SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1 )*
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Merriman Curhan Ford Group, Inc.
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(Name of Issuer)
Common Stock, Par Value $0.0001 Per Share
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(Title of Class of Securities)
590418109
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(CUSIP Number)
Barry L. Fischer
Thompson Coburn Fagel Haber
55 East Monroe Street
Suite 3700
Chicago, IL 60603
(312) 346-7500
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 27, 2009
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), (f) or (g), check the following box / /.
Note: Schedules filed in paper format shall include a signed original and five
copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are being sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. 590418109
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1 NAMES OF REPORTING PERSON
Individual Retirement Accounts for the benefit of Ronald L. Chez and
Ronald L. Chez Individually
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(See Instructions) (b)[ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7 SOLE VOTING POWER
17,908,146(1)
NUMBER OF
SHARES ==========================================================
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING ==========================================================
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
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10 SHARED DISPOSITIVE POWER
17,908,146(1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,908,146(1)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
58.4%(2)
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14 TYPE OF REPORTING PERSON (See Instructions)
IN
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(1) Assumes the issuance of the Shares and August Warrant, each as
discussed in Item 4 to this Schedule 13D.
(2) Based upon 12,733,287 shares of the Issuer's common stock issued
and outstanding as of August 7, 2009, as reported on the Issuer's Form 10-Q
for the quarterly period ended June 30, 2009.
Pursuant to Rule 13d-2 of Regulation 13D-G of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, the
undersigned Ronald L. Chez (the "Reporting Person") hereby amends his
statement on Schedule 13D dated August 10, 2009 (the "Schedule 13D"). This
Statement constitutes Amendment No. 1 to the Schedule 13D. Unless otherwise
indicated herein, there are no material changes to the information set forth
in the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION is hereby amended
and restated in its entirety to read as follows:
The $3,400,000 used by the Reporting Person to purchase the Series D
Preferred Stock and warrants to purchase Common Stock of the Company that
require the filing of this Schedule 13D are personal funds, including amounts
held by an individual retirement account for the benefit of the Reporting
Person.
ITEM 4. PURPOSE OF TRANSACTION is hereby amended by adding thereto the
following:
On August 27, 2009, the Reporting Person, for investment purposes,
entered into a Stock Purchase Agreement dated as of August 27, 2009 between
the Company, the Reporting Person and the other Investors listed therein (the
"Stock Purchase Agreement"). Pursuant to the Stock Purchase Agreement, the
Reporting Person purchased, in a private placement, 7,906,977 shares of the
Company's newly issued Series D Convertible Preferred Stock, par value $0.0001
per share (the "Preferred Shares") and a Warrant (the "August Warrant") to
purchase 7,906,977 shares of Common Stock at an exercise price $0.65 per
share. The aggregate purchase price for the Preferred Shares and August
Warrant was $3,400,000, of which $ $2,792,722 was paid in cash into escrow on
the date of the Stock Purchase Agreement and the remaining $607,278 will be
satisfied through cancellation of the principal amount and accrued interest
under the Note and the Secured Convertible Promissory Note of the Company in
favor of the Reporting Person on June 1, 2009. In connection with the
transaction, certain holders of Warrants agreed to transfer to the Reporting
Person (for no additional consideration) Warrants for 456,654 shares of Common
Stock. The Preferred Shares and the August Warrant will be issued (and the
escrowed proceeds released to the Company and notes cancelled) on the tenth
day following the Company mailing a notice required pursuant to NASDAQ listing
Rule 5635(f) as more fully described in the Stock Purchase Agreement. The
Company also made customary representations, warranties and covenants in the
Stock Purchase Agreement.
The Preferred Shares are entitled to a dividend of six percent per
annum, payable in arrears on the last day of each calendar month, commencing
August 30, 2009, payable in preference to any dividend or distribution on the
Common Stock. Upon a Liquidation Event (as defined in the Certificate of
Designation of Series D Convertible Preferred Stock (the "Certificate of
Designation")), each holder of Preferred Shares will be entitled, prior to
payment to the holders of Common Stock or any other class of preferred stock,
the sum of $0.43 (subject to adjustment as set forth in the Certificate of
Designation) and all then accrued and unpaid dividends on the Preferred
Shares. Following such payment, the holders of Preferred Shares will be
entitled to any remaining amounts available for distribution on an as
converted to common stock basis, as described below.
The Preferred Shares are convertible into Common Stock at any time at
the option of a holder (so long as the aggregate conversion price for all such
shares converted is not less than $100,000) into the number of shares of
Common Stock equal to the number of shares of Preferred Shares being converted
multiplied by a fraction, the numerator of which is $0.43 and the denominator
of which is the Conversion Price, which is initially $0.43. The Conversion
Price is subject to downward adjustment for certain dilutive events as set
forth in more detail in the Certificate of Designation. The Preferred Shares
will automatically convert to Common Stock at the Company's option upon 10
days written notice if (i) the 30 day average closing sale price for the
Common Stock is at or above $3.00 at the time the notice is provided by the
Company; (ii) the average weekly trading volume for the four week period
immediately preceding delivery of such written notice of conversion is 30,000
shares or more, and (iii) either (A) a registration statement which includes
all outstanding Preferred Shares has been declared effective by the Securities
and Exchange Commission; or (B) all outstanding shares of Preferred Shares may
be sold under Rule 144 promulgated under the Securities Act of 1933, as
amended, or any equivalent successor rule, within a three month period.
Holders of Preferred Shares shall be entitled to the number of votes
equal to the number of shares of Common Stock into which the shares of
Preferred Shares held by such holder could be converted as of the record date.
In addition, so long as at least 2,500,000 shares (as adjusted for stock
splits, dividends, recapitalizations and the like) of Preferred Shares remain
outstanding, the holders of Preferred Shares, voting as a separate class,
shall be entitled to elect four members of the Company's Board of Directors.
Further, so long as 2,500,000 shares (as adjusted for stock splits, dividends,
recapitalizations and the like) of Preferred Shares remain outstanding, the
affirmative vote of a majority of interest in the Preferred Shares is required
to alter or change adversely the powers, preferences, or rights given to the
Preferred Shares; authorize any class of stock with superior preferences to
the Preferred Shares, amend the Company's Certificate of Incorporation or
bylaws in any manner that adversely affects any rights of the Preferred
Shares; increase the number of authorized shares of Preferred Shares; or
effect a Liquidation Event; and the affirmative vote of the holders of at
least 66 2/3% of Preferred Shares is required to authorize any new stock
option, restricted stock or other equity compensation plan; change the size of
the Company's Board of Directors; incur certain indebtedness for borrowed
money (subject to certain exceptions set forth in the Certificate of
Designation); or approve any replacement for Peter Coleman with the Company
(subject to certain conditions set forth in the Certificate of Designation).
The August Warrant is exercisable immediately and remains exercisable
until the fifth anniversary of its issuance. The exercise price and number of
shares of common stock issuable pursuant to the August Warrant is subject to
adjustment for certain dilutive events as set forth in more detail in the
August Warrant.
In connection with his purchase of the Preferred Shares and August
Warrant, the Reporting Person, the Company and the other investors designated
therein entered into an Investors' Rights Agreement dated as of August 27,
2009 (the "Investors' Rights Agreement"). The Investors' Rights Agreement
provides for registration of the Common Stock underlying the Preferred Shares
and August Warrant, the Warrant and the warrant issued to the Reporting Person
on June 1, 2009 (as well as other warrants that may be issued pursuant to the
Investor Rights Agreement), through a shelf registration statement, or, under
certain circumstances as set forth in the Investors' Rights Agreement, demand
and piggyback registration statements. Should the Company fail to register
such securities within the time limits set forth in the Investors'
Rights Agreement, the Company will issue additional warrants to purchase up to
900,000 shares of Common Stock, in the amounts and on the terms set forth in
the Investors' Rights Agreement. Pursuant to a letter regarding the Investors'
Rights Agreement issued to the Reporting Person on August 27, 2009, the
Company agreed to use its best efforts to increase the number of additional
warrant shares to be issued (to up to 971,000) and to register the August
Warrant and any warrants issuable pursuant to the Investors' Rights Agreement.
The Investors' Rights Agreement also provides for the issuance of warrants for
Common Stock equal to the aggregate Common Stock issuable under the August
Warrants (the "Merriman Warrants") should D. Jonathan Merriman cease to serve
as Chief Executive Officer of the Company prior to the third anniversary of
the Investors' Rights Agreement, provided however that the Merriman Warrants
will not be issued if Mr. Merriman ceases to serve as Chief Executive Officer
of the Company due to his death, his termination by the Company other than for
Cause (as defined in the Investors' Rights Agreement) or Mr. Merriman
terminates his employment for Good Reason (as defined in the Investors' Rights
Agreement). The Investors' Rights Agreement also provides for the issuance of
warrants to purchase Common Stock should the Company fail to keep a life
insurance policy in place with respect to Mr. Merriman prior to the fifth
anniversary of the Investors' Rights Agreement, in the amounts and on the
conditions set forth in the Investors' Rights Agreement.
The Investors' Rights Agreement also provides for the designation of
the directors to be selected by the holders of Preferred Shares. Pursuant to
the Investors' Rights Agreement, the Reporting Person has the right to
designate 2 of the 4 directors to be selected by the holders of Preferred
Shares. Currently the Reporting Person has designated himself as a director,
but has not to date decided on the second director. The Investors' Rights
Agreement also provides for preemptive rights with respect to certain
issuances of Company securities.
In connection with the Reporting Person's investment, the Reporting
Person was named chairman of the Company's newly formed Strategic Advisory
Committee of the Board of Directors pursuant to a letter agreement between the
Company and the Reporting Person dated August 27, 2009 (the "Strategic
Advisory Agreement"). The Strategic Advisory Committee is to be established
for the purposes of providing input and advice on directing the Company's
growth, evaluating potential new business opportunities and lines of business
and similar matters of importance to the Company as a whole, but does not
entail any supervisory or management responsibilities of the Company's
broker-dealer subsidiary, or require the Reporting Person to be actively
engaged in the investment banking, broker dealer or other businesses conducted
by that subsidiary. In exchange for such services, pursuant to the Strategic
Advisory Agreement the Reporting Person will be granted a warrant to purchase
25,000 shares of Common Stock of the Company per month of service at an
exercise price of $0.65 per share with a 10 year exercise period, and other
terms substantially the same as those of the Warrant, plus $500 per hour in
cash for any work performed by the Reporting Person at the Company's request
in excess of 10 hours in any month, as well as expense reimbursement. The term
of the Strategic Advisory Agreement is one year, and automatically renews for
additional one year periods unless the Company or the Reporting Person
terminates the agreement in the manner set forth in the Strategic Advisory
Agreement.
The foregoing descriptions of the Stock Purchase Agreement,
Certificate of Designation, August Warrant, Investors' Rights Agreement,
letter agreement regarding Investors' Rights Agreement and Strategic Advisory
Agreement are qualified in their entirety by reference to the text of those
agreements, which are filed as Exhibits 4 through 9, respectively, and
incorporated
herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER is hereby amended and restated in
its entirety as follows:
(a) This statement relates to 17,583,399 shares of Common Stock which
the Reporting Person has the right to acquire upon conversion of the Preferred
Shares and exercise of the Warrant, the warrant issued on June 1 described in
the Schedule 13D and the August Warrant (collectively, the "Warrants"), as
well as 324,747 shares of Common Stock previously purchased by the Reporting
Person, and assumes the issuance of the Preferred Shares and August Warrant.
Based on the Company's Form 10-Q for the quarterly period ended June 30, 2009,
12,733,287 shares of Common Stock were outstanding as of August 7, 2009.
Therefore, the 17,908,146 shares of Common Stock reported on this Schedule 13D
(which includes 17,583,399 shares of Common Stock issuable upon conversion in
full of the Preferred Shares and exercise in full of the Warrants) would
represent approximately 58.4% of the Company's outstanding shares following
such conversions and exercises.
(b) The Reporting Person has the sole power (and no shared power) to
vote, dispose of or direct the disposition of the Common Stock the Reporting
Person has the right to acquire by virtue of owning the Warrant.
(c) Except as reported herein, since the filing of the Schedule 13D
on August 10, 2009, the Reporting Person has not effected any transactions in
the Company's securities.
(d) Not applicable.
(e) Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS is hereby amended by adding hereto
the following:
Exhibit 4. Stock Purchase Agreement
Exhibit 5. Certificate of Designation
Exhibit 6. August Warrant
Exhibit 7. Investors' Rights Agreement
Exhibit 8. Letter agreement regarding Investors' Rights Agreement
Exhibit 9. Strategic Advisory Agreement
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated as of August 31, 2009
/s/ Ronald L. Chez
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Ronald L. Chez
EXHIBIT INDEX
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Exhibit No. Document Description Page No.
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1. Secured Promissory Note, dated July *
31, 2009 issued by Merriman Curhan
Ford Group, Inc. to First Bank &
Trust as Custodian of Ronald L. Chez
IRA
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2. Common Stock Purchase Warrant No. *
C-009, dated July 31, 2009 issued
Merriman Curhan Ford Group, Inc. to
First Bank & Trust as Custodian of
Ronald L. Chez IRA
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3. Security Agreement dated as of July *
31, 2009 made by and among Merriman
Curhan Ford Group, Inc. and First
Bank & Trust as Custodian of Ronald
L. Chez IRA
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4. Series D Preferred Stock Purchase
Agreement dated as of August 27,
2009, by and among Merriman Curhan
Ford Group, Inc., a Delaware
corporation, and the persons and
entities listed on the Schedule of
Investors attached thereto
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5. Certificate Of Designation Of Series
D Convertible Preferred Stock
Merriman Curhan Ford Group, Inc.
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6. Form of Merriman Curhan Ford Group,
Inc. Common Stock Purchase Warrant
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7. Investors' Rights Agreement dated as
of August 27, 2009, by and among
Merriman Curhan Ford Group, Inc., a
Delaware corporation, and the
persons and entities listed on
Exhibit A and Exhibit B thereto
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8. Letter agreement related to
Investors' Rights Agreement
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9. Letter Agreement between Ronald Chez
and Merriman Curhan Ford Group, Inc.
dated August 27, 2009 regarding
Chairmanship of Strategic Advisory
Committee
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* Previously filed with the Schedule 13D