UNITED STATES
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) April 25, 2007
Gilman + Ciocia, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-22996 11-2587324
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
11 Raymond Avenue, Poughkeepsie, New York 12603
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (845) 486-0900
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On April 25, 2007, Gilman + Ciocia, Inc. (the "Company") entered into an
Investor Purchase Agreement (the "Purchase Agreement") with Wynnefield Small Cap
Value Offshore Fund, Ltd., Wynnefield Partners Small Cap Value, L.P., Wynnefield
Partners Small Cap Value, L.P.I and WebFinancial Corporation (the "Purchasers").
Pursuant to the Purchase Agreement, the Purchasers agreed to purchase from the
Company 40,000,000 shares of the Company's common stock, par value $.01 per
share, at a price of $.10 per share (the "Purchase"). Upon the execution of the
Purchase Agreement, $4,000,000 was placed into escrow pending the closing of the
Purchase.
Prior to the Company executing the Purchase Agreement, the Board of Directors of
the Company appointed a Finance Committee comprised of two independent
directors. The Finance Committee prepared a written report to the Board of
Directors, which report recommended that the Company proceed with the
transaction. The Finance Committee negotiated the transaction with the
Purchasers on behalf of the Company.
The Purchase is contingent upon the satisfaction of several closing conditions,
including: stockholder approval of the Purchase; stockholder approval of an
increase in the authorized capital stock of the Company to 500,000,000 shares;
and the approval of the Purchase by Wachovia Bank, National Association, the
Company's senior lender. The closing must take place on or before October 31,
2007.
A definitive proxy statement will be filed to schedule a meeting of the
Company's stockholders. At the meeting, the stockholders will elect the
directors of the Company.
At the closing of the Purchase, the Company will repay $2,375,000 to Met Life
Insurance Company of Connecticut ("Met Life") in complete settlement of the
Company's loan with Met Life. The loan with Met Life has a present outstanding
balance of principal and accrued interest totaling approximately $6,697,000 The
closing is also conditioned upon the purchase of an additional 40,000,000 shares
(the "Additional Shares")of common stock at a price of $.10 per share in cash or
by the conversion of outstanding debt or other liabilities of the Company.
Purchasers may include officers, directors and employees of the Company, and
Prime Partners, Inc. ("Prime Partners"). Prime Partners is a holding company
owned in part by Michael P. Ryan, the President and Chief Executive Officer of
the Company and a member of the Company's Board of Directors.
In connection with the transactions contemplated by the Purchase, Prime
Partners, Michael Ryan and Ralph Porpora agreed to waive all existing
registration rights previously granted.
Prime Partners has agreed to (i) purchase, either by the conversion of debt or
in cash, the amount of the Additional Shares not otherwise purchased by the
Placement Purchasers up to an aggregate purchase price of $3,600,000; and (ii)
use its reasonable best efforts to ensure that the remaining Additional Shares
are purchased by other purchasers.
Item 9.01. Financial Statements and Exhibits
Exhibit 10.1 Investor Purchase Agreement (with Exhibits) dated April 25, 2007.
Exhibit 10.2 Waiver of Registration Rights Agreement dated April 25, 2007
executed by Prime Partners, Inc., Michael Ryan and Ralph Porpora pursuant to the
Investor Purchase Agreement.
Exhibit 10.3 Letter from Prime Partners, Inc. dated April 25, 2007 executed
pursuant to the Investor Purchase Agreement.
Exhibit 10.4 Executed Voting Agreement dated April 25, 2007.
SIGNATURES
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 hereunto duly authorized.
Gilman + Ciocia, Inc.
----------------------------------------
(Registrant)
Date: May 1, 2007
------------------------ /s/ Ted H. Finkelstein
----------------------------------------
Name: Ted H. Finkelstein
Title: Vice President and General Counsel