Replies to post #221 on National Holdings Corporation (NHLD)

[glass99]

B.Riley may acquire NHLD someday, but not today.

B. Riley has now formally acknowledge its offer to acquire NHLD is too weak for NHLD to considered it. However, RILY will continue to file Form 13D as a 5% owner because it may acquire NHLD in the future.

Prior to the Letter of Intent between B. Riley and National Holdings, neither Mark Klein nor Bryant Riley were required to filed a Form 13D because each of them owned less than 5% of NHLD. However, today B.Riley said, "[RILY] may in the future explore a potential acquisition of [NHLD] and engage in discussions with the Board of Directors and management of [NHLD] regarding such a transaction" and RILY will therefore, continue to file Form 13D.



See:

http://www.sec.gov/Archives/edgar/data/1023844/000101968716004923/briley_sc13da-012216.htm

"As previously disclosed in the initial Schedule 13D, effective November 30, 2015, BRF entered into a Letter of Intent with the Issuer with respect to a potential acquisition of the Issuer (the “LOI”). On January 25, 2016, BRF notified the Issuer that it has withdrawn its proposal to acquire the Issuer under the LOI and has terminated its discussions with the Board of Directors and management to acquire the Issuer pursuant to the terms set forth in the LOI. The Reporting Persons may in the future explore a potential acquisition of the Issuer and engage in discussions with the Board of Directors and management of the Issuer regarding such a transaction."


Also, on December 10, 2015, NHLD said:

National Holdings Corporation (NHLD) ("National Holdings" or the "Company"), a full-service investment banking and asset management firm, commented on the 13D filed today by B. Riley Financial, Inc., wherein that firm disclosed an ownership interest in National Holdings and an unsolicited $3.25 per share stock for stock acquisition offer. Also disclosed in the filing was a Letter of Intent ("LOI") signed by the two firms on November 30, 2015, whereby National granted B. Riley Financial, Inc. a 30-day exclusivity period.

"The Company agreed to the 30-day exclusivity period to give us time to evaluate the merits of the B. Riley offer, engage in negotiations and, as the proposal is for a stock transaction, to do our due diligence on B. Riley and allow them to complete their due diligence process on National," stated Robert Fagenson, National Holdings' Executive Chairman and Chief Executive Officer. "A committee of independent directors will evaluate this offer to determine what course of action it believes would be in the best interests of our shareholders. To assist them in this evaluation process, we have hired an outside advisor."

The execution of the letter of intent does not mean that a transaction with B. Riley will be consummated on the terms contemplated by the letter of intent or at all.

https://finance.yahoo.com/news/national-holdings-corporation-comments-b-232042503.html

[glass99]

A carefully worded press release by National Holdings.

On December 27, 2015, the exclusivity agreement with B. Riley Financial, Inc. (“Riley”) under its letter of intent expired pursuant to its terms. After the end of the exclusivity period, the Company commenced, and is continuing to hold discussions with, CB Pharma Acquisition Corp. (“CB”) with respect to its previously reported non-binding proposal to acquire all of the outstanding shares of common stock of the Company. On January 25, 2016, Riley notified the Company that it was withdrawing its previously reported acquisition offer and is terminating its discussions with the Company due, in part, to the Company’s decision not to grant an additional exclusive time period during which definitive agreements could be negotiated. However, Riley stated it may in the future explore a potential acquisition of the Company and engage in discussions with the Board and Management of the Company regarding such a transaction. The Company did not think it was in the best interests of the Company and its Shareholders to extend the exclusivity period with Riley in order that discussions with CB and other potential interested parties with respect to strategic opportunities could be held without any further restrictions.

http://www.sec.gov/Archives/edgar/data/1023844/000143774916024121/ex99-1.htm

http://www.sec.gov/Archives/edgar/data/1023844/000143774916024121/nhld20160126_8k.htm

[glass99]

Sale of National Holdings—Merger Discussion (Update 2)

On January 15, 2016, the first Merger Discussion Update (post #219) stated, "a Merger Agreement [should occur] in about a month or so."

As you read this second update, please keep in mind that National Holdings does NOT have a permanent CEO or President. Fagenson's employment agreement has now ended and may be extended only 30 days at a time. Goldwasser's employment agreement ends in 29 days, and it too may be extended only 30 days at a time. Also, remember that NHLD is no longer obligated to share any information with any of its "other potential interested parties" because there is no exclusivity agreement.

On February 29, 2016 NHLD said, "National and certain companies affiliated with officers and directors of CB Pharma continue to engage in discussions with respect to a business combination, [but not the blank check company, CB Pharma (CB), itself]. No assurances can be made at this time that such discussions, or discussions with any other potential interested parties, will result in an agreement as to a business combination."

Based on the Fairness Opinion prepared by NHLD's outside advisor, CB's original offer of $3.25 per share was not high enough. Unfortunately, CB, the blank check company, could not increase its offer because it did not have enough cash in its trust account. These machinations have caused a slight delay in NHLD's discussions with other interested parties, as well as the ensuing merger negotiations.

Here are the blank check company's specifics. NHLD said it was reluctance to enter into a transaction with CB as a result of some of the restrictions and risks inherent in dealing with a publicly-traded special purpose acquisition company. These "restriction and risks" centered around CB's inability to get more cash. CB's cash balance in its trust fund is equal to less than $3.50 per share of NHLD. While, it is possible for CB to stretch its offer price to as high as $6.75 per share of NHLD, this would assume half of NHLD's 12.5 million outstanding shares would actually be exchanged for CB stock rather than cash, which is not likely.

At this point, NHLD's Board recognizes that time is of the essence, and with its Fairness Opinion in hand, an agreement should be consummated sooner rather than later. NHLD's merger announcement will coincide with the signing of the FINAL Merger Agreement.