First Capital Investment Corporation (NASDAQ:FBIZ) Files An 8-K Termination of a Material Definitive Agreement
Item 1.02
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Termination of a Material Definitive Agreement. |
The information reported in Item 8.01 of this Current Report on
Form 8-K regarding notice of the termination of the Advisory
Agreement (as defined therein) is incorporated herein by
reference.
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Item 5.02 |
Departure of Directors or Certain Officers; |
The information reported in Item 8.01 of this Current Report on
Form 8-K regarding the resignation of certain members of First
Capital Investment Corporations (the Company) board of
directors (the Board), the resignation of the Companys
President and Chief Executive Officer, and the appointment of the
replacement Board members and President and Chief Executive
Officer, is incorporated herein by reference.
Concurrent with the Board resignations described in Item 8.01 to
this Current Report on Form 8-K, the remaining members of the
Board decreased the size of the Board from five members to three
members.
Biographical Information for New Members of the Board
The biographical information of Mr. Singal, Dr. Froehlich and Mr.
Grant, the new members of the Board, is set forth below:
Suneet Singal. Mr. Singal serves as the chief executive
officer of First Capital Real Estate Investments LLC
(FCREI), the chief executive officer, secretary and
chairman of the board of directors of First Capital Real Estate
Trust, Inc. (FCRETI), and as chief executive officer and
secretary of FCRETIs external advisor. He began his real estate
finance career in 2001 and formed FCREI in 2003. In 2006, Mr.
Singal merged a subsidiary of FCREI with a real estate lending
platform, and from 2006 to 2008, he grew the combined company to
over $1 billion per year in real estate loan originations, with
business in over 40 states.
From 2007 to 2011, Mr. Singal obtained entitlements for over a
dozen projects in California encompassing industrial, retail,
multifamily, senior assisted living, hospitality and mixed-use
asset types, with an aggregate value of over $250 million. In the
12 months from January 2013 to January 2014, Mr. Singal completed
the buildout and acquisition of retail units in addition to the
buildouts of multiple quick-service restaurant sites, which
altogether had an aggregate business and real estate value of
over $25 million. Additionally, in the 18 months from August 2013
to February 2015, Mr. Singal completed over nine hospitality
acquisitions and led the turnaround of several thousand
self-storage units, with an aggregate transaction value of over
$150 million.
Between May 2015 and December 2015, Mr. Singal owned and served
on the board of directors of Castle Mortgage Corp., an agency
approved mortgage bank that Mr. Singal acquired, repositioned and
sold.
As the chief executive officer of FCREI, Mr. Singal recently
launched a debt fund with a maximum offering of $200 million,
First Capital Income Fund I, LLC, and entered into a strategic
partnership with an institutional partner.
As chairman of the board and chief executive officer of FCRETI,
Mr. Singal has used his expertise in real estate asset selection
to increase FCRETIs assets under management significantly. Among
the assets acquired by FCRETI since Mr. Singal stepped in as
chairman and chief executive officer is a master plan development
project in Northern California that calls for the construction of
approximately 2400 residential units, 1 million square feet of
office and retail space, and a hotel. Mr. Singal was also
responsible for sourcing, through a partnership with the
Government of Antigua and Barbuda, a development project in
Antigua that calls for the development of two resorts on two
separate parcels of land introducing the new Citizen Investment
Program. Most recently Mr. Singal successfully negotiated the
acquisition of 2027 residential lots in California and a golf
course resort community in Baja Mexico.
Mr. Singal received a BA in Finance, with a concentration in
Investments from California State University at Sacramento and is
a licensed California Mortgage Broker.
The Company has determined that Mr. Singals extensive real estate
finance experience and experience founding and developing FCREI
has provided him with the knowledge, experience and relationships
necessary to serve as a director of the Company.
Dr. Bob Froehlich. Over the span of his career, Dr.
Froehlich has chaired investment committees for multiple global
asset management organizations, including Deutsche Bank, Hartford
and Kemper Funds. Dr. Froehlich was named to three different All
American Institutional Research Teams in 1991, 1993 and 1994.
This expertise has gained him international acclaim where he has
traveled to and has provided investment and financial advice and
has delivered a keynote speech on investing in 107 different
countries. This expertise has also resulted in his publishing of
6 books.
Dr. Froehlich has amassed over 40 years of financial experience
in both the public and private sector. Dr. Froehlich has served
as: Budget Analyst for the City of Dayton, Ohio, with a budget of
$100 million; chief financial officer for Montgomery County,
Ohios Water and Sewer District, with annual operating revenues of
$75 million; City Manager for the City of Beavercreek, Ohio, the
youngest City Manager ever in Ohio; senior executive with Ernst
Whinney, responsible for a national practice that conducted
financial feasibility studies and financial consulting to tax
exempt entities; campaign finance chairman and treasurer of The
Leonard Committee for Paul R. Leonard, the 58th
Lieutenant Governor of Ohio; senior executive at Van Kampen
Merritt, which became Van Kampen American Capital after its
merger with American Capital, with over $50 billion in assets
across 75 different mutual funds; vice chairman of Kemper Funds,
with $75 billion in assets among 50 different funds; vice
chairman of Scudder Investments, with combined assets of $200
billion in 129 funds; vice chairman of Deutsche Asset Management,
a role he held until he retired in 2009. Dr. Froehlich came out
of retirement in 2009 to help rebrand Hartford Financial after
its near financial collapse serving as a senior executive with
The Hartford Mutual Funds, where he was an officer of all 55
funds with assets totaling $84 billion.
Since his second retirement, Dr. Froehlich has begun a new
chapter in his professional career by building a portfolio of
boards spanning private, public, nonprofit and mutual fund
companies. Dr. Froehlich has served on the board of trustees of
Highland Capital Mutual Funds since December 2013, a major mutual
fund company that offers alternative, equity, fixed income and
asset allocation products through 14 different funds and has
assets under management of $3.5 billion, and also serves as the
Distribution Committee Chairman and as a member of the Audit
Committee and Litigation Committee for Highland Capital Mutual
Funds. Dr. Froehlich has served as an independent director and
member of the Audit Committee, Conflicts Committee and Nominating
and Corporate Governance Committee for NexPoint Capital, Inc.
since July 2014, a publicly registered non-traded BDC. Dr.
Froehlich also has served as an independent director,
Compensation Committee Chairman and a member of the Audit
Committee for AXAR Acquisitions Corp. since October 2014, a
Special Purpose Acquisition Corporation formed for the purpose of
effecting a merger, capital stock exchange or similar business
combinations, which trades on the NASDAQ exchange under the
symbol AUMAU. In June 2014, Dr. Froehlich became the Chairman of
the board of directors, chief executive officer, president and
owner of the Kane County Cougars Baseball Club, the Class A minor
league affiliate of the Arizona Diamondbacks and a member of the
Midwest League and has been a co-owner and member of the board of
directors since January 2013. Dr. Froehlich was also appointed as
an independent director for Galen Robotics, Inc. in August 2016,
a spin-off from John Hopkins University, focusing on the surgical
robotic microsurgery market.
Dr. Froehlich served: as an independent director for Davidson
Investment Advisors, Inc. from 2009 to 2016, a privately held
company that provides professional money management to
institutions, foundations, corporations, affluent investors and
trusts; an independent director and Audit Committee Chairman for
ARC Healthcare Trust, Inc. from 2013 to 2016, a publicly
registered non-traded real estate investment program; an
independent director, Lead Independent Director, Audit Committee
Chairman and Conflicts Committee Chairman for ARC Realty Finance
Trust, Inc. from 2013 to 2016, a publicly registered non-traded
real estate investment program; an independent director and Lead
Independent Director, Audit Committee Chairman and Conflicts
Committee Chairman for American Realty Capital Daily NAV Trust,
Inc. from 2012 to 2016, a publicly registered real estate
investment program; Lead Independent Trustee and Audit Committee
Chairman for Realty Capital Income Funds from 2014 to 2016,
mutual funds sponsored by AR Capital, a full service investment
firm that provides alternative solutions in a public format; and
on the Advisory Board of Directors for Internet Connectivity
Group, Inc. from 2014 to 2016, a full service digital media firm
focusing on point of sale strategies.
Dr. Froehlich received his Ph.D. from California Coast University
in 1979, M.A. from Central Michigan University in 1978, M.P.A.
from the University of Dayton in 1976 and a B.A. from the
University of Dayton in 1975. In 2008, he was awarded an Honorary
Doctorate of Commercial Sciences form the Board of Trustees of
Central Michigan University.
The Company has determined that Dr. Froehlichs extensive
experience serving as a director for several public, private,
mutual fund and nonprofit companies, and his over 40 years in the
finance industry has provided him with the knowledge, experience
and relationships necessary to serve as a director of the
Company.
Frank Grant. Mr. Grant has served as Managing Director
of Interstate Venture Capital, a venture capital and advisory
firm that focuses on the worlds most promising consumer-focused
Internet and mobile companies, since November 2016. Prior to
Interstate Venture Capital, Mr. Grant was a Partner with
Stradling, a business law firm, representing entrepreneurs,
emerging growth companies, venture capital firms and investors,
from July 2015 to November 2016. He focused his practice on
assisting clients in solving business problems, executing
business strategies and achieving critical business objectives.
Prior to Stradling, Mr. Grant served as Senior Counsel at Perkins
Coie, LLP, an international law firm headquartered in Seattle,
Washington, from January 2012 to July 2015.
In addition to investing, Mr. Grant regularly works with public
and private companies in fundraising, corporate transactions, and
corporate governance matters. He has extensive experience with
public and private mergers and acquisitions, asset acquisitions
and dispositions, private placements and venture capital
financings. He assists private and public companies in the
acquisition and sale of full business enterprises, subsidiaries,
divisions and other select assets. He also helps operating
companies, management groups, founders and investors in various
transactions, including mergers and acquisitions, joint ventures,
debt and equity financings, distribution and supply arrangements
and other strategic transactions. Mr. Grant also serves on the
board of directors and the audit committee of First Capital Real
Estate Trust, a publicly-registered, non-traded real estate
investment trust.
Mr. Grant earned a M.B.A. from the Stanford Graduate School of
Business, a J.D. from Stanford Law School and a B.A. with High
Honors in Economics from the University of California, Berkeley.
The Company has determined that Mr. Grants extensive experience
with mergers and acquisitions, fundraising and venture capital
financings has provided him with the knowledge, experience and
relationships necessary to serve as a director of the Company.
Biographical Information for the Companys New President and
Chief Executive Officer
The biographical information of Mr. Clemens, the Companys new
President and Chief Executive Officer, is set forth below:
Pat Clemens. From March 2014 to August 2016, Mr. Clemens
served as an investment management professional for Dallas-based
Revere Capital, LLC, an emerging private credit fund, where he
established the firms west coast presence, led structured credit
investments in commercial real estate and launched a new
investment initiative for lower middle-market companies. From
January 2008 to September 2012, Mr. Clemens served as Managing
Director, Investment Management at White Oak Global Advisors,
LLC, a San Francisco-based, de novo private credit
investment management fund. As one of the first strategic hires
following the founders, Mr. Clemens led the creation and
comprehensive buildout of the investment process: transaction
sourcing development and buildout; investment due diligence,
underwriting, analysis, structuring and documentation process
management; and post-closing portfolio management, oversight,
reporting and valuation policies and procedures. Mr. Clemens
directly sourced and managed approximately $285 million in
credit/equity transactions during his term.
From June of 2004 through May of 2007, Mr. Clemens worked for
both GE Capital and CIT Group, focusing on core commercial
finance transaction, targeting the Specialty Retail and Consumer
sector. From June of 2000 through November of 2002, he worked for
WH Hambrecht Co. as a member of the corporate finance team
pursuing IPOs, MA, other investment banking transactions and
private equity financing in the communications systems space.
From November 1998 through June 2000, Mr. Clemens worked in
Silicon Valley Banks structured products group, providing
structured debt finance, international trade finance, inventory
financing and other commercial banking services to late stage
private, and small and mid-cap publicly traded emerging growth
technology companies. Mr. Clemens began his banking and financial
services career at the Union Bank of California, where he
provided corporate loans and other financial services to large
general corporate clients as well as developing the banks
emerging lending practice to middle-market technology companies
In conjunction with his banking career, Mr. Clemens has built a
private consulting practice for his client base, providing
strategic advisory services, including capital raising, MA and
divestitures, transaction execution and process management and
other services. Mr. Clemens graduated from Purdue University in
May 1990 with a B.S. in Finance and a minor in Japanese.
|
Item 8.01 |
Other Events. |
On March 28, 2017, Freedom Capital Investment Management LLC
(FCIM), the entity that owns FCIC Advisors LLC, the
investment adviser to the Company (FCIC Advisors), and
Democracy Funding LLC, the dealer manager in the Companys public
offering (Democracy Funding), entered into a Membership
Interest Purchase Agreement with First Capital Real Estate
Investments, LLC (FCREI), whereby FCREI agreed to acquire
all of the membership units of FCIM and Democracy Funding in
exchange for a secured promissory note payable over time. FCREI
is controlled by Suneet Singal, who was appointed Chairman of the
Board following the execution of the Membership Interest Purchase
Agreement. The acquisition of FCIM is expected to close on or
about April 3, 2017.
In anticipation of the closing of the acquisition of FCIM,
Jeffrey McClure resigned as the Companys President, Chief
Executive Officer and Chairman of the Board, effective March 30,
2017. In addition, Liam Coakley, David Duhamel, Keith Hall and
Steven Looney also resigned from the Board on March 30, 2017 and
were replaced by Dr. Bob Froehlich and Frank Grant, both of whom
are independent of the Company, the Advisor and FCREI. Pat
Clemens was appointed by the Board to replace Mr. McClure as the
Companys President and Chief Executive Officer and Suneet Singal
was appointed to the Board as an interested director and named
Chairman of the Board. See Item 5.02 of this Current Report on
Form 8-K for additional information regarding the Companys new
directors and executive officers.
Upon the closing of the acquisition of FCIM by FCREI on or about
April 3, 2017, there will be a change in control of FCIC
Advisors, which will result in an assignment, as that term is
used in the Investment Company Act of 1940, as amended (the
1940 Act), of the investment advisory and administrative
services agreement between the Company and FCIC Advisors (the
Advisory Agreement). Section 15 of the 1940 Act requires,
among other things, that any investment advisory agreement
provide for its automatic termination in the event of its
assignment. In anticipation of the termination of the Advisory
Agreement, the Companys board of directors (the Board) is
scheduled to hold an in-person meeting on March 31, 2017 to
approve an interim investment advisory agreement (the Interim
Advisory Agreement) with FCIC Advisors, as permitted by Rule
15a-4 of the 1940 Act, on substantially the same terms as the
Advisory Agreement. The Interim Advisory Agreement will be
effective for 150 days from the date of the termination of the
Advisory Agreement. The Board intends to submit a new investment
advisory and administrative services agreement, which the Company
expects to be substantially similar to the Advisory Agreement and
the Interim Advisory Agreement, for stockholder approval at the
Companys 2017 annual meeting of stockholders. If approved by the
Companys stockholders, the new investment advisory and
administrative services agreement will have a one-year term and
may be continued thereafter for successive one-year periods if
such continuance is approved in the manner provided for under
Section 15 of the 1940 Act.
In addition, the Membership Interest Purchase Agreement also
provides for the acquisition by FCREI of The Bear Companies, an
entity controlled by Mr. McClure and his wife, which owns
Democracy Funding. The acquisition of The Bear Companies is
contingent upon approval of the change in control of Democracy
Funding by FINRA. No application has been submitted to FINRA at
this time, and there can be no assurance as to whether FINRA will
approve the change in control on the terms contemplated by the
Membership Interest Purchase Agreement.
A copy of the press release reporting the foregoing events is
filed as Exhibit 99.1 hereto and incorporated herein by
reference.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 99.1 | Press release dated March 30, 2017. |
About First Capital Investment Corporation (NASDAQ:FBIZ)
First Business Financial Services, Inc. (FBFS) is a bank holding company. The Company engages in the commercial banking business through its bank subsidiaries, which include First Business Bank (FBB), First Business Bank-Milwaukee (FBB-Milwaukee) and Alterra Bank (Alterra) (FBB and FBB-Milwaukee and, together with FBB, the Banks). The operations of FBFS are conducted through the Banks and certain subsidiaries of FBB. The Banks operate as business banks focusing on delivering a line of commercial banking products, including commercial loans and commercial real estate loans, and services to meet the needs of small- and medium-sized businesses, business owners, executives, professionals and high net worth individuals. Its business lines include commercial lending, asset-based financing, equipment financing, small business administration (SBA) lending, treasury management services, and trust and investment services. Its investments include short-term investments and securities. First Capital Investment Corporation (NASDAQ:FBIZ) Recent Trading Information
First Capital Investment Corporation (NASDAQ:FBIZ) closed its last trading session up +0.27 at 25.95 with 12,755 shares trading hands.