SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.__18__)
News Communications, Inc.
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(Name of Issuer)
Common Stock, $.01 par value ("the shares")
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(Title of Class of Securities)
652484601
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(CUSIP Number)
David Selengut, Esq. at Ellenoff Grossman & Schole LLP
370 Lexington Avenue NY NY 10017 212-370-1300
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 4, 2001
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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(b) (3) or (4), check the following box [ ].
*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 in 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. 652484601 13D Page 2 of 10 pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J. Morton Davis
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x ]
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3 SEC USE ONLY
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4 Source of Funds
See Item #3 herein.
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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
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NUMBER OF 7 SOLE VOTING POWER
SHARES 4,752,696
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 4,752,696
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,752,696
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[X] (1)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT
(1) The beneficial ownership of J. Morton Davis excludes shares owned by parties
to a Stockholders' Agreement as defined in Item 6 other than the Reporting
Parties.
CUSIP No. 652484601 13D Page 3 of 10 pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
D.H. Blair Investment Banking Corp.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X ]
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3 SEC USE ONLY
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4 Source of Funds
See Item #3 herein.
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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
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 2,835,412
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 2,835,412
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,835,412
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[X] (1)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.7%
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14 TYPE OF REPORTING PERSON*
BD
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*SEE,INSTRUCTIONS BEFORE FILLING OUT
(1) The beneficial ownership of D.H. Blair Investment Banking Corp excludes
shares owned by parties to a Stockholders' Agreement as defined in Item 6 other
than the Reporting Parties.
CUSIP No. 652484601 13D Page 4 of 10 pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rosalind Davidowitz
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X ]
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3 SEC USE ONLY
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4 Source of Funds
See Item #3 herein.
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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
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NUMBER OF 7 SOLE VOTING POWER
SHARES 1,787,717
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,787,717
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,787,717
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[X] (1)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.8%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT
(1) The beneficial ownership of Rosalind Davidowitz excludes shares owned by
parties to a Stockholders' Agreement as defined in Item 6 other than the
Reporting Parties.
Page 5 of 10 pages
Form 13D is hereby amended as follows:
Item 2. (a) J. Morton Davis, D.H. Blair Investment Banking Corp. ("Blair
Investment") and Rosalind Davidowitz, (together, the
"Reporting Parties").
Item 3. Source and Amount of Funds or Other Consideration:
D.H. Blair Investment Banking Corp. purchased 250,000
shares of Common Stock at a price of $1.00 per share. The source
of funds was working capital, a portion of which was from a
repayment of a note by Issuer to Blair Investment. These shares
were immediately surrendered to the Issuer.
Item 4 Purpose of Transaction
None of the purposes set forth in (a) through (j) of Item 4,
apply to this transaction.
Item 5. Interest in the Securities of the Issuer is amended in its entirety:
(a) As of June 4, 2001, Mr. Davis may be deemed to beneficially own
4,752,696 shares or 43% of the Issuer's shares issued and outstanding
as follows: (i) 129,567 shares owned directly by Mr. Davis, (ii)
2,454,999 shares owned by Blair Investment, (iii) Warrants to purchase
157,867 shares owned by Blair Investment (iv) 22,546 shares issuable
upon exercise of 5,900 shares of $10 convertible preferred stock owned
by Blair Investment, (v) 200,000 shares issuable upon conversion of 8%
Convertible Notes owned by Blair Investment, and (vi) 1,787,717 shares
owned by Rosalind Davidowitz (1).
As of June 4, 2001, Blair Investment may be deemed to beneficially own
2,835,412 shares or 25.7% of the Issuer's shares as indicated in (ii)
- (v) above.
As of June 4, 2001, Rosalind Davidowitz may be deemed to beneficially
own 1,787,717 shares or 16.8% of the Issuer's shares as indicated in
(vi) above.
(b) See numbers (7) - (10) on the cover page, of this form for each
Reporting Party.
The beneficial ownerhsip of the Reporting Parties excludes shares
owned by parties to a Stockholders' Agreement as defined in Item 6 of
the previously filed 13D and in Item 6 of this amended 13D, other than
the Reporting Parties.
NEWY1:2002512:3:6/5/01
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
The Reporting Parties, James A. Finkelstein ("James Finkelstein"), the
Issuer, Wilbur L. Ross ("Ross"), Jerry Finkelstein, the Finkelstein Foundation,
Inc. and Shirley Finkelstein (collectively, the "Jerry Finkelstein Group"),
Melvyn I. Weiss and the M&B Weiss Family Partnership (together, the "Weiss
Group") and the holders of the Issuer's $10 Convertible Preferred Stock entered
into a Letter Agreement, dated as of May 8, 2001 and consummated on June 4,
2001, pursuant to which, among other things, James Finkelstein was hired to
serve as President and Chief Executive Officer of the Issuer. The Letter
Agreement is attached as Exhibit 1 to this Schedule 13D and the terms thereof
are incorporated herein by reference.
Page 6 of 10 pages
Under the terms of the Letter Agreement, the Reporting Parties, the Weiss
Group, Ross, the Jerry Finkelstein Group and James Finkelstein have agreed,
subject to board approval and the receipt of a fairness opinion, to vote in
favor of the following plan (the "Going Private Plan") if proposed before May
15, 2002:
1. James Finkelstein or an entity controlled by James
Finkelstein would form a new entity ("Newco") and James Finkelstein
would contribute all shares of the Issuer's stock owned by him to
Newco.
2. James Finkelstein would purchase, for an aggregate of
$310,000, additional shares of Newco Common Stock which, after giving
effect to the transactions described below, would represent 50.1% of
the issued and outstanding Newco Common Stock.
3. Newco would enter into a merger or other agreement with
the Issuer pursuant to which Newco would acquire all of the shares of
the Issuer not owned by it for an aggregate consideration of $1.30 per
share on the following terms:
i. Each of the Jerry Finkelstein Group, Ross, the
Weiss Group, the Reporting Parties and the holders of the
Issuer's $10 Convertible Preferred Stock would receive for
each share of the Issuer's Common Stock owned by them
approximately 0.175 shares of Newco Common Stock (having a
value of approximately $.175) and approximately $1.125
principal amount of Newco's 5% Subordinated Notes (the
"Control Shareholder Consideration").
ii. All other stockholders of the Issuer will receive
for each of the Issuer's shares owned by them $.35 in cash and
$.95 principal amount of Newco's 8% Senior Subordinated Notes
due on the fourth anniversary of the consummation of the
merger (the "General Shareholder Consideration").
Pursuant to the terms of the Letter Agreement, the following documents were
delivered and the following transactions were consummated:
1. James Finkelstein, the Jerry Finkelstein Group, Ross,
the Weiss Group and the Reporting Parties (each member of the Jerry
Finkelstein Group, Ross, the Reporting Parties and the Weiss Group and
James Finkelstein, individually, a "Stockholder" and collectively the
"Stockholders") entered into a Stockholders' Agreement dated as of May
8, 2001 and consummated on June 4, 2001 (the "Stockholders'
Agreement"). The Stockholders' Agreement is attached as Exhibit 2 to
this Schedule 13D and the terms thereof are incorporated herein by
reference.
Page 7 of 10 pages
Pursuant to the terms of the Stockholders' Agreement,
subject to limited exceptions, James Finkelstein has been granted an
irrevocable proxy to vote all of the shares held by the Reporting
Parties (the "Reporting Parties Shares") until such time as James
Finkelstein ceases to be employed as the President and Chief Executive
Officer of the Issuer. In addition, the Stockholders' Agreement
provides that, for so long as James Finkelstein is President and Chief
Executive Officer of the Issuer, the Stockholders have agreed to act to
maintain the size of the Issuer's Board of Directors at 9 members and
to vote their shares so as to elect as directors of the Issuer as
follows: (i) four persons designated by James Finkelstein, one of whom
shall initially be James Finkelstein and one of whom shall initially be
Jerry Finkelstein; (ii) one person designated by Ross who shall
initially be Ross; (iii) one person designated by the Weiss Group who
shall initially be Gary Weiss; (iv) one person designated by the
Reporting Parties who shall initially be Martin A. Bell; and (v) two
persons designated by the mutual agreement of the Reporting Parties,
the Weiss Group and Ross.
2. Blair Investment and the Issuer entered into a
Subscription Agreement dated as of May 8, 2001 which was consummated on
June 4, 2001 (the "Blair Subscription Agreement") pursuant to which
Blair Investment purchased 250,000 shares of the Issuer's Common Stock
at a purchase price of $1.00 per share. The shares purchased were
immediately surrendered to the Issuer in order for the Issuer to
satisfy its obligations to James Finkelstein under the terms of the
Finkelstein Subscription Agreement described below. The Blair
Subscription Agreement is attached as Exhibit 3 to this Schedule 13D
and the terms thereof are incorporated herein by reference.
3. Blair Investment and the Issuer entered into a second
Subscription Agreement dated as of May 8, 2001 which was consummated on
June 4, 2001 (the "Blair Debt Conversion Subscription Agreement")
pursuant to which Blair Investment converted $150,000 of the Issuer's
indebtedness to Blair Investment plus accrued interest of $7,594.82
into shares of the Issuer's Common Stock at a purchase price of $1.00
per share, resulting in the issuance of 7,595 shares of the Issuer's
Common Stock to Blair Investment. The Blair Debt Conversion
Subscription Agreement is attached as Exhibit 4 to this Schedule 13D
and the terms thereof are incorporated herein by reference.
4. Rosalind Davidowitz and the Issuer entered into a
Subscription Agreement dated as of May 8, 2001 which was consummated on
June 4, 2001 (the "Davidowitz Subscription Agreement") pursuant to
which Ms. Davidowitz converted all $1,000,000 of the Issuer's
indebtedness to Ms. Davidowitz plus accrued interest of $38,575.51 into
shares of the Issuer's Common Stock at a purchase price of $1.00 per
share, resulting in the issuance of 1,038,575 shares of the Issuer's
Common Stock to Ms. Davidowitz. The Davidowitz Conversion Subscription
Agreement is attached as Exhibit 5 to this Schedule 13D and the terms
thereof are incorporated herein by reference.
5. James Finkelstein and the Issuer entered into a
Subscription Agreement dated as of May 8, 2001 which was consummated on
June 4, 2001 (the "Finkelstein Subscription Agreement") pursuant to
which James Finkelstein agreed to purchase 750,000 shares of the
Issuer's Common Stock. In addition, in consideration for James
Finkelstein's purchase of shares, the Issuer issued to James
Finkelstein an additional 250,000 shares of the Issuer's Common Stock
(the "Adjustment Shares") which Blair Investment had surrendered. The
Finkelstein Subscription Agreement provides that if, on the second
anniversary of the date of the Finkelstein Subscription Agreement, the
fair market value of the equity securities of the Issuer is equal to or
greater than $46,000,000 (an "Adjustment Event"), then James
Finkelstein would transfer the Adjustment Shares (or any securities
received in respect of the Adjustment Shares) to Blair Investment
unless the Going Private Plan occurs, in which case James Finkelstein
would deliver to Blair Investment the number of shares of Newco Common
Stock and the Newco Subordinated Notes that Blair Investment would have
received had it owned the Adjustment Shares on the date of the
consummation of the transaction between the Issuer and Newco. Blair
Investment was specifically designated as a third party beneficiary of
the Finkelstein Subscription Agreement. The Finkelstein Subscription
Agreement is attached as Exhibit 6 to this Schedule 13D and the terms
thereof are incorporated herein by reference.
Page 8 of 10 pages
In connection with the consummation of the transactions
contemplated by the Letter Agreement, the following transactions also took place
involving the Reporting Parties:
1. On or about June 4, 2001, the Issuer repaid the principal
amount of $300,000 plus accrued interest outstanding on a certain
Revolving Note dated March 30, 2001, and the corresponding revolving
credit facility was terminated. The Loan Agreement evidencing such
revolving credit facility provided that upon repayment in full of the
advances under the revolving loans, the Issuer would issue to Blair
Investment warrants at an exercise price of $1.00 per share in an
amount equal to the aggregate revolving loans outstanding at any one
time during the term of the Loan Agreement. Accordingly, upon payment
in full of the revolving loans, the Issuer issued to Blair Investment
warrants to purchase 300,000 shares of the Issuer's Common Stock at an
exercise price of $1.00 per share (the "Credit Facility Warrants").
The Credit Facility Warrants are attached as Exhibit 7 to this
Schedule 13D and the terms thereof are incorporate herein by
reference.
2. Blair Investment entered into a Warrant Purchase Agreement
with James Finkelstein, dated as of April 19, 2001 and effective June
4, 2001, pursuant to which James Finkelstein purchased from Blair
Investment one-half of the Credit Facility Warrants, or warrants to
purchase up to 150,000 shares of the Issuer's Common Stock at an
exercise price of $1.00 per share. The purchase price for such
warrants under the Warrant Purchase Agreement was $0.01 per warrant,
or an aggregate of $1,500. The form of Warrant Purchase Agreement is
attached as Exhibit 8 to this Schedule 13D and the terms thereof are
incorporated herein by reference.
3. Blair Investment executed a letter dated May 8, 2001
and delivered to each holder of the Issuer's $10 Convertible Preferred
Stock (the "$10 Letter Agreement"). Under the terms of the $10 Letter
Agreement, if the Going Private Plan occurs, Blair Investment agreed to
ensure that the holders of the Issuer's $10 Convertible Preferred Stock
would receive common stock in Newco having a value of $.20 per share.
This would be effectuated by Blair Investment transferring to each
holder of $10 Convertible Preferred Stock such number of shares of
Newco's common stock necessary for each holder of $10 Convertible
Preferred Stock to receive 0.2 shares of Newco's common stock having a
value of $.20 per share. In exchange for such transfer, each holder of
the $10 Convertible Preferred Stock would transfer to Blair Investment
subordinated notes in Newco having a value equal to the Newco shares
transferred. The $10 Letter Agreement is attached as Exhibit 9 to this
Schedule 13D and the terms thereof are incorporated herein by reference
4. Blair Investment also entered into a letter agreement
with Ross, Melvyn I. Weiss ("Weiss"), Jerry Finkelstein and Hillel
Weinberger dated May 23, 2001 (the "Weinberger Letter"). Under the
terms of the Weinberger Letter, Blair Investment, Ross, Weiss and Jerry
Finkelstein agreed to exchange, on a pro rata basis, 150,000 shares of
the Issuer's Common Stock which would be entitled to receive the
Control Shareholder Consideration for the 150,000 shares of the
Issuer's Common Stock owned by Mr. Weinberger with respect to which Mr.
Weinberger would be entitled to receive the General Shareholder
Consideration. The Weinberger Letter is attached as Exhibit 10 to this
Schedule 13D and the terms thereof are incorporated herein by reference
The foregoing description of each of the agreements
incorporated by reference into this Item 6 are qualified by reference to the
actual agreement attached as an exhibit to this Schedule 13D.
Page 9 of 10 pages
Item 7. Material to be Filed as Exhibits.
---------------------------------
The following are filed herewith as Exhibits:
Exhibit Description
1. Letter Agreement dated as of May 8, 2001 by and between News
Communications, Inc. and James Finkelstein.
2. Stockholders' Agreement dated as of May 8, 2001 by and
among Jerry Finkelstein, The Finkelstein Foundation, Inc.,
Shirley Finkelstein, Wilbur L. Ross, Jr.; Melvyn I. Weiss,
M&B Weiss Family Partnership, J. Morton Davis, D.H. Blair
Investment Banking Corp., Rivkalex Corporation, Rosalind
Davidowitz, and James Finkelstein.
3. Subscription Agreement dated as of May 8, 2001 by and
between News Communications, Inc. and D.H. Investment
Banking Corp. for the purchase of 250,000 shares of common
stock
4. Subscription Agreement dated as of May 8, 2001 by and
between News Communications, Inc. and D.H. Investment
Banking Corp. for the purchase of 150,000 shares of common
stock
5. Subscription Agreement dated as of May 8, 2001 by and
between News Communications, Inc. and Rosalind Davidowitz
for the purchase of 1,000,000 shares of common stock.
6. Subscription Agreement dated as of May 8, 2001 by
and between News Communications, Inc. and James Finkelstein
for the purchase of 750,000 shares of common stock.
7. Warrant to purchase 150,000 shares of common stock of
News Communications, Inc. at $1,00 per share.
8. Warrant Purchase Agreement dated as of April 19, 2001
by and between D.H. Blair Investment Banking Corp. and James
Finkelstein.
9. Form of Letter from D.H. Blair Investment Banking Corp.
to the holders of $10 Convertible Preferred Stock of News
Communications, Inc.
10. Letter Agreement dated May 23, 2001 by and among Wilbur
L. Ross, Jr., Melvyn I. Weiss, Jerry Finkelstein and Hillel
Weinberger.
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(1) Filing of this statement shall not be deemed an admission that J. Morton
Davis or Blair Investment beneficially own securities attributed to
Rosalind Davidowitz for any purpose. J. Morton Davis and Blair Investment
expressly disclaim beneficial ownership of all securities held by Rosalind
Davidowitz for any purpose. Rosalind Davidowitz expressly disclaims
beneficial ownership of all securities owned by Mr. Davis or Blair
Investment for any purpose.
Page 10 of 10 pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, we certify
that the information set forth in this statement is true, complete and correct.
/s/ J. Morton Davis
Date: June 7, 2001 ________________________
New York, New York J. Morton Davis
D.H. BLAIR INVESTMENT BANKING CORP.
by: /s/ David Nachamie
Date: June 7, 2001 _____________________________
New York, New York David Nachamie
Treasurer
Date: June 7, 2001 /s/ Rosalind Davidowitz
New York, New York ____________________________
Rosalind Davidowitz