U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): August 8, 2002
GILMAN & CIOCIA, INC.
(Name of small business issuer in its charter)
Delaware 000-22996 11-2587324
(State or jurisdiction Commission (I.R.S.Employer
of incorporation or file Identification
organization) number No.)
1311 Mamaroneck Avenue, White Plains, NY 10602
(Address of principal executive offices) (Zip Code)
(914) 397-4829
(Issuer's Telephone Number, Including Area Code)
ITEM 5. OTHER EVENTS.
(1) Gilman + Ciocia, Inc. reaches agreement with shareholder group.
On August 8, Gilman + Ciocia, Inc. (the "Company") reached an agreement with a
group of stockholders that was soliciting consents to withdraw the Consent
Solicitation the group had filed with the SEC. Under the terms of the
agreement, the Company agreed to adopt in modified form the resolutions proposed
in the Consent Solicitation.
(2) Gilman + Ciocia, Inc. enters into buyout agreement with current management.
On August 8, 2002, the Company entered into an agreement granting an option to a
group of current management, led by Thomas Povinelli and David Puyear, to leave
the Company along with employees who wish to join them. Under the terms of the
option, the group may purchase up to $25,000,000 of total tax and financial
planning revenue, generated by up to 70 of the Company's current locations. If
the full $25,000,000 is purchased, the management group will pay the Company
approximately $7,000,000, including assumption of $2,000,000 in debt. Fifty
percent of the purchase price will be paid at or within 90 days of the closing
along with the assumption of debt. The balance will be paid in cash over a
future period of time yet to be determined.
The Company also agreed to appoint Michael Ryan as the President of the Company,
effective immediately. Thomas Povinelli will continue to be the Chief Executive
Officer for the next 45 days as the Company completes the transition. Mr.
Povinelli and Mr. Puyear will resign from the Company in 45 days. Mr. Ryan will
remain as President and will be appointed Chief Executive Officer when Mr.
Povinelli resigns.
A copy of the agreement (without appendices) is annexed hereto as Exhibit 1.
(3) Transaction with Camden Partners Strategic Fund II-A, L.P. and Camden
Partners Strategic Fund II-B, L.P. not to go forward.
As reported in the Company's 8K filed on July 15, 2002, the Company had entered
into a confidential Proposed Terms of Investment with Camden Partners Strategic
Fund II-A, L.P. and Camden Partners Strategic Fund II-B, L.P. with respect to
the contemplated issuance by the Company of up to $3,240,000 of Series A
Convertible Preferred Stock. This transaction will not be closing.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
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1 Agreement with respect to management buyout.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: August 9, 2002
GILMAN & CIOCIA, INC.
By:/s/ Thomas Povinelli
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Thomas Povinelli
Chief Executive Officer
(authorized signatory)