subsequent to November 15, 2021. The Reporting Persons are asking shareholders to vote on their BLUE proxy card “FOR ALL” of the Nominees and “FOR” the repeal of any provision of, or amendment to, the Issuer’s bylaws adopted by the Board without shareholder approval subsequent to November 15, 2021.
The Nominees’ biographies are set forth below. Additional information regarding Ocean Capital’s proposals can be found in the Reporting Persons’ definitive proxy statement filed with the SEC on December 7, 2021.
José R. Izquierdo II, age 38, is a San Juan-based attorney with over a decade of experience in both the private and public sectors. Currently, he is the Member and Managing Director of Main Line Ventures, LLC, a firm that counsels corporations, international organizations and world-class athletes on a range of legal, strategic and developmental matters. Mr. Izquierdo previously served as General Secretary of the World Boxing Organization’s Executive Committee, an international non-profit organization. At the government level, Mr. Izquierdo has served as Executive Director of the Puerto Rico Tourism Company, a public corporation responsible for stimulating, promoting and regulating the development of Puerto Rico’s tourism industry, from 2017 to 2018, member of the Governor of Puerto Rico’s fiscal transition team, member of the Government of Puerto Rico’s Economic Development Council, Assistant Secretary of Economic Development and has sat on numerous boards of directors. Mr. Izquierdo served as Principal at The Law Offices of José R. Izquierdo II. Mr. Izquierdo is a 2005 graduate of Haverford College and holds a Juris Doctorate from the University of Puerto Rico School of Law. Ocean Capital believes Mr. Izquierdo’s extensive leadership experience at both the public and private sectors makes him qualified to serve as a director of the Issuer.
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| CUSIP No. 745274100 | SCHEDULE 13D |
Brent D. Rosenthal, age 49, founded Mountain Hawk Capital Partners, LLC, an investment fund focused on small and microcap equities in the technology, media, telecom (TMT) and food industries, in 2017. He has served as Chairman of the board of directors of comScore, Inc., a media measurement and analytics company, since April 2018 and as a director since January 2016. Mr. Rosenthal has been the Lead Independent Director/Non-Executive Chairman of the board of directors of RiceBran Technologies, a food company, since July 2016 and served as an advisor to the board of directors and executive management of FLYHT Aerospace, a provider of solutions for the aviation industry, from December 2019 to June 2020 and as a member of the FLYHT Aerospace board of directors since June 2020. He also served on the board of directors of SITO Mobile, Ltd., a mobile location-based media platform, from August 2016 to July 2018, and as Non-Executive Chairman of its board of directors from June 2017 to July 2018. Previously, Mr. Rosenthal was a Partner in affiliates of W.R. Huff Asset Management, an employee-owned investment manager, where he worked from 2002 to 2016. Mr. Rosenthal served as the Non-Executive Chairman of Rentrak Corporation, a media measurement and research company, from 2011 to 2016 and as a director from 2008 to 2016. He was Special Advisor to the board of directors of Park City Group, Inc., the parent company of ReposiTrak Inc., a company with a sourcing, compliance management and advanced commerce platform for retailing, from November 2015 to February 2018. Mr. Rosenthal earned his B.S. from Lehigh University and M.B.A. from the S.C. Johnson Graduate School of Management at Cornell University. He is an inactive Certified Public Accountant. Ocean Capital believes Mr. Rosenthal’s board of directors experience and finance background make him qualified to serve as a director of the Issuer.
The Reporting Persons may engage in discussions with management, the Board, other shareholders of the Issuer and other relevant parties, including representatives of any of the foregoing, concerning the Reporting Persons’ investment in the Issuer, including, without limitation, matters concerning the Issuer’s business, operations, Board appointments, governance, management, capitalization and strategic plans and matters relating to the closed-end nature of the Issuer. The Reporting Persons may exchange information with any persons pursuant to appropriate confidentiality or similar agreements or otherwise, work together with any persons pursuant to joint agreements or otherwise, propose changes in the Issuer’s business, operations, board appointments, governance, management, capitalization, strategic plans or matters relating to the closed-end nature of the Issuer, or propose or engage in one or more other actions set forth under subparagraphs (a)-(j) of Item 4 of Schedule 13D.
The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors, including, without limitation, the outcome of any discussions referenced above, the Issuer’s financial position and strategic direction, actions taken by management or the Board, price levels of the Common Stock, conditions in the securities market and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate, including, without limitation, purchasing additional shares of Common Stock or selling some or all of their shares of Common Stock, engaging in short selling of or any hedging or similar transactions with respect to the shares of Common Stock and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect to their investment in the Common Stock.
The Reporting Persons have not entered into any agreement with any third party to act together for the purpose of acquiring, holding, voting or disposing of the shares of Common Stock reported herein.
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| CUSIP No. 745274100 | SCHEDULE 13D |
SIGNATURES
After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
| Date: December 7, 2021 | ||
| Ocean Capital LLC | ||
| By: | /s/ William Heath Hawk | |
| Name: | William Heath Hawk | |
| Title: | Managing Member | |
| William Heath Hawk | ||
| /s/ William Heath Hawk | ||
| Brent D. Rosenthal | ||
| /s/ Brent D. Rosenthal | ||
| José R. Izquierdo II | ||
| /s/ José R. Izquierdo II | ||
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