UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE
14C
Information
Statement Pursuant to Section 14(c)
of the
Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
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Preliminary Information Statement
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Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
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Definitive Information Statement
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Kaspien
Holdings Inc.
(Name of Registrant as Specified
in its Charter)
Payment of Filing Fee (Check all
boxes that apply):
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) of
Schedule 14A (17 CFR 240.14a-101) per Item 1 of this Schedule and
Exchange Act Rules 14c-5(g) and 0-11
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KASPIEN HOLDINGS INC.
2818
N. Sullivan Road, Suite 130
Spokane Valley, WA 99216
855-300-2710
NOTICE OF ACTION BY WRITTEN CONSENT OF
HOLDERS OF A MAJORITY OF THE OUTSTANDING VOTING STOCK
WE ARE NOT
ASKING YOU FOR A PROXY
AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
Dear Shareholders:
This Notice and the accompanying Information Statement are
being furnished to the holders (“Shareholders”) of shares of the
common stock, par value $0.01 per share (the “Common Stock”), of
Kaspien Holdings Inc., a New York corporation (the “Company”). The
Board of Directors of the Company (the “Board”) is not soliciting
your proxy and you are requested not to send us a proxy. The
purpose of the Information Statement is to notify you that the
Company has received the written consents, dated March 8, 2022 and
April 28, 2022 (collectively, the “Written Consent”), from holders
of shares of Common Stock representing approximately 55.3% of the
total issued and outstanding shares of voting stock of the Company
approving the actions described in the accompanying Information
Statement.
We are furnishing this Notice and the accompanying Information
Statement solely for the purpose of informing our Shareholders of
the actions taken by the Written Consent before such actions become
effective in satisfaction of the notice requirements of Section 14C
of the Securities Exchange Act of 1934, as amended, the rules
promulgated by the U.S. Securities and Exchange Commission
thereunder, and Section 615 of the New York Business Corporation
Law.
This is not a notice of a special
meeting of Shareholders, and no Shareholder meeting will be held to
consider the matters described herein.
This Notice and the accompanying Information Statement are
first being sent to Shareholders on or about ___, 2022.
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By order of the Board of Directors,
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Edwin J. Sapienza,
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Secretary
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___, 2022
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KASPIEN HOLDINGS INC.
2818
N. Sullivan Road, Suite 130
Spokane Valley, WA 99216
855-300-2710
INFORMATION STATEMENT
___,
2022
WE ARE NOT
ASKING YOU FOR A PROXY
AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
GENERAL
INFORMATION
In this Information Statement we refer to Kaspien Holdings
Inc., a New York corporation, as the “Company,” “we,” “us,” or
“our.” This Information Statement is being furnished by the board
of directors of the Company (the “Board”), to inform the holders
(“Shareholders”) of our common stock, par value $0.01 per share
(the “Common Stock”), as of March 1, 2022, of actions
(collectively, the “Actions”) approved by resolutions of the Board
dated March 3, 2022 and by the written consents dated March 8, 2022
and April 28, 2022 (collectively, the “Written Consent”) of holders
(the “Consent Holders”) of shares of Common Stock representing
approximately 55.3% of the total issued and outstanding shares of
voting stock of the Company. This Information Statement contains a
brief summary of the material aspects of the Actions approved by
the Board and the Consent Holders.
May
Shareholders Act by Written Consent?
Section 615 of the New York Business Corporation Law (the
“NYBCL”) states that, if the Company’s certificate of incorporation
(the “Certificate of Incorporation”) so provides, the Company’s
Shareholders may approve an action by written consent signed by the
holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted. Our Certificate of Incorporation provides
that any action permitted to be taken by the Shareholders may be
taken without a meeting by written consent, signed by holders of
not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
of the Company’s stock entitled to vote thereon were present and
voted.
What Actions
Were Taken by Written Consent?
Kaspien Inc (f/k/a Etailz Inc.) (“Kaspien”), a wholly-owned
subsidiary of the Company, entered into a Subordinated Loan and
Security Agreement dated as of March 30, 2020 by and among the
Company, Kaspien and the other parties thereto, as amended on
September 16, 2021 and March 2, 2022 (the “Credit Agreement”). In
connection with the Credit Agreement, the Company agreed to issue
to Alimco Re Ltd. a warrant to purchase from the Company up to
320,000 shares of the Common Stock (the “Warrant Shares”) at a
price of $0.01 per Warrant Share, subject to adjustment in
accordance with the terms thereof (the “Warrant”).
NASDAQ Listing Rule 5635(b) provides that shareholder approval
is required prior to the issuance of securities when the issuance
will result in a change of control of the Company. NASDAQ Listing
Rule 5635(d) provides that shareholder approval is required prior
to certain transactions involving the issuance by the Company of
securities exercisable for common stock, which alone or together
with certain other sales equals 20% or more of the common stock or
20% or more of the voting power outstanding before the issuance.
The Company wished to seek shareholder approval in order to satisfy
the shareholder approval requirements of NASDAQ Listing Rules
5635(b) and 5635(d).
The Consent Holders have approved by written consent the
following action:
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the issuance of the Warrant and the Warrant Shares upon
exercise of the Warrant in whole or in part (including any
additional shares of common stock issued pursuant to any
anti-dilution or other adjustment provisions set forth in the
Warrant), such that the shareholder approval requirements set forth
in NASDAQ Listing Rules 5635(b) and 5635(d) are satisfied (the
“Warrant Issuance Approval”).
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In addition, the Company wished to exclude the Warrant and Warrant Shares from
certain transfer restrictions intended to prevent an ownership
change that could substantially reduce tax benefits associated with
the Company’s net operating losses under Section 382 of the
Internal Revenue Code of 1986, as amended.
The Board has approved by resolution and the Consent Holders
have approved by written consent the following actions:
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the amendment of the Company’s certificate of incorporation
(the “Certificate of Incorporation”) to exclude the Warrant and Warrant Shares from
certain transfer restrictions intended to prevent an ownership
change that could substantially reduce tax benefits associated with
the Company’s net operating losses under Section 382 of the
Internal Revenue Code of 1986, as amended (the “Certificate
of Incorporation Amendment”); and
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the amendment of the Company’s bylaws (the “Bylaws”) to
exclude the Warrant and Warrant
Shares from certain transfer restrictions intended to prevent an
ownership change that could substantially reduce tax benefits
associated with the Company’s net operating losses under
Section 382 of the Internal Revenue Code of 1986, as
amended (the “Bylaws Amendment”).
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What is the
Purpose of this Information Statement?
This Information Statement and the accompanying Notice are
being furnished to our Shareholders solely for the purpose of
informing our Shareholders of the action taken by the Written
Consent of the Consent Holders in accordance with Section 14C of
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the rules promulgated by the U.S. Securities and Exchange
Commission (“SEC”) thereunder, and Section 615 of the NYBCL.
Section 14C of the Exchange Act and Regulation 14C promulgated
by the SEC thereunder require the Company to furnish to our
Shareholders an information statement describing any action taken
by written consent in lieu of a meeting of stockholders before such
action becomes effective. In connection with an action by written
consent, Section 615 of the NYBCL requires prompt notice of the
taking of such action to be given to the Shareholders who have not
consented in writing to such action.
Who is Entitled
to Notice?
Each outstanding share of Common Stock on the Record Date is
entitled to notice of the Actions to be taken pursuant to the
Written Consent. The close of business on March 1, 2022 is the
record date (the “Record Date”) for the determination of
Shareholders who are entitled to receive this Information
Statement. This Information Statement is being mailed on or about
___, 2022 to Shareholders of record as of the Record Date.
What Vote is
Required to Approve the Actions?
Each share of Common Stock entitles the holder to one vote. On
the Record Date, there were 2,492,568 shares of Common Stock issued
and outstanding. Pursuant to Section 615 of the NYBCL and our
Certificate of Incorporation, at least a majority of the voting
stock of the Company, or at least 1,246,285 shares of Common Stock,
are required to approve the Actions by written consent.
The Consent Holders are The Robert J. Higgins TWMC Trust;
RJHDC, LLC; Alimco Re Ltd.; AMIL of Ohio, LLC; Catherine C. Miller
Irrevocable Trust DTD 3/26/91; Catherine C. Miller Trust A-2;
Catherine C. Miller Trust A-3; Catherine Miller Trust C; Kimberley
S. Miller GST Trust DTD 12/17/1992; LIMFAM LLC; Lloyd I. Miller
Trust A-1; Lloyd I. Miller III Trust A-4; Lloyd I. Miller, III
Irrevocable Trust DTD 12/31/91; Lloyd I. Miller, III Revocable
Trust DTD 01/07/97; MILFAM I L.P.; MILFAM II L.P.; MILFAM III LLC;
Susan F. Miller; Kick-Start III, LLC; Kick-Start IV, LLC; Thomas C.
Simpson; and Kick-Start I, LLC. As of the Record Date, the Consent
Holders held 1,378,938
shares of Common Stock, or approximately 55.3% of the total voting
power of all outstanding voting stock. Pursuant to the Written
Consent, the Consent Holders have approved the Actions.
Therefore, no other Shareholder consents will be obtained in
connection with this Information Statement.
Do I have
Appraisal Rights?
Neither the NYBCL nor our Certificate of Incorporation or
Bylaws provide our Shareholders with appraisal rights in connection
with the Actions discussed in this Information Statement.
Manner of
Effecting the Actions
Pursuant to Rule 14c-2 under the Exchange Act, the earliest
date that the Actions can become effective is 20 calendar days
after this Information Statement is first sent to the Shareholders.
In addition, the Certificate of Incorporation Amendment will become
effective only upon the filing of the Certificate of Amendment of
Certificate of Incorporation reflecting the Certificate of
Incorporation Amendment with the New York Department of State.
Thus, each of the Warrant Issuance Amendment, the Certificate of
Incorporation Amendment and the Bylaw Amendment will become
effective on ___, 2022, which is 20 calendar days following the
date this Information Statement is first sent to the
Shareholders.
INTEREST OF
CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON
Directors Jonathan Marcus, Thomas
Simpson, and Michael Reickert are the chief executive officer of
Alimco Re Ltd. (“Alimco”), the managing member of Kick-Start III,
LLC and Kick-Start IV, LLC (“Kick-Start”), and a trustee of the
Robert J. Higgins TWMC Trust (the “Trust”), an affiliate of RJHDC,
LLC (“RJHDC” and together with Alimco and Kick-Start, “Related
Party Entities”), respectively.
On March 2,
2022, the Related Party Entities and the Company entered into a
second amendment to the Subordinated Loan and Security Agreement
dated as of March 30, 2020, as first amended on September 16, 2021
(the “Credit Agreement”), pursuant to which Alimco made a $5.0
million secured term loan (the “Loan”) to Kaspien with a scheduled
maturity date of March 31, 2024, interest accruing at the rate
fifteen percent (15.0%) per annum, compounded on the last day of
each calendar quarter by becoming a part of the principal amount of
the Loan, and secured by a second priority security interest in
substantially all of the assets of the Company and Kaspien. In
connection with the making of the Loan, the Company agreed to issue to
Alimco a warrant to purchase from the Company up to 320,000 shares
of the Common Stock (the “Warrant Shares”) at a price of $0.01 per
Warrant Share, subject to adjustment in accordance with the terms
thereof (the “Warrant”).
If the Warrant were exercised in
full:
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Alimco and its affiliated
entities would own approximately 27.2% of the outstanding Common
Stock, making them the largest shareholder group, and as a result
they would be able to significantly influence the outcome of most
actions requiring shareholder approval; and
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The Related Party Entities
collectively would own approximately 60.3% of the outstanding
Common Stock, and as a result they would be able to control the
outcome of nearly all actions requiring shareholder approval.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth
the beneficial ownership of Common Stock as of March 1, 2022 (or as
of the dates indicated therein), by each person known to us to be
the beneficial owner of more than 5% of our issued and outstanding
shares of Common Stock, each director and named executive
officer of the Company and all directors and executive officers as
a group. The numbers set forth in the table include shares that may
be acquired within 60 days of March 1, 2022, and all shares listed
in the table are owned directly by the named individuals, in each
case unless otherwise indicated therein. The Company believes that
the beneficial owners have sole voting and investment power over
their shares, except as otherwise indicated therein or as to shares
owned by spouses. Unless otherwise indicated therein, the address
for each person listed below is c/o Kaspien Holdings Inc., 2818 N.
Sullivan Road, Suite 130, Spokane Valley, WA 99216.
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Name
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Amount and Nature of
Beneficial
Ownership
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Percent of Class
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The Robert J. Higgins TWMC Trust
38 Corporate Circle
Albany, NY 12203
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713,986(1)
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25.3%
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Neil S. Subin
3300 South Dixie Highway, Suite 1-365
West Palm Beach, FL 33405
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769,938(2)
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27.2%
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Jonathan Marcus
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3,313(3)
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0.1%
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W. Michael Reickert
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7,263(4)
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0.3%
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Tom Simpson
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60,313(5)
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2.1%
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Brock Kowalchuk
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2,124(6)
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0.1%
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Edwin Sapienza
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10,749(7)
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0.4%
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All Directors and Executive Officers as a Group (5
persons)
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83,762
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3.0%
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(1) |
Based on Form 5, filed February
21, 2017, by The Robert J Higgins TWMC Trust. This excludes shares
beneficially owned by RJHDC, LLC, an affiliate of The Robert J
Higgins TWMC Trust, because The Robert J Higgins TWMC Trust
disclaims the existence of, and membership in, a “group” under
Section 13(d)(3) that may arise as a result of the Higgins Family’s
interest in both entities. The Robert J Higgins TWMC Trust
disclaims beneficial ownership of any shares owned by RJHDC, LLC
other than to the extent the Higgins Family may have a pecuniary
interest therein.
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Based on Schedule 13D, filed
March 9, 2022, on behalf of (i) Neil S. Subin (“Mr. Subin”); (ii)
MILFAM LLC; (iii) Alimco Financial Corporation (“Alimco”); (iv)
Alimco Re Ltd., a wholly-owned subsidiary of Alimco (“Alimco Re”);
(v) Jonathan Marcus (“Mr. Marcus”); (vi) AMIL Of Ohio, LLC; (vii)
Catherine C. Miller Irrevocable Trust dtd 3/26/91; (viii) Catherine
C Miller Trust A-2; (ix) Catherine C Miller Trust A-3; (x)
Catherine Miller Trust C; (xi) Kimberly S. Miller GST Trust dtd
12/17/1992; (xii) LIMFAM LLC; (xiii) Lloyd I. Miller Trust A-1;
(xiv) Lloyd I. Miller, III Trust A-4; (xv) Lloyd I. Miller, III
Irrevocable Trust dtd 12/31/91; (xvi) Lloyd I. Miller, III
Revocable Trust dtd 01/07/97; (xvii) MILFAM I L.P.; (xviii) MILFAM
II L.P.; (xix) MILFAM III LLC; and (xx) Susan F. Miller (such
persons, trusts and entities named in items (i) through (xx),
collectively, the “Reporting Persons”).
Some of the positions were
previously reported on a Schedule 13G filed by Mr. Subin on
December 31, 2018 with respect to securities held by certain
entities owned by or trusts for the benefit of the family of the
late Mr. Lloyd I. Miller, III (the “Miller Family”) and other
entities (such entities and trusts, the “Miller Entities”) and a
Schedule 13G filed by Alimco on February 13, 2019. Certain of the
Miller Entities hold approximately 85% of the outstanding shares of
common stock of Alimco. The Reporting Persons respectively disclaim
the existence of, and membership in, a “group” under Section
13(d)(3) that may arise as a result of the Miller Entities’
interests in Alimco. The Reporting Persons disclaim beneficial
ownership of any shares other than to the extent he, she or it may
have a pecuniary interest therein.
The amount set forth represents
(i) 1,750 shares of common stock owned by AMIL Of Ohio, LLC; (ii)
300 shares of common stock owned by Catherine C. Miller Irrevocable
Trust DTD 3/26/91; (iii) 200 shares of common stock owned by
Catherine C. Miller Trust A-2; (iv) 5,639 shares of common stock
owned by Catherine C. Miller Trust A-3; (v) 22,448 shares of common
stock owned by Catherine Miller Trust C; (vi) 300 shares of common
stock owned by Kimberley S. Miller GST Trust DTD 12/17/1992; (vii)
26,105 shares of common stock owned by LIMFAM LLC; (viii) 1,359
shares of common stock owned by Lloyd I. Miller Trust A-1; (ix)
25,686 shares of common stock owned by Susan F. Miller Spousal
Trust A-4; (x) 25,685 of common stock owned by Miller Family
Education and Medical Trust (xi) 300 shares of common stock owned
by Lloyd I. Miller, III Irrevocable Trust DTD 12/31/91; (xii)
59,490 shares of common stock owned by Lloyd I. Miller, III
Revocable Trust DTD 01/07/97; (xiii) 3,128 shares of common stock
owned by MILFAM I L.P.; (xiv) 123,619 shares of common stock owned
by MILFAM II L.P.; (xv) 2,274 shares of common stock owned by
MILFAM III LLC; (xvi) 1,801 shares of common stock owned by Susan
F. Miller, (xvii) 149,854 shares of common stock owned by Alimco
and (xviii) 320,000 shares that may be acquired within 60 days of
March 1, 2022 pursuant to exercise of the Warrant. Mr. Subin is the
President and Manager of MILFAM LLC, which serves as manager,
general partner, or investment advisor of a number of the foregoing
entities formerly managed or advised by the late Lloyd I. Miller,
III, and he also serves as trustee of a number of a number of the
foregoing trusts for the benefit of the family of the late Mr.
Lloyd I. Miller, III, consequently, he may be deemed the beneficial
owner of the shares specified in clauses (i) through (xvi) of the
preceding sentence. Mr. Subin disclaims beneficial ownership of any
shares other than to the extent he may have a pecuniary interest
therein.
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(3) |
Includes 313 shares that may be acquired within 60 days of
March 1, 2022.
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(4) |
Excludes 713,986 shares held in
the Robert J Higgins TWMC Trust of which Mr. Reickert is a
Trustee.
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Includes 1,063 shares that may be
acquired within 60 days of March
1, 2022.
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(5) |
Excludes 25
shares held by the wife of Tom Simpson. Also excludes 9,737 shares
held by Kick Start, LLC, 14,041 shares held by Kick Start III, LLC,
9,360 shares held by Kick Start IV, LLC and 23,879 shares held by
WIN Partners. Mr. Simpson holds an interest, manages and has
voting control of Kick Start, LLC, Kick Start III, LLC Kick
Start IV, LLC and WIN Partners. Includes 313 shares that may be
acquired within 60 days of March
1, 2022.
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(6) |
Includes 2,214 shares that may be acquired within 60 days of
March 1, 2022.
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(7) |
Includes 9,249 shares that may be acquired within 60 days of
March 1, 2022.
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INFORMATION
STATEMENT COSTS
The Company will bear the cost of delivering this Information
Statement, including the preparation, assembly and mailing of the
Information Statement, as well as the cost of forwarding this
Information Statement to the beneficial owners of our Common Stock.
We will reimburse brokerage firms and other custodians, nominees,
and fiduciaries for their ordinary and necessary expenses in
forwarding this Information Statement to the beneficial owners of
our Common Stock.
ADDITIONAL
INFORMATION
The Company is subject to the information and reporting
requirements of the Exchange Act and, in accordance with the
Exchange Act, the Company files periodic reports, documents and
other information with the SEC relating to its business, financial
statements and other matters. The Company’s filings with the SEC
are available to the public on the SEC’s website, www.sec.gov, and
on the Company’s website, www.kaspien.com. Our reports filed by the
Company under the Exchange Act are also available to any
Shareholder at no cost upon request by writing to: Kaspien Holdings Inc.,
Attention: Treasurer, 2818 N. Sullivan Road, Suite 130,
Spokane Valley, WA 99216, and a copy will be sent to you free
of charge.
HOUSEHOLDING OF
INFORMATION STATEMENT
The SEC has adopted rules that
allow a company to deliver a single information statement to an
address shared by two or more of its shareholders. This method of
delivery, known as “householding,” permits us to realize
significant cost savings, reduces the amount of duplicate
information shareholders receive, and reduces the environmental
impact of printing and mailing documents to our shareholders. Under
this process, certain Shareholders will receive only one copy of
our Information Statement until such time as one or more of these
Shareholders notifies us that they want to receive separate copies.
Any Shareholders who object to or wish to begin householding may
notify us by sending a written request to Edwin J. Sapienza,
Secretary, Kaspien Holdings Inc., 2818 N. Sullivan Road, Suite 130,
Spokane Valley, WA 99216, or by telephone at 855-300-2710.
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By order of the Board of Directors,
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Edwin J. Sapienza,
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Secretary
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___, 2022
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