SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION
TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
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SG BLOCKS, INC. |
| (Name of Issuer) |
| Common Stock, par value $0.01 per share |
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(Title of Class of Securities)
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| 78418A 307 |
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(CUSIP Number)
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Paul M. Galvin c/o SG Blocks, Inc. 195 Montague Street, 14th Floor Brooklyn, NY 11201 (646) 240-4235
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With a copy to: David D. Watson Thompson Hine LLP 3900 Key Center 127 Public Square Cleveland, Ohio 44114 (216) 566-5500 (Name, Address and Telephone Number of Person |
| October 24, 2017 |
| (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 §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-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 § 240.13d-7 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 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. 78418A 307 | 13D | Page 2 of 7 Pages |
| 1 |
NAME OF REPORTING PERSON
Paul M. Galvin |
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| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ¨ (b) ¨ |
| 3 |
SEC USE ONLY
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| 4 |
SOURCE OF FUNDS
PF; AF; OO |
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| 5 |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
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¨ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER
338,942(1) |
| 8 |
SHARED VOTING POWER
10,144(2) | |
| 9 |
SOLE DISPOSITIVE POWER
338,942(1) | |
| 10 |
SHARED DISPOSITIVE POWER
10,144(2) |
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
349,086(1)(2) | |
| 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)
7.6%(3) |
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| 14 |
TYPE OF REPORTING PERSON
IN |
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(1) Mr. Galvin’s ownership includes 318,492 shares of Common Stock that may be acquired through the exercise of stock options (including 9,627 shares issuable upon the exercise of stock options vesting within 60 days of the date of this Schedule 13D) and 20,000 shares of Common Stock held by Mr. Galvin personally.
(2) Includes 10,144 shares held by TAG Partners, LLC (“TAG”), an investment partnership formed for the purpose of investing in SG Blocks, Inc. Mr. Galvin is a managing member of and has a controlling interest in TAG. Mr. Galvin may be deemed to beneficially own the shares of Common Stock owned by TAG. Mr. Galvin specifically disclaims beneficial ownership of the shares of Common Stock held by TAG, except to the extent of his pecuniary interest therein, and this shall not be deemed to be an admission that Mr. Galvin is a beneficial owner of such shares of Common Stock.
(3) All percentages reported herein are calculated based upon an aggregate of 4,257,238 shares of Common Stock outstanding as of October 27, 2017, as reported on the Company’s Quarterly Report on Form 10-Q, filed on November 8, 2017.
| CUSIP No. 78418A 307 | 13D | Page 3 of 7 Pages |
This Amendment No. 1 to Schedule 13D (“Amendment No. 1”) amends and restates the information set forth in the Schedule 13D filed by Tag Partners, LLC, Paul M. Galvin and Joseph Tacopina with the U.S. Securities and Exchange Commission (the “SEC”) on November 18, 2011 (the “Schedule 13D”) relating to their ownership interests in the common stock, par value $0.01 per share (the “Common Stock”) of SG Blocks, Inc., a Delaware corporation (the “Company”). This Amendment No. 1 is being filed solely on behalf of Mr. Galvin, due to changes in his ownership interest in the Company.
Item 1. Security and Issuer.
This Amendment No. 1 relates to the Common Stock of the Company. The Company’s principal executive offices are located at 195 Montague Street, 14th Floor, Brooklyn, NY 11201. The shares presented in this Amendment No. 1 are reflected to give effect to the Company’s 1-for-3 reverse stock split effected on February 28, 2017.
Item 2. Identity and Background.
(a) This Statement is filed by Paul M. Galvin, the Chief Executive Officer and Chairman of the Company. Mr. Galvin has a controlling interest in TAG due to his role as one of its managing members and, as such, may be deemed to have voting power and dispositive power over the Common Stock owned by TAG. Mr. Galvin specifically disclaims beneficial ownership of the shares of Common Stock held by TAG, except to the extent of his pecuniary interest therein.
(b) The principal business address of Mr. Galvin is c/o SG Blocks, Inc., 195 Montague Street, 14th Floor, Brooklyn, NY 11201.
(c) Mr. Galvin’s principal occupation is serving as the Chief Executive Officer and Chairman of the Board of Directors of the Company; he also serves as a managing member of TAG. TAG was formed for the purpose of holding securities, including the securities of SG Building Blocks, Inc. (formerly known as SG Blocks, Inc. (“SG Building”)). On November 4, 2011, CDSI Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), merged with and into SG Building (described in Item 3 as the “Merger”). Upon consummation of the Merger, SG Building became a wholly owned subsidiary and principal operating business of the Company. The Merger is further described in Item 3.
(d) During the last five years, Mr. Galvin has not been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors).
(e) During the last five years, Mr. Galvin has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction nor, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) Mr. Galvin is a citizen of the United States of America.
| CUSIP No. 78418A 307 | 13D | Page 4 of 7 Pages |
Item 3. Source and Amount of Funds or Other Consideration.
The shares held by TAG were received in connection with that certain Merger Agreement and Plan of Reorganization, dated July 27, 2011 (the “Merger Agreement”), by and among the Company, Merger Sub, SG Building and certain stockholders of SG Building, pursuant to which Merger Sub merged with and into SG Building (the “Merger”).
Under the terms of the Merger Agreement, upon consummation of the Merger, each share of common stock of SG Building outstanding immediately prior to the closing of the Merger was converted into the right to receive 20.1851851852 shares of Former Common Stock, as defined below. Under the terms of the Merger Agreement, fractional shares were rounded up to the next whole share. Accordingly, the Company issued 2,658,127 shares of Former Common Stock (adjusted for rounding) to TAG in consideration of the 131,687 shares of SG Building common stock held by TAG. All stock options previously granted to Mr. Galvin in connection with the Merger were thereafter cancelled in connection with the Company’s emergence from bankruptcy, as described below.
The Company and its subsidiaries voluntarily filed for Chapter 11 bankruptcy on October 15, 2015, from which the Company emerged on June 30, 2016. In connection with the emergence, all previously issued and outstanding shares of the Company’s common stock (the “Former Common Stock”) were deemed discharged, cancelled and extinguished, and, pursuant to the bankruptcy plan of reorganization (the “Plan”), the Company issued new Common Stock to the holders of Former Common Stock. TAG received 10,144 shares of Common Stock, on a post-reverse stock split basis. In accordance with the Plan, all stock options granted prior to June 30, 2016 were cancelled.
Pursuant to the SG Blocks, Inc. Stock Incentive Plan (the “Incentive Plan”), Mr. Galvin has been granted 393,846 options by the Company as consideration for his roles as Chief Executive Officer and Chairman of the Company. As of the date of this Amendment No. 1, 318,942 of such options are currently exercisable or will be exercisable within 60 days.
On June 27, 2017, in connection with the Company’s public offering of Common Stock pursuant to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 6, 2017 and effective as of June 21, 2017 (the “Public Offering”), Mr. Galvin used personal funds to acquire 20,000 shares of Common Stock for $5.00 per share, for aggregate consideration of approximately $100,000. No borrowed funds were used in the purchase of such shares.
Item 4. Purpose of Transaction.
Mr. Galvin acquired the shares of Common Stock reported in this Amendment No. 1 for investment purposes and as part of his compensation as an officer and director of the Company. Mr. Galvin may continue to be granted stock options or other equity compensation as part of his compensation as the Chief Executive Officer and Chairman of the Company. He may acquire additional securities of the Company or dispose of additional securities of the Company at any time and from time to time in the open market or otherwise.
Except for transactions in Mr. Galvin’s capacity as an officer or director of the Company and as set forth in this Amendment No. 1, Mr. Galvin has no present plans or proposals that would result in any of the actions described in paragraphs (a) through (j) of Item 4 of Schedule 13D. Mr. Galvin reserves the right in the future to formulate any such plans or proposals, and to take any actions with respect to their investments in the Company, including any or all of the actions described in paragraphs (a) through (j) of Item 4 of Schedule 13D.
| CUSIP No. 78418A 307 | 13D | Page 5 of 7 Pages |
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, Mr. Galvin may be deemed to beneficially own, in the aggregate, 349,086 shares of Common Stock, which represents approximately 7.6% of the Company’s outstanding shares of Common Stock. This number includes 20,000 shares of Common Stock held by Mr. Galvin directly, 318,942 options granted to Mr. Galvin by the Company that are or will be exercisable within 60 days of the date of this Amendment No. 1 and 10,144 shares of Common Stock held by TAG, over which Mr. Galvin has shared voting and dispositive power.
Mr. Galvin’s percentage ownership of Common Stock set forth in this Amendment No. 1 is based upon an aggregate of 4,257,238 shares of Common Stock outstanding as of October 27, 2017, as reported on the Company’s Quarterly Report on Form 10-Q, filed on November 8, 2017.
(b) Mr. Galvin has sole voting and dispositive power over 338,942 shares of Common Stock held by him, including 318,942 options granted to Mr. Galvin by the Company that are or will be exercisable within 60 days of the date of this Amendment No. 1. Mr. Galvin has shared voting and dispositive power over the 10,144 shares of Common Stock held by TAG through his position as one of the managing members of TAG.
(c) Mr. Galvin was granted options to purchase 185,425 shares of Common Stock in connection with the Public Offering (the “Offering Options”), which options were to vest and become exercisable based on the achievement of certain performance thresholds. On October 24, 2017, all of the Offering Options vested and became exercisable, with 105,957 of such options having an exercise price of $5.00 per share and 79,468 of such options having an exercise price of $6.00 per share.
(d) Other than Joseph Tacopina, another managing member of TAG, solely in regards to the shares of Common Stock held by TAG, no person other than Mr. Galvin is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such shares of Common Stock.
(e) Not applicable.
| CUSIP No. 78418A 307 | 13D | Page 6 of 7 Pages |
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
The information set forth in Items 3, 4 and 5 above is incorporated in this Item 6 in its entirety.
Mr. Galvin is the Chief Executive Officer and Chairman of the Company and, accordingly, may have the ability to effect and influence control of the Company.
Employment and Stock Option Agreements
Mr. Gavin and the Company are parties to an Employment Agreement, dated March 10, 2017 and effective January 1, 2017. Mr. Gavin is also a party to various stock option agreements under the Incentive Plan, relating to his positions as Chief Executive Officer and Chairman of the Board of Directors of the Company.
Lock-Up Agreement
In connection with the Public Offering, Mr. Galvin entered into a lock-up agreement (the “Lock-Up Agreement”), pursuant to which he agreed not to, except in limited circumstances, offer, pledge, sell, contract to sell, grant, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock for a period 365 days from June 22, 2017. The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, which is filed as Exhibit 99.4 to this Amendment No. 1 and is incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits.
| CUSIP No. 78418A 307 | 13D | Page 7 of 7 Pages |
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this Amendment No. 1 is true, complete and correct.
Dated: November 20, 2017
| By: | /s/ Paul M. Galvin | |
| Paul M. Galvin |
EXHIBIT 99.4
Lock-Up Agreement
April __, 2017
The undersigned understands that Joseph Gunnar & Co., LLC (the “Representative”) proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”) with SG Blocks, Inc., a Delaware corporation (the “Company”), providing for the public offering (the “Public Offering”) of shares of common stock, par value $0.01 per share, of the Company (the “Shares”).
To induce the Representative to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Representative, the undersigned will not, during the period commencing on the date hereof and ending 180 or 365 days if a director or officer after the date of the final prospectus (the “Prospectus”) relating to the Public Offering (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions after the completion of the Public Offering; provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of a family member (for purposes of this lock-up agreement, “family member” means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; or (d) if the undersigned, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of Lock-Up Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as the case may be; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with this lock-up agreement.
If (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative waives, in writing, such extension; provided, however, that this extension of the Lock-Up Period shall not apply to the extent that FINRA has amended or repealed NASD Rule 2711(f)(4), or has otherwise provided written interpretive guidance regarding such rule, in each case, so as to eliminate the prohibition of any broker, dealer, or member of a national securities association from publishing or distributing any research report, with respect to the securities of an Emerging Growth Company prior to or after the expiration of any agreement between the broker, dealer, or member of a national securities association and the Emerging Growth Company or its shareholders that restricts or prohibits the sale of securities held by the Emerging Growth Company or its shareholders after the initial public offering date.
The undersigned agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during the period from the date hereof to and including the 34th day following the expiration of the initial Lock-Up Period, the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as may have been extended pursuant to the previous paragraph) has expired.
If the undersigned is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable to any issuer-directed or “friends and family” Shares that the undersigned may purchase in the Public Offering; (ii) the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two (2) business days before the effective date of the release or waiver. Any release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in effect at the time of such transfer.
No provision in this agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities exercisable or exchangeable for or convertible into Shares, as applicable; provided that the undersigned does not transfer the Shares acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted pursuant to the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such a plan in such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period).
The undersigned understands that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.
The undersigned understands that, if the Underwriting Agreement is not executed by November 22, 2017, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder, then this lock-up agreement shall be void and of no further force or effect.
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Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.
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STOCKHOLDER |
| (Name - Please Print) | |
| (Signature) | |
| (Name of Signatory, in the case of entities - Please Print) | |
| (Title of Signatory, in the case of entities - Please Print) |
| Address: | ||
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