Fagenson, Klein and Riley--too close for comfort!
National Holdings' revised Letter of Intent with B. Riley Financial may constitute a conflict of interest, and the exclusivity clause may provoke CB Pharma Acquisition Corp. (and others) to look more closely at the relationships that have existed over the past several years. First, it is good to know how many of NHLD's 12.5 million outstanding shares are owned by Fagenson, Klein and Riley:
NHLD shares owned, excluding options (December 10, 2015):
Fagenson – 965,802
Klein – 513,503 ($3.09/share average cost)
Riley – 604,114 ($4.80/share average cost)
In the interest of providing full disclosure on the part of Fagenson, Riley and Klein, below is a chronological look within National Holdings Corp., followed by Mark Klein and Bryant Riley relationship outside of NHLD. Please note the dates in parentheses.
Fagenson, Klein and Riley (also National Securities Growth Partners (NSGP) included all three as partners) relationships with NHLD:
Klein - Security Purchase agreement with NHLD - $100,000 Series C Preferred Stock (July 12, 2010).
Fagenson – Independent Contractor Agreement with National Securities (February 27, 2012)
Fagenson – Transferred Fagenson & Co. brokerage operations to NHLD’s National Securities. (March 1, 2012)
NSGP Security Purchase agreement with NHLD–multi-million Convertible Notes and Convertible Preferred (March 30, 2012)
NSGP members become Directors of NHLD (March 30, 2012)
NSGP – Additional $1 million financing with NHLD (September 5, 2012)
Riley – Additional $1 million with NHLD(September 5, 2012)
Klein and Fagenson become Co-Chairmen of NHLD (September 5, 2012)
Riley resigns as Director of NHLD (October 29, 2012)
Klein becomes CEO of NHLD (January 25, 2013)
Klein resigns as CEO and Co-Chairman of NHLD (December 31, 2014)
Fagenson becomes CEO of NHLD(December 31, 2014)
Klein resigns as Director of NHLD (March 31, 2015)
B. Riley Financial, Inc. executes a Letter of Intent with NHLD to acquire NHLD for $3.25 (November 30, 2015)
--It includes a 1,538,462 newly issued stock subscription and an exclusivity period.
Mark D. Klein:
(note: Alternative Asset Management Acquisition Corp/Great American Group, Inc (GAG) acquired B. Riley entities and changed its name to B. Riley Financial, Inc.)
Alternative Asset Management Acquisition Corp. (AAMAC) (formed January 26, 2007 as blank check company)
Chief Executive Officer, President and a Director of AAMAC, 9.4% owner; 1.9% after IPO; <1% after combination with GAG
Details:
Hanover Group Acquisition Corp (formed January 26, 2007)
Hanover-STC Acquisition Corp. (name change on February 22, 2007)
Alternative Asset Management Acquisition Corp. (name change on July 6, 2007)
Alternative Asset Management Acquisition Corp. ($402 million IPO August 7, 2007)
Agreed to acquire Halcyon Asset Management LLC (March 12, 2008)
Terminate Purchase Agreement with Halcyon Asset Management LLC (June 23, 2008)
Great American Group Inc. (GAG) (formed May 7, 2009 as a subsidiary of Alternative Asset Management Acquisition Corp., surviving entity after combination with Great American Group, LLC)—Klein CEO, President and Director (May 7, 2009)
Combine with private Great American Group, LLC., which was formed on May 7, 2009 (July 31, 2009)
Klein resigned as CEO and President GAG. (July 31, 2009)
Klein on Initial Board of Directors of GAG (July 31, 2009)
Exempt offering of GAG stock to Klein, Riley, et.al. (October 9, 2013)
Great American Group Inc. acquired B. Riley entities and changed name to B. Riley Financial, Inc. (June 18, 2014)
Resigned as Director of B. Riley Financial, Inc. (August 22, 2014)
B. Riley Financial, Inc. acquired MK Capital Advisors, LLC from Klein (February 2, 2015)
Klein hired by B. Riley Financial, Inc. (February 2, 2015)
Note: Mark Klein’s wife works for B. Riley Financial, Inc.
Bryant R. Riley (RILY shares owned—3,983,006- December 2015):
B. Riley Financial, Inc.
Chairman and Chief Executive Officer
Great American Group Inc. (formed May 7, 2009 as a subsidiary of Alternative Asset Management Acquisition Corp., surviving entity after combination with Great American Group, LLC)
Director of Great American Group, Inc. (September 21, 2009)
less than 1% owner after combination; July 31, 2009—89,666 shares
Exempt offering of Great American Group Inc. stock to Klein, Riley, et.al. (October 9, 2013)
Great American Group Inc. acquired B. Riley entities (June 18, 2014)
Became Chief Executive Officer and Chairman of Great American Group, Inc. following the initial closing of the Acquisition (June 2014)
