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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Ascendia Brands, Inc.
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(Name of Company)
Common Stock, par value $0.001 per share
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(Title of Class of Securities)
15670X104
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(CUSIP Number of Class of Securities)
Mathew Hoffman, Esq. Eleazer Klein, Esq.
Prentice Capital Management, LP Schulte Roth & Zabel LLP
623 Fifth Avenue, 32nd Floor 919 Third Avenue
New York, NY 10022 New York, NY 10022
(212) 756-8040 (212) 756-2376
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 3, 2006
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(Date of Event which Requires
Filing of this Schedule)
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 ss.ss.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 ss.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
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CUSIP NO. 15670X104 PAGE 2 OF 9 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Prentice Capital Management, LP
73-1728931
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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*
WC (See Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING 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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7 SOLE VOTING POWER
0
NUMBER OF --------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 3,322,482
EACH --------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
0
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10 SHARED DISPOSITIVE POWER
3,322,482
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
3,322,482
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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) (see Item 5)
23.9%
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14 TYPE OF REPORTING PERSON*
PN
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SCHEDULE 13D
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CUSIP NO. 15670X104 PAGE 3 OF 9 PAGES
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-------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Michael Zimmerman
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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*
WC (See Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING 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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7 SOLE VOTING POWER
0
NUMBER OF --------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 3,322,482
EACH --------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
0
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,322,482
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
3,322,482
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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) (see Item 5)
23.9%
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14 TYPE OF REPORTING PERSON*
IN
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SCHEDULE 13D
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CUSIP NO. 15670X104 PAGE 4 OF 9 PAGES
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AMENDMENT NO. 1 TO SCHEDULE 13D
Reference is made to the Statement on Schedule 13D filed on July 10, 2006
(the "Original Schedule 13D"), on behalf of Prentice Capital Management, LP
("Prentice Capital Management") and Michael Zimmerman ("Mr. Zimmerman" and,
together with Prentice Capital Management, the "Reporting Persons"), relating to
the Common Stock, par value $0.001 per share, of Ascendia Brands, Inc., a
Delaware corporation (the "Company"). Unless the context otherwise requires,
references herein to the "Shares" are to the Common Stock of the Company.
Capitalized terms used herein and not otherwise defined have the meanings given
to them in the Original Schedule 13D.
This Amendment No. 1 is being filed to report that the Securities Purchase
Agreement, the Bettinger Agreement and all of the transactions contemplated by
these agreements closed on August 3, 2006.
The Reporting Persons are making this single, joint filing because they may
be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the
Act. Each of Prentice Capital Management and Mr. Zimmerman disclaims beneficial
ownership of all of the Shares reported in this Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Original Schedule 13D is hereby amended by deleting such Item
3 in its entirety and replacing Item 3 so that it reads as follows:
Pursuant to the Bettinger Agreement, certain private investment funds and
managed accounts for which Prentice Capital Management and Mr. Zimmerman control
the investing and trading in securities (the "Prentice Parties") acquired, at
the closing of the transactions contemplated by the Bettinger Agreement,
3,322,482 Shares. The aggregate purchase price for the 3,322,482 Shares was
$4,983,723. Prentice Capital Management and Mr. Zimmerman do not directly own
any Shares. The Prentice Parties purchased the Shares with their investment
capital.
Additionally, pursuant to the Securities Purchase Agreement, the Prentice
Parties were issued, at the closing of the transactions contemplated by the
Securities Purchase Agreement, Notes and Warrants that are convertible into
Common Stock of the Company. The aggregate purchase price for the Notes and
Warrants is $91,000,000. If the Blocker was not in place, the notes would
initially be convertible into 52,000,000 Shares and the Series A Warrant would
be exercisable into 3,053,358 Shares. The Prentice Parties purchased the Notes
and Warrants with their investment capital.
SCHEDULE 13D
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CUSIP NO. 15670X104 PAGE 5 OF 9 PAGES
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ITEM 4. PURPOSE OF TRANSACTION
Item 4 of the Original Schedule 13D is hereby amended by deleting such Item
4 in its entirety and replacing Item 4 so that it reads as follows:
The Reporting Persons acquired the securities reported herein for
investment in the ordinary course of business. The Reporting Persons
acquired the securities reported herein because of their belief that the
Company represents an attractive investment based on the Company's business
prospects and strategy. Consistent with their investment purposes, the Reporting
Persons may further purchase, hold, vote, trade, dispose of, engage in short
selling of or any hedging or similar transactions with respect to the Shares or
otherwise deal in the Shares at times, and in such manner, as they deem
advisable to benefit from changes in the market price of such Shares, changes in
the Company's operations, business strategy or prospects, or from sale or merger
of the Company and based on other factors including, without limitation, the
price levels of the Shares, availability of funds, subsequent developments
affecting the Company, the Company's business, other investment and business
opportunities available to the Reporting Persons, conditions in the securities
market, general economic and industry conditions and other factors that the
Reporting Persons may deem relevant from time to time. Any acquisition or
disposition of Shares, or short sales or other hedging transaction with respect
to the Shares, by the Reporting Persons may be effected through open market or
privately negotiated transactions, or otherwise. The Reporting Persons may take
one or more actions set forth under subsections (a) through (j) of Item 4 of
Schedule 13D. The Reporting Persons may discuss such matters with management or
directors of the Company, other shareholders, industry analysts, existing or
potential strategic partners or competitors, and investment and financing
professionals. Such factors and discussions may materially affect, and result
in, the Reporting Persons' modifying their ownership of the Shares, exchanging
information with the Company pursuant to appropriate confidentiality or similar
agreements or otherwise. The Reporting Persons reserve the right to at any time
reconsider and change their plans or proposals relating to the foregoing. Except
as set forth herein, the Reporting Persons do not have any plan or proposal that
would relate to, or result in, any of the matters set forth under subsections
(a) through (j) of Item 4 of Schedule 13D.
Pursuant to a Stock Purchase Agreement dated as of June 30, 2006 (the
"Bettinger Agreement"), Steven Bettinger and Jodi Bettinger agreed to sell to
the Prentice Parties 3,322,482 Shares of the Company for $4,983,723. The closing
of the transactions contemplated by the Bettinger Agreement occurred on August
3, 2006, simultaneously with the closing of the transactions contemplated by the
Securities Purchase Agreement.
SCHEDULE 13D
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CUSIP NO. 15670X104 PAGE 6 OF 9 PAGES
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Pursuant to a Second Amended and Restated Securities Purchase Agreement
dated as of June 30, 2006 (the "Securities Purchase Agreement"), the Company
agreed to sell the Prentice Parties convertible notes (the "Notes") in the
principal amount of $91 million. The closing of the transactions contemplated by
the Securities Purchase Agreement occurred on August 3, 2006 (the "Closing").
The Securities Purchase Agreement provides that the Notes will have a term
of 10 years (subject to certain put and call rights described below) and will
bear interest at the rate of 9 percent per annum; provided that the Company may
elect to defer any interest payments until December 31, 2006. If the Company
consummates an Acquisition (as defined in the Notes), which Acquisition shall be
in form and substance satisfactory to, and approved by, the holders of Notes
representing at least a majority of the aggregate principal amount of the Notes
then outstanding, the Company may elect to defer and capitalize interest for the
balance of the term of the Notes. Any portion of the balance due under the Notes
will be, subject to the limitations imposed by the Note Blocker (as defined
below), convertible at any time, at the option of the holders(s), into the
common stock of the Company (the "Conversion Shares") at a price of $1.75 per
share (subject to certain anti-dilution adjustments).
THE HOLDER OF THE NOTES SHALL NOT HAVE THE RIGHT TO CONVERT ANY PORTION OF
THE NOTES TO THE EXTENT THAT AFTER GIVING EFFECT TO SUCH CONVERSION, THE HOLDER
(TOGETHER WITH ITS AFFILIATES) WOULD BENEFICIALLY OWN IN EXCESS OF 9.99% OF THE
NUMBER OF SHARES OUTSTANDING IMMEDIATELY AFTER GIVING EFFECT TO SUCH CONVERSION
(THE "NOTES BLOCKER"); PROVIDED THAT THE HOLDER OF THE NOTES MAY INCREASE OR
DECREASE SUCH PERCENTAGE TO ANY OTHER PERCENTAGE UPON NOTICE TO THE COMPANY;
PROVIDED, FURTHER, THAT ANY SUCH INCREASE WILL NOT BE EFFECTIVE UNTIL THE
SIXTY-FIRST (61ST) DAY AFTER SUCH NOTICE IS DELIVERED TO THE COMPANY.
The Notes rank as senior secured debt of the Company; provided however that
certain of the liens securing repayment of the Notes are subordinated to certain
of the liens securing repayment of the CIT Facility. The Notes will also be
subordinated to indebtedness, on terms and conditions reasonably satisfactory to
the Prentice Parties, incurred in connection with an Acquisition, in an amount
up to $250 million. The Company, the Prentice Parties and certain other parties
entered into amended and restated security documents at the Closing to reflect
these arrangements.
At the Closing, the Company issued warrants entitling the holders thereof
to purchase shares of its common stock ("Warrant Shares"). At the Closing, the
Company issued to the Prentice Parties a (i) Series A Warrant (the "Series A
Warrant") exercisable
SCHEDULE 13D
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CUSIP NO. 15670X104 PAGE 7 OF 9 PAGES
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into 3,053,358 Shares at an exercise price of $2.10 per share and (ii) a Series
B Warrant (the "Series B Warrant," together with the Series A Warrant, the
"Warrants"), exercisable on any day on or after the earlier of (x) the date of
the consummation of an Acquisition or (y) October 31, 2006, into up to 3,000,000
Shares. The exact number of Shares and the exercise price of the Shares (which
ranges from $1.15 to $1.95) underlying the Series B Warrant shall be determined
in accordance with the terms of the Series B Warrant. The number of Shares that
the Series B Warrant is exercisable into is dependent on the principal amount of
Notes outstanding at the time the Warrant is initially exercisable.
THE HOLDER OF EITHER WARRANT SHALL NOT HAVE THE RIGHT TO EXERCISE SUCH
WARRANT, TO THE EXTENT THAT AFTER GIVING EFFECT TO SUCH EXERCISE, THE HOLDER
(TOGETHER WITH ITS AFFILIATES) WOULD BENEFICIALLY OWN IN EXCESS OF 9.99% OF THE
SHARES OUTSTANDING IMMEDIATELY AFTER GIVING EFFECT TO SUCH EXERCISE; PROVIDED
THAT THE HOLDER OF THE WARRANTS MAY INCREASE OR DECREASE SUCH PERCENTAGE TO ANY
OTHER PERCENTAGE UPON NOTICE TO THE COMPANY; PROVIDED, FURTHER, THAT ANY SUCH
INCREASE WILL NOT BE EFFECTIVE UNTIL THE SIXTY-FIRST (61ST) DAY AFTER SUCH
NOTICE IS DELIVERED TO THE COMPANY.
At the Closing, the Company (i) paid Prentice Capital Management a closing
fee of $3,667,500, (ii) reimbursed Prentice Capital Management for certain
disbursements related to the transaction and (iii) paid certain private
investment funds and managed accounts managed by Prentice Capital Management and
Mr. Zimmerman accrued interest on the Company's existing bridge facility in the
amount of $4,058,370.32.
At the Closing, the Prentice Parties entered into an Amended and Restated
Registration Rights Agreement ("Registration Rights Agreement") with the Company
with respect to the Conversion Shares, the Warrant Shares and any Shares
currently held or subsequently acquired by the Prentice Parties, including the
Shares to be acquired pursuant to the Bettinger Agreement ("Registrable
Securities"). Under the Registration Rights Agreement, the Company is required
to file a registration statement with respect to the Registrable Securities not
less than 60 days following the Closing, and to use its best efforts to have
such registration statement declared effective not more than the earlier of 120
days following the filing deadline or 180 days following the Closing. The
Registration Rights Agreement contains customary penalties for the failure to
comply with such deadlines or to maintain the effectiveness of the registration
statement.
Additionally, the Company and certain of its stockholders entered into a
Voting Agreement (the "Voting Agreement") whereby the parties have agreed to
vote (a) in favor of the Stockholder Approval (as defined in the Securities
Purchase Agreement); (b) against any proposal or any other corporate action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the
Transaction Agreements (as defined in the Securities Purchase
SCHEDULE 13D
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CUSIP NO. 15670X104 PAGE 8 OF 9 PAGES
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Agreement) or which could reasonably be expected to result in any of the
conditions to the Company's obligations under the Transaction Agreements, as
applicable, not being fulfilled; (c) so long as the Prentice Parties or any of
their affiliates hold any Notes as and to the extent provided in the Securities
Purchase Agreement, in favor of one person designated by the Prentice Parties
and nominated by the Company (the "Prentice Nominee") to serve on the board of
directors of the Company; and (d) if the Prentice Parties request the Company to
take action to remove the Prentice Nominee as a director, in support of such
removal.
The foregoing descriptions of the Securities Purchase Agreement, the
Bettinger Agreement, the Notes, the Warrants, the Amended and Restated
Registration Rights Agreement and the Voting Agreement do not purport to be
complete and are qualified in their entirety by the terms of each such document
which are incorporated herein by reference in response to this Item 4 and which
have been filed as exhibits to the Company's Current Report on Form 8-K, filed
with the Securities and Exchange Commission on July 30, 2006.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE COMPANY.
Item 6 of the Original Schedule 13D is hereby amended by deleting such Item
6 in its entirety and replacing Item 6 so that it reads in its entirety as
follows:
As described in Item 4 above, the Prentice Parties purchased Shares
pursuant to a Stock Purchase Agreement with Steven Bettinger and Jodi Bettinger
dated as of June 30, 2006.
As described in Item 4 above, the Prentice Parties purchased Notes and
Warrants pursuant to a Second Amended and Restated Securities Purchase Agreement
with the Company dated as of June 30, 2006 and entered into a related
Registration Rights Agreement.
Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting
Persons entered into an agreement with respect to the joint filing of this
statement, and any amendment or amendments hereto, which is attached to the
Original Schedule 13D as Exhibit A and incorporated herein by reference.
Except as otherwise set forth herein, the Reporting Persons do not have any
contract, arrangement, understanding or relationship with any person with
respect to securities of the Company.
SCHEDULE 13D
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CUSIP NO. 15670X104 PAGE 9 OF 9 PAGES
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each
of the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: August 7, 2006
PRENTICE CAPITAL MANAGEMENT, LP
By: /s/ Michael Weiss
-----------------------
Name: Michael Weiss
Title: Chief Financial Officer
MICHAEL ZIMMERMAN
/s/ Michael Zimmerman
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Michael Zimmerman