Page 6 of 8 – SEC Filing
SCHEDULE 13D
| Item 4. | Purpose of Transaction. |
Capital acquired the shares
of Common Stock reported herein for investment purposes.
On May 17, 2017,
Capital delivered a letter (the “May 17 Letter”) to the Company indicating Capital’s interest in acquiring all
of the outstanding shares of Common Stock not already owned by Capital or its affiliates for $6.15 per share, in cash (the “Proposal”).
As noted in the May 17 Letter, the proposed price represents a premium of approximately 27% over the closing price on May 17, 2017.
The Reporting Persons intend to engage in substantive discussions with the Company regarding the Proposal and/or a similar negotiated
acquisition of the Company.
The Proposal is conditioned
upon, among other things, completion of satisfactory due diligence, completion of a financing plan, negotiation of mutually acceptable
definitive agreements and the satisfaction (or waiver) of the conditions expected to be set forth in such agreements.
The foregoing description
of the May 17 Letter is a summary, is not complete and is qualified in its entirety by reference to the full text of the May 17
Letter, a copy of which is attached to this Schedule 13D as Exhibit 99.1.
In the event that
Capital and the Company do not agree to pursue the transaction contemplated by the Proposal, the Reporting Persons intend to discuss
with the Company’s board of directors and senior management alternative transactions involving the Company. To that end,
the Reporting Persons may engage an investment bank or seek to cause the Company to engage an investment bank to explore strategic
alternatives and pursue an auction process. The Reporting Persons may also communicate with the board of directors of the Company
regarding various matters relating to board composition, management (including succession planning), the Company’s strategic
plans and other matters that the Reporting Persons deem appropriate. Such communications and discussions are likely to include
plans or proposals with respect to matters specified in clauses (a) through (j) of Item 4 of Schedule 13D, but the Reporting Persons
have not made a definitive determination to pursue, and may not pursue, any such plans or proposals.
There can be no assurance
that any of the Reporting Persons will enter into definitive agreements with respect to the Proposal upon the terms set forth in
the May 17 Letter or otherwise or that the transactions contemplated by the Proposal or any other transaction involving the Company
will be consummated. The Reporting Persons reserve the right to pursue all other options necessary to protect Capital’s investment
in the Company, including, but not limited to, pursuing other strategic buyers of the Company or its assets, seeking to change
the composition of the board of directors, exploring changes to the company’s management, selling Common Stock or other securities,
engaging in hedging transactions with respect to the Company’s securities and/or otherwise changing the Reporting Persons’
intention with respect to the Common Stock. Without limiting the foregoing, the Reporting Persons may acquire additional Common
Stock or dispose of Common Stock at any time and from time to time in the open market, in privately negotiated transactions or
otherwise. Although the foregoing represents the range of activities presently contemplated by the Reporting Persons, the scope
of possible activities is subject to change.
| Item 5. | Interest in Securities of the Issuer. |
| (a) | The aggregate percentage of the outstanding shares of Common Stock reported owned by each Reporting Person is based upon 1,962,062 shares of Common Stock outstanding as of March 31 , 2017, as reported in the Company’s Form 10-Q for the quarter ended February 28, 2017. |
As of the close of business on May 16, 2017:
| (i) | Capital beneficially owns 140,627 shares of Common Stock constituting approximately 7.2% of the shares of Common Stock outstanding; |
