SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
[X] Filed by Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12
GLOBAL CAPITAL PARTNERS INC.
(Name of Registrant As Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (1)
N/A
4) Proposed maximum aggregate value of transaction:
N/A
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and date of its filing.
1) Amount Previously Paid:
N/A
2) Form, Schedule or Registration Statement No.:
N/A
3) Filing Party:
N/A
4) Date Filed:
N/A
Notice of Special Meeting of Stockholders
to be held on November 20, 2001 and
Proxy Statement
GLOBAL CAPITAL PARTNERS INC.
6000 FAIRVIEW ROAD
SUITE 1410
CHARLOTTE, NORTH CAROLINA 28210
October 29, 2001
Dear Stockholders:
You are cordially invited to attend a Special Meeting of Stockholders of
Global Capital Partners Inc. (formerly Eastbrokers International Incorporated).
The meeting will be held on Tuesday, November 20, 2001, at 10:00 a.m., at 6000
Fairview Road, Suite 1410, Charlotte, North Carolina 28210.
In the following pages, you will find the formal notice of our special
meeting and our proxy statement. After reading the proxy statement, please mark,
sign and promptly return the enclosed proxy card to ensure that your shares are
represented at the meeting.
We hope that many of you will be able to attend our special meeting in
person. It is important that your shares be represented and voted at the meeting
regardless of the size of your holdings. If your shares are registered in your
name and you plan to attend the meeting, please mark the appropriate box on the
enclosed proxy card and you will be registered for the meeting. We urge that you
attend the meeting, but if you cannot you may instead vote by proxy.
We appreciate the continuing interest of our stockholders in our business,
and we look forward to seeing you at the meeting.
Sincerely,
Martin A. Sumichrast
Chairman of the Board, President
and Chief Executive Officer
GLOBAL CAPITAL PARTNERS INC.
6000 FAIRVIEW ROAD
SUITE 1410
CHARLOTTE, NORTH CAROLINA 28210
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON November 20, 2001
The special meeting of stockholders of Global Capital Partners Inc. will be
held at 10:00 a.m. on Tuesday, November 20, 2001 at 6000 Fairview Road, Suite
1410, Charlotte, North Carolina 28210, for the following purposes:
1. To approve a proposed private placement of the Company and the
issuance of securities in connection with the proposed private
placement; and
2. To transact such other business as may properly come before the
meeting.
To ensure that your shares are represented at the meeting in the event
that you do not attend, please mark and sign the enclosed proxy card and
return it in the enclosed envelope.
By Order of the Board of Directors,
Kevin D. McNeil
Executive Vice President, Chief
Financial Officer, Treasurer
and Secretary
Date: October 29, 2001
GLOBAL CAPITAL PARTNERS INC.
PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
TABLE OF CONTENTS
GENERAL INFORMATION FOR STOCKHOLDERS..........................................5
PURPOSE OF PROXY..............................................................5
HOW TO VOTE...................................................................5
MATTERS TO BE SUBMITTED TO A VOTE.............................................5
REVOKING PROXIES..............................................................5
NAMING OTHER PROXIES..........................................................5
WHO MAY VOTE..................................................................6
PROPOSAL APPROVAL OF PRIVATE PLACEMENT........................................7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT...............................................................10
OTHER INFORMATION............................................................12
REQUIRED VOTE................................................................12
SOLICITATION OF PROXIES GENERALLY............................................12
COSTS........................................................................12
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS....................................14
GENERAL INFORMATION FOR STOCKHOLDERS
PURPOSE OF PROXY. This proxy statement and the enclosed proxy card relate
to a special meeting of stockholders (the "Special Meeting") of Global Capital
Partners Inc., a Delaware corporation ("GCAP," "we," "us," or "our"). Our board
of directors (the "Board") is soliciting proxies from stockholders in order to
provide every stockholder an opportunity to vote on all matters submitted to a
vote of stockholders at the Special Meeting, whether or not he or she attends in
person. This proxy statement and the enclosed proxy card are being mailed to our
stockholders beginning on or about October 29, 2001.
HOW TO VOTE. You may vote on each matter to be submitted to a vote of
stockholders at the Special Meeting by marking the appropriate box on the
enclosed proxy card, signing it and returning it in the enclosed envelope. When
the proxy card is properly signed and returned by you, your shares will be voted
at the meeting by the proxyholders named on the proxy card in accordance with
your directions. If you return the proxy card without marking a box for a
specified matter, your shares will be voted on that matter as recommended by the
Board.
MATTERS TO BE SUBMITTED TO A VOTE. The only matter known to management to
be submitted to a vote of stockholders at the meeting is to approve a proposed
private placement of the Company and the issuance of securities in connection
with the proposed private placement. Your signed, returned proxy card gives the
proxyholders named on the proxy card the discretionary authority to vote your
shares in accordance with their best judgment on any other business that may be
presented at the meeting. Unless you specify otherwise, your shares will be
voted on any other business as recommended by the Board.
REVOKING PROXIES. If you sign and return a proxy card, you may revoke it or
submit a revised proxy card at any time before the vote to which the proxy card
relates. You may also vote by ballot at the Special Meeting. If you vote by
ballot, you will thereby cancel any proxy which you previously returned as to
any matter on which you vote by ballot.
NAMING OTHER PROXIES. You may designate as your proxy someone other than
those named on the enclosed proxy card by crossing out those names and inserting
the name(s) of the person(s) you wish to have act as proxy for you. No more than
three (3) persons should be so designated. In such a case, you must deliver the
proxy card to the person(s) you designated and they must be present and vote at
the meeting. Proxy cards on which other proxyholders have been designated should
not be mailed or delivered to us.
WHO MAY VOTE. The Board has set the "Record Date" for the Special Meeting
as October 24, 2001. Stockholders as of the close of business on the Record Date
are entitled to notice of and to vote at the Special Meeting. Each share of
common stock is entitled to one vote. As of the Record Date, [3,640,837] shares
of common stock were outstanding. Those shares were held by [126] stockholders
of record.
PROPOSAL APPROVAL OF PRIVATE PLACMENT AND THE ISSUANCE OF
SECURITIES IN CONNECTION WITH THE PRIVATE PLACEMENT
BACKGROUND
Nasdaq Marketplace Rule 4350(i)(1)(D) requires stockholder approval of a
transaction other than a public offering involving the sale, issuance or
potential issuance by an issuer of common stock (or securities convertible into
or exercisable for common stock) either:
o at a price less than the greater of book or market value which together
with sales by officers, directors or substantial stockholders of the issuer
equals 20% or more of the common stock or 20% or more of the voting power
outstanding before the issuance; or
o the number of shares of common stock to be issued is or may be equal to 20%
or more of the common stock or 20% or more of the voting power outstanding
before the issuance for less than the greater of book or market value of
the stock.
The Company requires additional funding to maintain its listing for net
tangible assets on the Nasdaq SmallCap Market. For the year ended March 30,
2001, the Corporation had a net loss of $43,890,000 on revenues of $20,229,000.
The Company will attempt to raise additional funds of up to ten million dollars
($10,000,000). However, there can be no assurance that the private placement
will be consummated. The estimated proceeds of the proposed private placement
are expected to satisfy the Corporation's capital requirements through at least
fiscal 2002.
CONTEMPLATED PRIVATE PLACEMENT OF THE COMPANY'S SECURITIES
The Company has reached an agreement in principle pursuant to which a group
of institutional investors would purchase up to three million five hundred
thousand dollars ($3,500,000) of the Company's 8% Series A Preferred Stock in a
private placement. The Company will attempt to raise additional funds of up to
ten million dollars ($10,000,000), however, the Company cannot state with
certainty the amount of funds that will be raised. The Series A Preferred Stock
is convertible, at the option of the holder, into common stock of the Company at
$.75 per share exercisable anytime after the second anniversary of the closing
date of the transaction ("Series A Preferred Stock"). For every ten shares of
Series A Preferred Stock that is purchased, the holder is entitled to five (5)
convertible common stock warrants (the "Warrants"). The Warrants are convertible
into common stock of the Company at $1.25 per share and are exercisable
beginning 12 months from the date of the finance closing and expiring 48
months after the date of the finance closing (the "Series A Preferred Stock"
and the "Warrants" are collectively referred to herein as the "Securities").
Holders of the Securities would have certain registration rights, pursuant
to which the Company would, among other things, be required to file a
registration statement with the Securities and Exchange Commission (the "SEC")
within 180 business days of closing the private placement covering both the
shares of Common Stock issued in the private placement and the shares underlying
the warrants. The securities sold in the contemplated private placement will not
be registered under the Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements.
As discussed above, the Nasdaq rules require the Company to obtain
stockholder approval of the issuance of a number of shares of common stock, or
securities exercisable for, or convertible into, common stock, equal to or
greater than 20% of the number of shares of the Company's common stock
outstanding prior to the issuance, if the issuance is for a price that is less
than the greater of the book value or market value of its common stock at the
time of issuance. Based upon the recent trading prices of the common stock and
the assumed exercise price of the Warrants pursuant to the contemplated terms of
the private placement, the issuance in the private placement of the shares of
Series A Preferred Stock and the shares issuable upon exercise of the Warrants
would exceed the 20% threshold. Accordingly, the Company is seeking stockholder
approval to issue the securities contemplated to be issued in the private
placement. At this time the Company cannot predict the amount of shares that
would be issued in the private placement or upon exercise of the warrants or the
warrant exercise price. Therefore, the Company cannot accurately estimate the
extent of dilution to its existing stockholders.
TERMS OF THE 8% SERIES A PREFERRED STOCK AND THE WARRANTS
The general terms of the 8% Series A Preferred Stock and Warrants are
summarized below:
8% SERIES A PREFERRED STOCK
INTEREST 8% per annum is payable in cash or shares of
our common stock.
CONVERSION The Series A Preferred Stock is convertible,
at the option of the holder, into common
stock of the Company at $.75 per share at
anytime after the second anniversary of the
closing date of the transaction. For every
ten shares of Series A Preferred Stock that
is purchased, the holder is entitled to five
(5) convertible common stock Warrants. The
Warrants are convertible into common stock at
$1.25 per share and are exercisable beginning
twelve (12) months from the finance closing
date and expiring forty-eight (48) months
after the finance closing date.
ADJUSTMENTS The conversion price is subject to adjustment
in the event of:
o A stock dividend, subdivision,
combination or reclassification of our
common stock;
o The issuance of rights, options or
warrants to all holders of our common
stock; or any issuance of securities at
a per share selling price less that the
conversion price, as adjusted, (with
certain exception).
VOTING RIGHTS Each share of Series A Preferred Stock is
entitled to the number of votes equal to the
number of shares of common stock into which
such share of Series A Preferred Stock and
accrued dividends thereon is convertible,
from time to time. The holders of Series A
Preferred Stock are entitled to vote together
with holders of common stock at any meeting
of the shareholders on any and all matters
presented to the shareholders for
consideration.
CALL The Company has the right to call the Series
A Preferred Stock at any time. If the Company
does call the Series A Preferred Stock, the
holders are entitled to receive: (i) the cash
value of the shares plus accrued interest; or
(ii) the common stock at a price of $.75 per
share.
REGISTRATION RIGHTS Pursuant to a Registration Rights Agreement,
we agreed to filed a registration statement
with the SEC, and to use our best efforts to
have the registration statement declared
effective as soon as possible. In order to
register the Series A Preferred Stock and
shares of our common stock issuable upon the
conversion of the Series A Preferred Stock
and Warrants.
WARRANTS
EXERCISE PERIOD Beginning twelve (12) months after the
financing closing date and expiring
forty-eight (48) months after the financing
closing date.
EXERCISE PRICE $1.25 per share. The exercise price and the
number of shares of our common stock that may
be purchased upon exercise of the Warrants
are subject to certain adjustments, including
among other things,
o a stock dividend, subdivision,
combination or reclassification of our
common stock,
o the issuance of rights, options or
warrants to all holders of our common
stock, or
o any issuance of securities at a per
share selling price less than the
exercise price, as adjusted (with
certain exceptions)
CASHLESS EXERCISE The Warrants may be exercised, in whole or in
part, on a cashless basis.
Our board of directors believes that it is in our best interest to engage
in the private placement. If this Proposal is approved by the Company's
stockholders, its Board of Directors will be authorized to finalize all aspects
of the private placement, including its final terms and conditions. There can be
no assurance that the private placement will be consummated, and, if it is not,
the Company will be required to seek other financing, the availability and terms
of which are uncertain, as described above.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED PRIVATE
PLACEMENT AND THE ISSUANCE OF THE SECURITIES IN CONNECTION WITH THE PRIVATE
PLACEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information about shares of our Common Stock
owned as of the Record Date by each person known by us to own beneficially more
than five percent of GCAP's Common Stock, each of GCAP's officers and directors,
and all of GCAP's officers and directors as a group.
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 the Record Date,
[3,640,837] shares of voting stock were outstanding, consisting solely of shares
of our Common Stock.
Name and Address of Position(s) Held Amount and Percentage
Beneficial Owner (1) Nature of (%) of
Beneficial Class
Ownership
Martin A. Sumichrast (2) Chairman of the Board,
President, Chief Executive 771,250 20.9%
Officer and Director
Kevin D. McNeil (3) Executive Vice President, 150,019 4.1%
Secretary, Treasurer and
Chief Financial Officer
Dr. Lawrence Chimerine (4) Director 8,125 *
Michael Sumichrast, Ph.D. (4) Director 7,425 *
Paul F. McCurdy (5) Director 3,750 *
Frank Devine (5) Director 3,750 *
Reid Breitman (6) 491,875 13.5%
General Partners Beteiligungs 282,125 7.7%
125511 Canada Inc. and David 195,312 5.4%
Geller (7)
Entities affiliated with 195,312 5.4%
Michael Zunenshine (8)
All Executive Officers 944,319 25.3%
and Directors as a Group
(6 persons)
_______________
* Less than 1 percent.
(1) Except as otherwise noted, the address for all stockholders listed above is
c/o Global Capital Partners Inc., 6000 Fairview Road, Suite 1410, Charlotte,
North Carolina 28210.
(2) Includes (i) 75,000 shares of common stock owned by Belle Holdings, Inc., a
Nevada corporation of which Mr. Sumichrast is sole officer, director and
stockholder, (ii) 18,750 shares of common stock issuable upon the exercise of
options that are exercisable within 60 days of the Record Date, (iii) 37,500
shares of common stock issuable upon the exercise of warrants that are
exercisable within 60 days of the Record Date, and (iv) 490,000 shares of common
stock as to which Mr. Sumichrast has shared voting power. Mr. Sumichrast
disclaims beneficial ownership of these 490,000 shares.
(3) Includes 12,500 shares of common stock issuable upon the exercise of options
that are exercisable within 60 days of the Record Date and 14,395 shares of
common stock issuable upon the exercise of warrants that are exercisable within
60 days of the Record Date.
(4) Includes 2,500 shares of common stock issuable upon the exercise of options
that are exercisable within 60 days of the Record Date.
(5) Includes 1,250 shares of common stock issuable upon the exercise of options
that are exercisable within 60 days of the Record Date.
(6) Includes 490,000 shares of common stock indirectly owned through Corona
Corp., a corporation of which Mr. Breitman is sole stockholder, director and
officer.
(7) Based on information contained in Schedule 13G filed jointly by 125511
Canada Inc. and David Geller on June 12, 2001. 125511 Canada Inc. and David
Geller have shared voting and dispositive power with respect to all 195,312
shares. The principal business address of 125511 Canada Inc. and David Geller is
78 Lynwood, Unit 2, Toronto, Ontario M441K4.
(8) Based on information contained in Schedule 13G filed jointly by Bellcourt
Investments Inc., Beaufort Inc. and Michael Zunenshine. Bellcourt Investments
has shared voting and dispositive power with respect to 156,250 shares, Beaufort
Inc. has shared voting and dispositive power with respect to 39,062 shares and
Michael Zunenshine has shared voting and dispositive power with respect to all
195,312 shares. The principal business address of Bellcourt Investments,
Beaufort Inc. and Michael Zunenshine is 6500 Trans Canada Highway, Suite 210,
St. Laurent, Quebec H4T1X4.
OTHER INFORMATION. The presence, in person or by proxy, of stockholders
holding a majority of the outstanding shares of Common Stock entitled to vote at
the meeting is necessary to constitute a quorum for the transaction of business.
REQUIRED VOTE. The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock at the meeting in person or by proxy is
required for the approval of the private placement.
Only those votes cast for or against a proposal are used in determining the
results of a vote.
Abstentions and broker nonvotes are each included for purposes of
determining the presence or absence of a sufficient number of shares to
constitute a quorum. With respect to the approval of any particular proposal,
abstentions are considered present at the meeting, but since they are not
affirmative votes for the proposal they will have the same effect as votes
against the proposal. Broker nonvotes, on the other hand, are not considered
present at the meeting for the particular proposal for which the broker withheld
authority to vote.
SOLICITATION OF PROXIES GENERALLY. In addition to the solicitation of
proxies by mail, officers or other employees without extra remuneration may
solicit proxies by telephone or personal contact. We will request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
beneficial owners of shares of Common Stock and will pay such persons for
forwarding such material.
COSTS. All costs for the solicitation of proxies by the Board, anticipated
to be approximately $10,000, will be borne by us.
LIST OF STOCKHOLDERS ENTITLED TO VOTE. A list of stockholders entitled to
vote at the meeting will be available for examination by stockholders during
ordinary business hours 10 days prior to the meeting at GCAP's principal
executive office at 6000 Fairview Road, Suite 1410, Charlotte, North Carolina
28210.
GLOBAL CAPITAL PARTNERS INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS
PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION
OTHERWISE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1.
The undersigned hereby appoints each of Martin A. Sumichrast and Kevin D.
McNeil as Proxies, with the full power of substitution, and hereby authorizes
them to represent and vote, as designated on the reverse hereof, all shares of
Common Stock of Global Capital Partners Inc. held of record by the undersigned
as of October 29, 2001, at the Special Meeting of Stockholders to be held on
November 20, 2001, or any adjournment thereof, upon all such matters as may
properly come before the Meeting.
[X] Please mark your votes as in If you plan to attend the
this example. Special Meeting, place an
X in this box. [ ]
1. PROPOSAL TO APPROVE PROPOSED PRIVATE PLACEMENT AND ISSUANCE OF SECURITIES IN
CONENCTION WITH THE PROPOSED PRIVATE PLACEMENT
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. In their discretion upon such other business as may properly come before the
Special Meeting or any postponement or adjournment thereof.
SIGNATURE:______________________________ DATE: _______________
SIGNATURE:______________________________ DATE: _______________
NOTE: Please sign exactly as name or names appear on stock certificate
as indicated hereon. Joint owners should each sign. When signing
as attorney, executor, administrator or guardian, please give
full title as such.
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STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY
CARD PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE
IF MAILED WITHIN THE UNITED STATES.
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