UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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)
National Holdings Corporation
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
636375107
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(CUSIP Number)
Strategic Turnaround Equity Partners, LP
c/o Galloway Capital Management, LLC
720 Fifth Avenue, 10th Floor
New York, N.Y. 10019
(212) 247-0581
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
April 3, 2006
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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 which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the
following box: [ ]
SCHEDULE 13D
CUSIP No. 636375107
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bruce Galloway
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS OO
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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
NUMBER OF 237,200
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 390,771
EACH --------------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 237,200
WITH --------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
390,771
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
627,971 (1)
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.02%
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14) TYPE OF REPORTING PERSON
IN
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(1) Includes 237,200 shares of Common Stock held by Mr. Galloway through Bruce
Galloway, IRA, 98,571 shares of Common Stock held by members of Mr. Galloway's
immediate family in accounts over which Mr. Galloway has full investment
discretion and 13,000 held by Rexon Galloway Capital Growth. Mr. Galloway has
full investment discretion in Rexon Galloway Capital Growth, an investment
company in which Mr. Galloway is a 50% owner. Also includes 279,200 shares held
by Stategic Turnaround Equity Partners, LP ("STEP"). Mr. Galloway is a managing
member and the majority equity holder of Galloway Capital Management, LLC, the
general partner of STEP. Mr. Galloway disclaims beneficial ownership of the
shares of Common Stock directly beneficially owned by Strategic Turnaround
Equity Partners, L.P. (except for (i) the indirect interests of Mr. Galloway by
virtue of being a member of Galloway Capital Management LLC, and (ii) the
indirect interests of Mr. Galloway by virtue of being a limited partner of
STEP).
SCHEDULE 13D
CUSIP No. 636375107
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Strategic
Turnaround Equity Partners, LP
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS OO
------------------------------------------------------------------------------
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
NUMBER OF 0
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 279,200
EACH --------------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 0
WITH --------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
279,200
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
279,200 (2)
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.34%
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14) TYPE OF REPORTING PERSON
IN
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(2) Includes 171,200 shares of common stock is held by STEP from shares
transferred transferred to STEP by limited partners, including Mr. Galloway, who
transferred 100,000 shares.
SCHEDULE 13D
CUSIP No. 636375107
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gary Herman
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS OO
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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
NUMBER OF 6,000
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 279,200
EACH --------------------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON 6,000
WITH --------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
279,200
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
285,200 (3)
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.46%
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14) TYPE OF REPORTING PERSON
IN
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(3) Includes 6,000 shares of Common Stock held by Mr. Herman as well as 279,200
shares in STEP. Mr. Herman is a managing member of Galloway Capital Management,
LLC, the general partner of STEP. Mr. Herman disclaims beneficial ownership of
the shares of Common Stock directly beneficially owned by Strategic Turnaround
Equity Partners, L.P. (except for the indirect interests of Mr. Herman by virtue
of being a member of Galloway Capital Management LLC).
Item 1. Security and Issuer.
The class of equity securities to which this statement relates is the
common stock, par value $.02, (the "Common Stock") of National Holdings
Corporation, a Delaware corporation, (the "Company"). The principal executive
offices of the Company are located at 875 North Michigan Avenue, Suite 1560,
Chicago, IL 60611.
Item 2. Identity and Background.
This statement is being filed jointly by Strategic Turnaround Equity
Partners, L.P., Galloway Capital Management LLC, Gary L. Herman and Bruce
Galloway (collectively, the "Reporting Persons").
Strategic Turnaround Equity Partners, L.P., is a Delaware limited
liability partnership and is a fund focused on investing primarily in
undervalued public equities. Galloway Capital Management LLC is a Delaware
limited liability company principally engaged in serving as the general partner
of Strategic Turnaround Equity Partners, L.P. Gary L. Herman and Bruce Galloway
are citizens of the United States and (i) managing members of Galloway Capital
Management LLC, (ii) Mr. Galloway is a holder of the majority of the membership
interests in Galloway Capital Management LLC, and (iii) Mr. Galloway is a holder
of the majority of the partnership interests in Strategic Turnaround Equity
Partners, L.P.
The name and positions of the general partners and managing members of
each of the Reporting Persons are set forth below.
Strategic Turnaround Equity Partners, L.P. Delaware limited partnership
General Partner - Galloway Capital
Management LLC
Galloway Capital Management LLC Delaware limited liability company
Managing Member - Gary L. Herman
Managing Member - Bruce Galloway
Gary L. Herman Citizenship - United States
Managing Member - Galloway
Capital Management LLC
Managing Member - Strategic
Turnaround Equity Partners, L.P.
Bruce Galloway Citizenship - United States
Managing Member - Galloway
Capital Management LLC
Managing Member - Strategic
Turnaround Equity Partners,
L.P.
The address of the principal business office of Strategic Turnaround Equity
Partners, L.P., Galloway Capital Management LLC, Gary L. Herman and Bruce
Galloway is c/o Strategic Turnaround Equity Partners, L.P., 720 Fifth Avenue,
10th Floor, New York, New York 10019.
None of the Reporting Persons has , during the last five years, been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and 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.
Item 3. Source and Amount of Funds or Other Consideration.
In the last 90 days, STEP used investor funds to consummate the open
market purchases of 61,500 shares of Common Stock for an aggregate purchase
price of $78,834.75. Mr. Galloway acquired in the past 90 days shares of Common
Stock reported above through open market transactions for an aggregate purchase
price of $36,361.97 for 31,671 shares on behalf of himself and certain family
members. Mr. Galloway used personal funds to consummate such purchases.
Item 4. Purpose of Transaction.
All of the shares of Common Stock owned by the Reporting Persons were, at
the time of their purchase, acquired for investment purposes in the ordinary
course of business. None of the Reporting Persons have any present plans or
proposal that relates to or would result in any of the actions specified in
clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, Mr. Galloway may be deemed to beneficially own
an aggregate of 627,971 shares of Common Stock, representing approximately
12.02% of the outstanding Common Stock, based upon 5,223,968 shares of Common
Stock outstanding reported by the Company to be issued and outstanding as of May
9, 2006 in the Company's latest Quarterly Report on Form 10-Q as filed with the
Securities and Exchange Commission on May 10, 2005. This reflects 237,200 shares
of Common Stock held by Mr. Galloway through Bruce Galloway, IRA and 98,571
shares of Common Stock held by members of Mr. Galloway's immediate family in
accounts over which Mr. Galloway has full investment discretion and 13,000
shares held by Rexon Galloway Capital Growth. Mr. Galloway has full investment
discretion in Rexon Galloway Capital Growth, an investment company in which Mr.
Galloway is a 50% owner. This percentage also reflects 279,200 shares held by
Stategic Turnaround Equity Partners, LP ("STEP"). Mr. Galloway is a managing
member and the majority equity holder of Galloway Capital Management, LLC, the
general partner of STEP. Mr. Galloway disclaims beneficial ownership of the
shares of Common Stock directly beneficially owned by Strategic Turnaround
Equity Partners, L.P. (except for (i) the indirect interests of Mr. Galloway by
virtue of being a member of Galloway Capital Management LLC, and (ii) the
indirect interests of Mr. Galloway by virtue of being a limited partner of
STEP).
As of the date hereof, Mr. Herman may be deemed to beneficially own an
aggregate of 285,200 shares of Common Stock, representing approximately 5.46% of
the outstanding Common Stock, based upon 5,223,968 shares of Common Stock
outstanding reported by the Company to be issued and outstanding as of May 9,
2006 in the Company's latest Quarterly Report on Form 10-Q as filed with the
Securities and Exchange Commission on May 10, 2006. This relects 6,000 shares of
Common Stock held by Mr. Herman as well as 279,200 shares in STEP. Mr. Herman is
a managing member of Galloway Capital Management, LLC, the general partner of
STEP. Mr. Herman disclaims beneficial ownership of the shares of Common Stock
directly beneficially owned by Strategic Turnaround Equity Partners, L.P.
(except for the indirect interests of Mr. Herman by virtue of being a member of
Galloway Capital Management LLC).
As of the date hereof, STEP may be deemed to beneficially own an aggregate
of 279,200 shares of Common Stock, representing approximately 5.34% of the
outstanding Common Stock, based upon 5,223,968 shares of Common Stock
outstanding reported by the Company to be issued and outstanding as of May 9,
2006 in the Company's latest Quarterly Report on Form 10-Q as filed with the
Securities and Exchange Commission on May 10, 2006.
(b) As of the date hereof, Mr. Galloway has the sole power to vote 237,900
shares of Common Stock and sole power to dispose of 237,900 shares of Common
Stock.
As of the date hereof, Mr. Herman has the sole power to vote 6,000 shares
of Common Stock and sole power to dispose of 6,000 shares of Common Stock.
As of the date hereof, STEP has shared power to vote 279,200 shares of
Common Stock and shared power to dispose of 279,200 shares of Common Stock.
(c) Purchases in the last 90 days (excluding commissions):
On February 8, 2006, Mr. Galloway, through Bruce Galloway IRA Rollover,
purchased 4,500 shares of Common Stock through an open market purchase at a per
share price of $1.3067.
On February 16, 2006, Mr. Galloway, through Bruce Galloway IRA Rollover,
purchased 5,000 shares of Common Stock through an open market purchase at a per
share price of $1.1045.
On February 16, 2006, Mr. Galloway, through Sara Herbert Galloway IRA
Rollover, purchased 6,000 shares of Common Stock through an open market purchase
at a per share price of $1.1045.
On February 17, 2006, STEP purchased 11,000 through an open market
purchase at a per share price of $1.0345.
On February 27, 2006 Mr. Galloway through Sara Herbert Galloway IRA
Rollover, purchased 1,000 shares of Common Stock through an open market purchase
at a per share price of $1.10.
On March 1, 2006, Mr. Galloway, through Sara Herbert Galloway, IRA
Rollover, purchased 1,000 shares of Common Stock through an open market purchase
at a per share price of $1.05.
On March 7, 2006, STEP purchased 1,000 shares of Common Stock through an
open market purchase at a per share price of $1.25.
On March 15, 2006, STEP purchased 5,000 shares of Common Stock through an
open market purchase at a per share price of $1.296.
On March 20, 2006, Mr. Galloway through Bruce Galloway IRA Rollover,
purchased 1,000 shares of Common Stock through an open market purchase at a per
share price of $1.45.
On April 3, 2006, STEP purchased 21,000 shares of Common Stock through an
open market purchase at a per share price of $1.4595.
On April 27, 2006, Mr. Galloway through Bruce Galloway IRA Rollover,
purchased 4,300 shares of Common Stock through an open market purchase at a per
share price of $1.3319.
On May 15, 2006, Mr. Galloway through Bruce Galloway IRA Rollover,
purchased 1,500 shares of Common Stock through an open market purchase at a per
share price of $1.2833.
On May 31, 2006, STEP purchased 22,500 shares of Common Stock through an
open market purchase at a per share price of $1.2367.
On June 5, 2006, STEP purchased 1,000 shares of Common Stock through an
open market purchase at a per share price of $1.25.
On June 7, 2006, Mr. Galloway, through Sara Herbert Galloway, IRA
Rollover, purchased 7,371 shares of Common Stock through an open market purchase
at a per share price of $1.2217.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understanding or Relationships With
Respect to Securities of the Issuer.
None of the Reporting Persons have any contracts, arrangements,
understandings or relationships with any person with respect to the Common Stock
of the Company, including but not limited to transfer or voting of any of the
securities, finder's fees, joint ventures, loan or option arrangement, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit A: Joint Filing Agreement
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of each of
the undersigned, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
Dated: June 9, 2006
Strategic Turnaround Equity Partners, LP
By: /s/ Gary Herman
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Name: Gary Herman
Title: Managing Member of Galloway
Capital Management, LLC, the
General Partner of Strategic
Turnaround Equity Partners, LP
Galloway Capital Management, LLC
By: /s/ Gary Herman
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Name: Gary Herman
Title: Managing Member
By:
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Bruce Galloway
By:
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Gary Herman
Exhibit A
Agreement of Joint Filing
Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of
1934, as amended, the undersigned persons hereby agree to file with the
Securities and Exchange Commission the Statement on Schedule 13D (the
"Statement") to which this Agreement is attached as an exhibit, and agree that
such Statement, as so filed, is filed on behalf of each of them.
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
Dated: June 9, 2006
Strategic Turnaround Equity Partners, LP
By: /s/ Gary Herman
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Name: Gary Herman
Title: Managing Member of Galloway
Capital Management, LLC, the
General Partner of Strategic
Turnaround Equity Partners, LP
Galloway Capital Management, LLC
By: /s/ Gary Herman
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Name: Gary Herman
Title: Managing Member
By:
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Bruce Galloway
By:
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Gary Herman