SC 13D/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D/A
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO § 240.13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO § 240.13d-2(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 2)

National Holdings Corporation

(Name of Issuer)

Common Stock, par value $0.02 per share

(Title of Class of Securities)

636375206

(CUSIP Number)

Bryant R. Riley
B. Riley Financial, Inc.
21255 Burbank Boulevard, Suite 400
Woodland Hills, CA 91367
(818) 9884-3737

with a copy to:

 Sara L. Terheggen
The NBD Group, Inc.
350 N. Glendale Avenue, Ste B522
Glendale, CA 91206
(310) 890-0110

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

April 30, 2020

(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).

SCHEDULE 13D

CUSIP No.  636375206

1	NAMES OF REPORTING PERSONS
	NHC Holdings, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a)  ☐ (b)  ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)
	AF
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)     ☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER
		0
	8	SHARED VOTING POWER
		6,159,550
	9	SOLE DISPOSITIVE POWER
		0
	10	SHARED DISPOSITIVE POWER
		6,159,550

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	6,159,550
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)    ☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	46.4%*
14	TYPE OF REPORTING PERSON (See Instructions)
	OO

* Percentage calculated based on 13,278,835 shares of common stock, par value $0.02 per share, outstanding as of January 17, 2020, as reported in the Annual Report on Form 10-K/A filed by National Holdings Corporation with the Securities Exchange Commission on January 28, 2020. 

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CUSIP No.  636375206

1	NAMES OF REPORTING PERSONS
	B. Riley Financial, Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a)  ☐ (b)  ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)
	WC
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)      ☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER
		0
	8	SHARED VOTING POWER
		6,159,550
	9	SOLE DISPOSITIVE POWER
		0
	10	SHARED DISPOSITIVE POWER
		6,159,550

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	6,159,550
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)    ☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	46.4%*
14	TYPE OF REPORTING PERSON (See Instructions)
	HC

* Percentage calculated based on 13,278,835 shares of common stock, par value $0.02 per share, outstanding as of January 17, 2020, as reported in the Annual Report on Form 10-K/A filed by National Holdings Corporation with the Securities Exchange Commission on January 28, 2020.

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This Amendment No. 2 hereby amends and supplements the Schedule 13D filed with the Securities and Exchange Commission on November 26, 2018 (the “Original 13D”), as amended by Amendment No. 1 to the Original 13D filed with the SEC on February 20, 2019 (“13D/A” and together with the Original 13D, the “Schedule 13D”), relating to the common stock, par value $0.02 per share (the “Common Stock”), of National Holdings Corporation, a Delaware corporation (the “Issuer”). Capitalized terms used but not defined herein shall have the respective meanings set forth in the Schedule 13D. Except as otherwise described herein, the information contained in the Schedule 13D remains in effect.  

Item 4.    Purpose of Transaction

Item 4 of the Schedule 13D is hereby amended to add a new paragraph at the end as follows:

As previously reported, the Reporting Persons acquired the Shares described in this Schedule 13D for investment purposes, and the Reporting Persons review the performance of the Issuer and their investment in the Issuer on a continuing basis.  As a result of that review, the Reporting Persons have held discussions with the Issuer concerning the Issuer’s cost structure, including the costs associated with remaining a public reporting company.  The Reporting Persons intend to continue to have discussions with the Issuer regarding these matters, including the Reporting Persons’ belief that the Issuer should consider reducing costs by de-listing from the Nasdaq Capital Market and, subject to applicable law, ceasing to be a public reporting company.  To that end, on April 30, 2020, BRF (one of the Reporting Persons) has made a non-binding proposal to the Board of Directors of the Issuer to acquire the outstanding shares of Common Stock not held by management at a price per share of $2.00.  A copy of the Reporting Person’s letter to the Board of Directors of the Issuer is attached hereto as Exhibit 1. The Issuer provided BRF with a waiver of certain of the restrictions in the Issuer Agreement in connection with that non-binding proposal, a copy of which is attached hereto as Exhibit 2. The Reporting Persons expect to have further discussions and communications with the Issuer and its Board of Directors regarding these matters.  There can be no assurance that any of the matters described herein will be completed, and nothing herein is or shall be deemed to be an offer to buy, or the solicitation of any offer to sell, any shares of Common Stock of the Issuer.

Item 5.    Interest in Securities of the Issuer

Item 5(a) of the Schedule 13D is hereby amended and restated as follows:

(a)

As of the date hereof, the Reporting Persons may be deemed to beneficially own 6,159,550 shares of Common Stock, which represents approximately 46.4% of the Issuer’s outstanding shares of Common Stock. Each percentage ownership of shares of Common Stock set forth in this Statement is based on 13,278,835 shares of common stock, par value $0.02 per share, outstanding as of January 17, 2020, as reported in the Annual Report on Form 10-K/A filed by National Holdings Corporation with the Securities Exchange Commission on January 28, 2020. Item 5(c) of the Schedule 13D is hereby amended and restated as follows:

(c)

The disclosure required by this Item and included in Item 4 is incorporated by reference. Except for the preliminary discussions reported in Item 4, no transactions in the Common Stock were effected during the past sixty days by the Reporting Persons.

Item 7.    Material to Be Filed as Exhibits

The following documents are filed as exhibits:

Exhibit Number	Description
1	Letter to the Issuer’s Board of Directors, dated as of April 30, 2020.
2	Waiver of Certain Provisions of Issuer Agreement, dated as of April 30, 2020.

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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.

NHC HOLDINGS, LLC
By:	/s/ Phillip J. Ahn
Name:	Phillip J. Ahn
Title:	Authorized Signatory

B. RILEY FINANCIAL, INC.
By:	/s/ Bryant R. Riley
Name:	Bryant R. Riley
Title:	Co-Chief Executive Officer

 Date: May 1, 2020

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EX-99.1

Exhibit 1

21255 Burbank Blvd., Ste. 400 Woodland Hills, CA 91367 Tel: (818) 884-3737 www.brileyfin.com

April 30, 2020

National Holdings Board of Directors

Gentlemen:

As you know, we believe that the business model of National Holdings is unsustainable without making meaningful changes. While we are encouraged by the steps management has taken to lower costs, we believe the next step is to significantly reduce the costs of being a public company. As you are keenly aware, two shareholders, B. Riley and Dan Asher, own approximately 8.7M of the 13.2M shares outstanding. Management and the Board have been granted another 1.3M shares. Independent shareholders own approximately 3.2M shares currently representing a total value of $4.4M. Additionally, the total dollar amount of shares traded year to date is $1.07M. These facts demonstrate beyond dispute that the benefits of being public are far outweighed by the tremendous costs.

An alternative to being public is to “go dark”. B. Riley has significant experience in this area and would point to bebe stores, inc. as the most recent example. B. Riley owns approximately 40% of the shares of bebe and worked with management to list on the OTC. The result was a near 80% in savings between board, accounting, legal and insurance fees. As for trading, there has been very little drop in volume and a portion of the public cost savings has been used to pay all bebe shareholders a $.75 annual dividend. We believe that National could also benefit from this change and has even more reasons than bebe did to go dark, including more concentrated ownership and higher costs than bebe.

B. Riley is also willing to give its fellow shareholders a choice in this matter and would be willing to acquire all shares not owned by the current management team at $2.00 per share. This would apply to independent board members. While we appreciate that this proposal will need to be vetted, we believe that this is a very fair, transparent and shareholder-friendly approach. We trust that you too will see the merits of such a transaction and will act quickly in order to provide the associated savings to National’s shareholders. Of course, the proposal to acquire the non-management shares is non-binding and subject to, among other things, reaching satisfactory arrangements with National and definitive documentation as appropriate.

I hope you recognize the spirit with which this letter is being delivered and look forward to hearing from you as soon as possible.

Sincerely,

/s/ Bryant Riley

Bryant Riley

Chairman & Co-CEO

EX-99.2

Exhibit 2

April 30, 2020

B. Riley Financial, Inc.

21255 Burbank Blvd.

Suite 400

Woodland Hills, CA 91367

Attention: Bryant Riley

Re: Agreement dated as of November 14, 2018 (the “Agreement”), by and among B. Riley Financial, Inc. (“B. Riley”) and National Holdings Corp. (“National”)

Ladies and Gentlemen:

B. Riley has requested National’s consent to waive the provisions of the Standstill paragraph of the Agreement to permit B. Riley to submit a written proposal (the “Proposal”) to the National Board of Directors (the “Board”) relating to a proposed transaction (the “Waiver Request”).

National hereby grants the Waiver Request on the following terms and conditions:

1. B. Riley shall be permitted to deliver the Proposal to the members of the Board via confidential email. B. Riley shall not take any other action that would otherwise be prohibited under the Agreement.

2. Except for the Form 13D/A in the form previously delivered by B. Riley to Michael Mullen, CEO of National, B. Riley shall not, and shall cause its affiliates and any persons acting in concert with it to not, make any public announcement or other disclosure regarding the Proposal (or any other proposal involving the Company that would be prohibited under the Agreement) without the prior written consent of National or otherwise take any action that would reasonably be expected to result in an obligation of National to make any public disclosure regarding the Proposal (or any such other proposal).

3. Except as and to the extent expressly set forth above, National’s grant of the Waiver Request shall not constitute a waiver of any of National’s rights under the Agreement, all of which rights are expressly reserved by National.

B. Riley Financial, Inc.

April 30, 2020

Page 2

Please confirm B. Riley’s acceptance of the foregoing terms and conditions by signing this letter in the space indicated below.

National Holdings Corporation
By:	/s/ Michael Mullen
Name:	Michael Mullen
Title:	Chief Executive Officer

Accepted and agreed to this 30th day of April, 2020.

B. Riley Financial, Inc.

By:	/s/ Bryant Riley
Name:	Bryant Riley
Title:	Chairman and Co-Chief Executive Officer