Filing Details

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 13D/A

 

Under the Securities Exchange Act of 1934
(Amendment No. 5)*

 

NON-INVASIVE MONITORING SYSTEMS, INC.

(Name of Issuer)

 

Common stock, par value $0.01 per share

(Title of Class of Securities)

 

655366508

(CUSIP Number)

 

Phillip Frost, M.D.

4400 Biscayne Boulevard

Miami, Florida 33137

Telephone: (305) 575-6015

(Name, address and telephone number of person
authorized to receive notices and communications)

 

December 21, 2018

(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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(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 to be 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 the 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 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)

 

 

 

1	NAME OF REPORTING PERSONS      Phillip Frost, M.D.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP      (a) [X]    (b) [  ]
3	SEC USE ONLY
4	SOURCE OF FUNDS      OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED    PURSUANT TO ITEM 2(d) or 2(e)      [X]
6	CITIZENSHIP OR PLACE OF ORGANIZATION      United States of America

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER      625 (1)
	8	SHARED VOTING POWER      54,702,825 (2)
	9	SOLE DISPOSITIVE POWER      625 (1)
	10	SHARED DISPOSITIVE POWER      54,702,825 (2)

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON      54,703,450 (1)(2)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES    CERTAIN SHARES **      [  ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)      37.2% (3)
14	TYPE OF REPORTING PERSON      IN

 

	(1)	Includes 625 shares of common stock issuable upon conversion of 25 shares of Series C Convertible Preferred Stock, par value $1.00 per share (“Series C Preferred”), of Non-Invasive Monitoring Systems, Inc., a Florida corporation (the “Issuer”).
	(2)	Includes 48,355,325 shares of common stock, 12,500 shares of common stock issuable upon conversion of 500 shares of Series C Preferred, and 6,335,000 shares of common stock issuable upon conversion of 1,267 shares of the Issuer’s Series D Convertible Preferred Stock, par value $1.00 per share (“Series D Preferred”), in each case held by Frost Gamma Investments Trust, of which Dr. Frost is the trustee and Frost Gamma Limited Partnership is the sole and exclusive beneficiary. Dr. Frost is one of two limited partners of Frost Gamma Limited Partnership. The general partner of Frost Gamma Limited Partnership is Frost Gamma, Inc. and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation. The reporting person disclaims beneficial ownership of these securities, except to the extent of his pecuniary interest therein.
	(3)	Based on 140,900,655 shares of common stock outstanding, computed based on 79,007,423 shares of common stock outstanding as of December 17, 2018, as reported by the Issuer in its Quarterly Report on Form 10-Q for the quarter ended October 31, 2018, plus 61,893,232 shares of common stock issued on December 21, 2018, as reported by the Issuer in its Current Report on Form 8-K filed with the SEC on December 28, 2018.

 

 

1	NAME OF REPORTING PERSONS      Frost Gamma Investments Trust
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP      (a) [X]      (b) [  ]
3	SEC USE ONLY
4	SOURCE OF FUNDS      WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED    PURSUANT TO ITEM 2(d) or 2(e)      [X]
6	CITIZENSHIP OR PLACE OF ORGANIZATION      State of Florida

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER      0
	8	SHARED VOTING POWER      54,702,825 (1)
	9	SOLE DISPOSITIVE POWER      0
	10	SHARED DISPOSITIVE POWER      54,702,825 (1)

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON      54,702,825 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES    CERTAIN SHARES **      [  ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)      37.2% (2)
14	TYPE OF REPORTING PERSON      OO

 

	(1)	Includes 48,355,325 shares of common stock, 12,500 shares of common stock issuable upon conversion of 500 shares of Series C Preferred, and 6,335,000 shares of common stock issuable upon conversion of 1,267 shares of Series D Preferred.
	(2)	Based on 140,900,655 shares of common stock outstanding, computed based on 79,007,423 shares of common stock outstanding as of December 17, 2018, as reported by the Issuer in its Quarterly Report on Form 10-Q for the quarter ended October 31, 2018, plus 61,893,232 shares of common stock issued on December 21, 2018, as reported by the Issuer in its Current Report on Form 8-K filed with the SEC on December 28, 2018.

 

 

ITEM 1.

Security and Issuer

 

This Amendment No. 5 to Schedule 13D (this “Amendment”) amends certain Items of the Schedule 13D (the “Original 13D”) filed with the Securities and Exchange Commission (the “SEC”) on August 29, 2005, and amended on November 9, 2006, May 12, 2008, February 10, 2009 and March 7, 2012 by furnishing the information set forth below. Except as set forth below, all previous Items are unchanged.

 

This Amendment is filed by Phillip Frost, M.D. (“Dr. Frost”) and Frost Gamma Investments Trust (the “Gamma Trust” and, together with Dr. Frost, the “Reporting Persons”) with respect to the common stock, par value $0.01 per share (“Common Stock”), of Non-Invasive Monitoring Systems, Inc., a Florida corporation (the “Issuer”). The principal executive offices of the Issuer are located at 4400 Biscayne Boulevard, Miami, Florida 33137.

 

ITEM 2.

Identity and Background

 

Paragraph (e) of Item 2 of the Original 13D is amended and restated in its entirety to read as follows:

 

(e)       On December 27, 2018, the Reporting Persons entered into a settlement agreement with the SEC, subject to court approval, to resolve an action brought by the SEC against the Reporting Persons and others in SEC v. Honig et al., 18 Civ. 08175 (S.D.N.Y.). Without admitting or denying the SEC’s allegations, Dr. Frost agreed to injunctions from violations of the Sections 5(a), 5(c), and 17(a)(2) of the Securities Act of 1933 and Section 13(d) of the Securities Exchange Act of 1934 and Rule 13d-1(a) thereunder; approximately $5.5 million in penalty, disgorgement, and prejudgment interest; and a prohibition, with certain exceptions, from trading in penny stocks. Without admitting or denying the SEC’s allegations, the Gamma Trust agreed to injunctions from violations of Section 17(a)(2) of the Securities Act of 1933; and a prohibition, with certain exceptions, from trading in penny stocks.

 

ITEM 3.

Source and Amount of Funds or Other Consideration.

 

Item 3 is hereby amended to add the following:

 

On December 21, 2018, using its working capital, the Gamma Trust acquired 7,142,857 shares of Common Stock (the “PIPE Shares”) at a purchase price of $0.07 per share. The Gamma Trust acquired the PIPE Shares in a private placement pursuant to a securities purchase agreement, dated as of December 21, 2018 (the “Purchase Agreement”), by and between the Issuer and the Gamma Trust. Also on December 21, 2018, the Gamma Trust entered into a Debt Exchange Agreement (the “Exchange Agreement”) with the Issuer and the other parties thereto, pursuant to which the Gamma Trust acquired 26,212,468 shares of Common Stock (the “Exchange Shares” and, together with the PIPE Shares, the “Purchased Shares”) in exchange for an aggregate of $1,834,872.75 of indebtedness owed by the Issuer to the Gamma Trust or affiliates thereof.

 

ITEM 4.

Purpose of Transaction.

 

Item 4 is hereby amended to add the following:

 

The Gamma Trust acquired the Purchased Shares for investment purposes. The Reporting Persons have no present plan or proposal that relates to, or could result in, any of the events referred to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D.

 

ITEM 5.

Interest in Securities of the Issuer.

 

Item 5 is hereby amended in its entirety to read as follows:

 

 

The Reporting Persons’ respective beneficial ownership of Common Stock is as set forth in the table below:

 

Name and Title of Beneficial Owner		Number of Outstanding Shares Beneficially Owned		Percentage of Outstanding Shares of Common Stock(1)
Phillip Frost, M.D.		54,703,450 (2)			37.2	%
Frost Gamma Investments Trust		54,702,825 (3)			37.2	%

 

(1)	Based on 140,900,655 shares of Common Stock outstanding, computed based on 79,007,423 shares of Common Stock outstanding as of December 17, 2018, as reported by the Issuer in its Quarterly Report on Form 10-Q for the quarter ended October 31, 2018, plus 61,893,232 shares of Common Stock issued on December 21, 2018, as reported by the Issuer in its Current Report on Form 8-K filed with the SEC on December 28, 2018.
(2)	Includes 625 shares of Common Stock issuable upon conversion of 25 shares of the Issuer’s Series C Convertible Preferred Stock, par value $1.00 per share (“Series C Preferred”). Also includes 48,355,325 shares of Common Stock, 12,500 shares of Common Stock issuable upon conversion of 500 shares of Series C Preferred, and 6,335,000 shares of Common Stock issuable upon conversion of 1,267 shares of the Issuer’s Series D Convertible Preferred Stock, par value $1.00 per share (“Series D Preferred”), in each case held by the Gamma Trust, of which Dr. Frost is the trustee and Frost Gamma Limited Partnership is the sole and exclusive beneficiary. Dr. Frost is one of two limited partners of Frost Gamma Limited Partnership. The general partner of Frost Gamma Limited Partnership is Frost Gamma, Inc. and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation. The reporting person disclaims beneficial ownership of these securities, except to the extent of his pecuniary interest therein.
(3)	Includes 48,355,325 shares of Common Stock, 12,500 shares of Common Stock issuable upon conversion of 500 shares of Series C Preferred, and 6,335,000 shares of Common Stock issuable upon conversion of 1,267 shares of Series D Preferred.

 

Items 7-10, inclusive, set forth on each cover page to this Amendment are hereby incorporated by reference in this Item 5.

 

ITEM 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

 

Item 6 is hereby amended to add the following:

 

As described in Item 3 to this Amendment, on December 21, 2018, the Gamma Trust entered into the Purchase Agreement and the Exchange Agreement, the description of each of which contained in Item 3 is incorporated by reference in this Item 6.

 

On December 3, 2018, the Issuer entered into an Equity Exchange Agreement (the “EEA”) with IRA Financial Trust Company, a South Dakota trust corporation (“IRA Trust”), IRA Financial Group LLC, a Florida limited liability company (“IRAFG” and, together with IRA Trust, “IRA Financial”), Adam Bergman and Fred Horner (together, the “Equityholders”). Upon the terms and subject to the conditions contained in the Exchange Agreement, the Issuer will issue to the Equityholders shares of a newly-designated series of its convertible preferred stock in exchange for 100% of the issued and outstanding equity in IRA Financial (the “Exchange”).

 

In connection with the EEA, the Gamma Trust entered into a lock-up and voting agreement (the “Lock-up and Voting Agreement”), pursuant to which the Gamma Trust has agreed, subject to certain exceptions, not to sell, transfer or otherwise convey any of the Issuer’s securities held by it (collectively, “Covered Securities”) for a certain period following the date on which the Exchange is consummated (the “Closing Date”). The Lock-up and Voting Agreement provides generally that the Gamma Trust may not sell, transfer or convey any of its Covered Securities during the period of six-months immediately following the Closing Date, following which it may sell, transfer or convey (i) up to 50% of its Covered Securities during the period commencing on the six-month anniversary of the Closing Date and ending on the twelve-month anniversary of the Closing Date and (ii) up to an aggregate of 75% of its Covered Securities during the period commencing on the twelve-month anniversary of the Closing Date and ending on the two-year anniversary of the Closing Date. The restrictions on transfer contained in the Lock-up and Voting Agreement cease to apply to the Covered Securities following the second anniversary of the Closing Date.

 

 

Additionally, pursuant to the Lock-up and Voting Agreement, the Gamma Trust has agreed, for the period commencing on the Closing Date and ending on the six-month anniversary of the Closing Date, to vote all of its Covered Securities in favor of (i) amending the Issuer’s articles of incorporation, as currently amended, to change the legal name of the Issuer and to provide that the holders of not less than 50% of the Issuer’s voting power shall be entitled to call a special meeting of shareholders unless the bylaws establish a lower percentage requirement, (ii) amending the Issuer’s articles of incorporation, as currently amended, to increase the authorized shares of Common Stock such that the shares of preferred stock issued to the Equityholders in connection with the Exchange shall, upon such amendment’s effectiveness, convert into Common Stock in accordance with their terms and (iii) any other action requested by the Issuer’s Board of Directors as may be required to consummate the Exchange and the other transactions set forth in the EEA.

 

Effectiveness of the Lock-up and Voting Agreement is conditioned upon consummation of the Exchange.

 

The foregoing description of the Purchase Agreement, the Exchange Agreement and the Lock-up and Voting Agreement is only a summary and is qualified in its entirety by reference to the complete text of the form of Purchase Agreement, the Exchange Agreement and the form of Lock-up and Voting Agreement, which are filed as Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3, respectively, to this Amendment and incorporated by reference in this Item 6.

 

ITEM 7.

Material to be Filed as Exhibits

 

Exhibit No.		Description
99.1		Form of Stock Purchase Agreement, dated December 21, 2018, filed as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K, filed with the SEC on December 28, 2018 and incorporated by reference herein.
99.2		Debt Exchange Agreement, dated December 21, 2018, by and among the Issuer and the creditors party thereto, filed as Exhibit 10.2 to the Issuer’s Current Report on Form 8-K filed with the SEC on December 28, 2018 and incorporated by reference herein.
99.3		Form of Lock-up and Voting Agreement, filed as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed with the SEC on December 4, 2018 and incorporated by reference herein.
99.4		Joint Filing Agreement

 

 

SIGNATURES

 

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: January 10, 2019	/s/ Phillip Frost, M.D.
	Phillip Frost, M.D.
Dated: January 10, 2019	FROST GAMMA INVESTMENTS TRUST
	By:	/s/ Phillip Frost, M.D.
		Phillip Frost, M.D. Trustee

 

 

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Form of Stock Purchase Agreement, dated December 21, 2018, filed as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K, filed with the SEC on December 28, 2018 and incorporated by reference herein.
99.2		Debt Exchange Agreement, dated December 21, 2018, by and among the Issuer and the creditors party thereto, filed as Exhibit 10.2 to the Issuer’s Current Report on Form 8-K filed with the SEC on December 28, 2018 and incorporated by reference herein.
99.3		Form of Lock-up and Voting Agreement, filed as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed with the SEC on December 4, 2018 and incorporated by reference herein.
99.4		Joint Filing Agreement