Current Report Filing (8-k)
June 23 2017 - 4:15PM
Edgar (US Regulatory)
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):
June 23, 2017
CROSSROADS CAPITAL, INC.
(Exact name of registrant as specified
in its charter)
Maryland
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000-53504
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26-2582882
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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128
N. 13th Street, #1100
Lincoln,
Nebraska 68508
(Address
of principal executive offices and zip code)
Registrant’s
telephone number, including area code:
(402) 261-5345
Check
the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐
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))
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01
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Entry
into a Material Definitive Agreement
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On
June 23, 2017, Crossroads Capital, Inc. (the “Company”) and each of Andrew Dakos, Phillip Goldstein and Gerald Hellerman,
the initial trustees (the “Trustees”) of Crossroads Liquidating Trust, a Maryland statutory trust (the “Liquidating
Trust”), executed the Liquidating Trust Agreement (the “Liquidating Trust Agreement”) in connection with the
conversion of the Company into the Liquidating Trust (the “Conversion”) pursuant to the Company’s Plan of Liquidation
(the “Plan of Liquidation”) for the sole purpose of liquidating its assets and distributing the proceeds to the holders
of the beneificial interests in the Liquidating Trust.
The
Trustees will be entitled to receive compensation for their services as Trustees comparable to the fees paid by the Company to
its independent directors, consisting of reasonable meeting fees or quarterly or annual retainer fees or a combination of such
fees, as determined by the Trustees. Each Trustee will be reimbursed from the Trust Assets for all expenses reasonably incurred,
and appropriately documented, by such Trustee in the performance of that Trustee’s duties. It is estimated that Trustees’
fees will total approximately $60,000 in the Liquidating Trust’s first year.
The
Liquidating Trust will terminate upon payment to the holders of the beneficial interests in the Liquidating Trust (“Trust
Units”) of all of the Liquidating Trust’s assets and in any event upon the third anniversary of the effectiveness
of the Conversion. The life of the Liquidating Trust may, however, be extended to more than three years if the Trustees of the
Liquidating Trust then determine that an extension is reasonably necessary to fulfill the purposes of the trust.
The
Trustees will be authorized to engage the services of other professionals or service organizations to assist it in managing the
Liquidating Trust’s affairs.
Under
the Liquidating Trust Agreement, Trust Units will not be transferable or assignable, except for certain exceptions described in
the Liquidating Trust Agreement. The Trust Units which will not be certificated and will not be listed on any exchange or quoted
on any quotation system. The Liquidating Trust Agreement provides that neither the Trustees nor anyone associated with the Liquidating
Trust may take any action to facilitate or encourage any trading in Trust Units.
The
Liquidating Trust’s activities will be specifically limited to conserving, protecting, transferring and selling its assets
and distributing the proceeds therefrom, including holding such assets for the benefit of the holders of Trust Units, enforcing
the rights of the holders of Trust Units, temporarily investing such proceeds and collecting income therefrom, providing for the
liabilities of the Liquidating Trust, making liquidating distributions to the holders of Trust Units, and taking such other actions
as may be necessary to conserve and protect the assets of the Liquidating Trust. Liquidating distributions will be made at such
times as determined by the Trustees in their sole discretion, but consideration of potential liquidating distributions shall occur
no less frequently than annually, and in any event within a reasonable period of time following the disposition of the Liquidating
Trust’s assets. The Liquidating Trust will remain subject to the restrictions under the Investment Company Act of 1940 from
engaging in transactions with affiliated parties, except under certain circumstances.
The
Liquidating Trust will file with the U.S. Securities and Exchange Commission (the “SEC”) annual reports showing the
assets and liabilities of the Liquidating Trust at the end of each calendar year and its receipts and disbursements for the period.
The annual reports will also describe the changes in the Liquidating Trust’s assets during the reporting period and the
actions taken by the Trustees during the period. The financial statements contained in such reports will be prepared in accordance
with generally accepted accounting principles and will be reviewed by the Liquidating Trust’s independent registered public
accounting firm; however, it is not contemplated that the financial statements will be audited by independent
registered public accountants. The Liquidating Trust will file with the SEC a current report under cover of Form 8-K whenever
an event occurs for which Form 8-K requires such report to be filed for the Liquidating Trust or whenever, in the opinion of the
Trustees, any other material event relating to the Liquidating Trust’s assets has occurred.
The
foregoing summary does not purport to be complete and is qualified in its entirety by the Liquidating Trust Agreement attached
hereto as Exhibit 10.1.
Item
3.03
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Material
Modifications to Rights of Security Holders
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On
June 23, 2017, the stockholders approved the Plan of Liquidation and, pursuant to the Plan of Liquidation, the Company was converted
into the Liquidating Trust by filing of Articles of Conversion and a Certificate of Trust with the State Department of Assessments
and Taxation of the State of Maryland. Upon the effectiveness of the Conversion:
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●
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Each stockholder
of the Company will receive one Trust Unit for each share of common stock held by such stockholder on the date of Conversion;
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●
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Trust Units
will generally not be transferable or assignable, except by will, intestate succession, or operation of law;
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●
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The Trust
Units will not be listed, there will be no trading and no market quotations will be available;
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●
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Trust Unit
holders’ ability to make claims against the Liquidating Trust will be limited, and Trust Unit holders will no longer be
able to bring claims against the Trust as a stockholder;
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●
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Management
of the Liquidating Trust will be solely in the hands of the Trustees, which can only be removed upon the approval of the holders
of two-thirds of the Trust Units;
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●
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Only holders
of a majority of Trust Units may take action under the Liquidating Trust to call a meeting of beneficiaries, unlike the Company,
which must hold a stockholders’ meeting every year;
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●
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If a Trustee
is removed or resigns, holders of a majority of Trust Units shall constitute a quorum at a meeting of beneficiaries and a successor
Trustee will be appointed by the beneficiaries holding Trust Units representing a majority of the total Trust Units present at
the meeting, in person or by proxy;
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●
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Holders of
a majority of the Trust Units may vote to amend the Liquidating Trust Agreement, provided that no amendment may lower the supermajority
voting requirements with respect to removal of a Trustee, increase the potential liability of the Trustees, permit the Trustees
to engage in any prohibited activities, affect the holders of Trust Units’ rights to receive their pro-rata share of property
held by the Liquidating Trust at the time of final distribution, or jeopardize the status of the Liquidating Trust as a “liquidating
trust” for federal, state or local income tax purposes; and
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●
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Holders of
Trust Units will not enjoy many of the protections afforded to them as the Company’s stockholders, including the requirements
related to the Company’s prior status as an “investment company” under the Investment Company Act of 1940.
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Certain
other rights of the Company’s stockholders changed as a result of the Conversion, as described
in the Company’s definitive proxy statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on April
17, 2017 (the “Definitive Proxy Statement”), under the section entitled “Proposal 3 – Authorize Us to
Liquidate and Dissolve Pursuant to the Plan”, which description is incorporated in its entirety herein by reference.
The
foregoing descriptions of the Plan of Liquidation, Articles of Conversion, Certificate of Trust, and Liquidating Trust Agreement
do not purport to be complete and are qualified in their entirety by reference to the full text of the Plan of Liquidation, Articles
of Conversion, Certificate of Trust, and Liquidating Trust Agreement, copies of which are filed as Exhibits 2.1, 3.1, 3.2 and
10.1, respectively, and incorporated herein by reference.
Item
5.03
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Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year
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The
information set forth under Item 3.03 above is incorporated herein by reference.
Item
5.07.
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Submission
of Matters to a Vote of Security Holders
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Special
Meeting
The
Company’s special meeting of stockholders was originally called to order on June 2, 2017 and was adjourned in order to permit
the Company to voluntarily delist from NASDAQ and to begin the process of withdrawing the Company’s election to be regulated
as a business development company. The Company reconvened the special meeting on June 23, 2017 and stockholders authorized a Plan
of Liquidation to covert the Company into a liquidating trust for the purpose of liquidating and distributing the Company’s
assets. The results of the vote are as follows:
Votes
For
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Votes
Against
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Abstentions
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5,253,583
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215,985
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56,869
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On
June 23, 2017, the Company filed a Form N-54C with the U.S. Securities and Exchange Commission to withdraw its election under
Section 54(a) of the Investment Company Act of 1940 to be regulated as a business development company. The withdrawal was effective
immediately upon filing and acceptance of the Form N-54C with the U.S. Securities and Exchange Commission. Stockholders previously
approved the withdrawal on June 2, 2017.
The
Company currently anticipates that the Trustees will convene promptly following the Conversion and approve a cash distribution
of not less than $1.60 per share. In connection with this announcement, the Company will also disclose the liquidating distribution
deemed to have been received by stockholders for tax reporting purposes upon the effectiveness of the Conversion.
The
Company issued a press release dated June 23, 2017, which is attached hereto as Exhibit 99.1.
Item
9.01.
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Financial
Statements and Exhibits
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(d)
Exhibits
Exhibit
No.
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Description
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2.1
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Plan
of Liquidation, dated May 3, 2016
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3.1
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Articles of Conversion, as filed with the State Department of Assessments and Taxation of the State of Maryland on June 23, 2017
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3.2
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Certificate
of Trust, as filed with the State Department of Assessments and Taxation of the State of Maryland on June 23, 2017
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10.1
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Liquidating
Trust Agreement, dated June 23, 2017
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99.1
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Press
Release dated June 23, 2017
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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 hereunto duly authorized.
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CROSSROADS
CAPITAL, INC.
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Date:
June 23, 2017
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By:
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/s/
Ben H. Harris
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Ben
H. Harris
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President
and Chief Executive Officer
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EXHIBIT
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