Sec Form 13D Filing - Horton Capital Management LLC filing for CynergisTek, Inc. (CTEK) - 2020-08-19

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(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)

(Amendment No. 2)¹

Cynergistek, Inc.

(Name of Issuer)

Common Stock, $0.001 par value

(Title of Class of Securities)

23258P105

(CUSIP Number)

JOSEPH M. MANKO, JR.

HORTON CAPITAL PARTNERS, LLC

1717 Arch Street, Suite 3920

Philadelphia, PA 19103

(215) 399-5402

ANDREW FREEDMAN, ESQ.

MEAGAN REDA, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

August 18, 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.

1              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).

*Includes 454,148 Shares underlying the Initial Warrant (as defined and described in Item 3) that is currently exercisable, subject to the 9.99% Beneficial Ownership Limitation (as defined and described in Item 3) and excludes 45,852 Shares underlying the Initial Warrant, which may not be exercised due to the 9.99% Beneficial Ownership Limitation.

*Includes 454,148 Shares underlying the Initial Warrant that is currently exercisable, subject to the 9.99% Beneficial Ownership Limitation, and excludes 45,852 Shares underlying the Initial Warrant, which may not be exercised due to the 9.99% Beneficial Ownership Limitation.

*Includes 454,148 Shares underlying the Initial Warrant that is currently exercisable, subject to the 9.99% Beneficial Ownership Limitation, and excludes 45,852 Shares underlying the Initial Warrant, which may not be exercised due to the 9.99% Beneficial Ownership Limitation.

* Includes 454,148 Shares underlying the Initial Warrant that is currently exercisable, subject to the 9.99% Beneficial Ownership Limitation and excludes 45,852 Shares underlying the Initial Warrant, which may not be exercised due to the 9.99% Beneficial Ownership Limitation.

The following constitutes Amendment No. 2 to the Schedule 13D filed by the undersigned (“Amendment No. 2”). This Amendment No. 2 amends the Schedule 13D as specifically set forth herein.

Item 2 is hereby amended and restated to read as follows:

(a)       This statement is filed by:

Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement, as described in Item 6 of the Schedule 13D.

(b)       The address of the principal office of each of the Reporting Persons is 1717 Arch Street, Suite 3920, Philadelphia, PA 19103.

(c)       The principal business of HCPF is purchasing, holding and selling securities for investment purposes. The principal business of HCP is serving as the general partner of HCPF. The principal business of HCM is serving as the investment manager of HCPF. The principal occupation of Mr. Manko is serving as the managing member of HCP and HCM.

(d)       No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)       No Reporting Person has, during the last five years, been 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.

(f)       Mr. Manko is a citizen of the United States of America.

Item 3 is hereby amended and restated to read as follows:

The Shares purchased by HCPF were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted.

The aggregate purchase price of the 650,416 Shares directly owned by HCPF is approximately $2,206,597, including brokerage commissions, 55,824 Shares of which were purchased by HCPF pursuant to the February 7 Letter Agreement (as defined in the Schedule 13D).

On April 3, 2020, HCM entered into the Securities Purchase Agreem ent (as defined and described in Item 4 of Amendment No. 1 to the Schedule 13D) with the Issuer. In consideration for its obligations under the Securities Purchase Agreement, HCM received a warrant (the “Initial Warrant”), with a 10-year term, to purchase up to 500,000 Shares (the “Warrant Shares”), for an exercise price of $2.50 per share, subject to certain anti-dilution adjustments and limitations, as set forth in the Initial Warrant, including a conversion cap which precludes the Holder (as defined in the Securities Purchase Agreement) from exercising all or a portion of the Initial Warrant if, after such exercise, such Holder would beneficially own, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, more than 9.99% of the Shares outstanding immediately after giving effect to such exercise (the “9.99% Beneficial Ownership Limitation”). On April 7, 2020, HCM transferred the Initial Warrant to HCPF.

Item 4 is hereby amended to add the following:

On August 18, 2020, the client of the Horton Managed Account terminated that certain investment advisory agreement with HCM. As a result, HCM no longer retains voting or dispositive power with respect to the 303,872 Shares held in the Horton Managed Account (the “Managed Account Termination”), representing 100% of the client’s interest in the Issuer.

Items 5(a) – (c) are hereby amended and restated to read as follows:

The aggregate percentage of Shares reported owned by each person named herein is based upon a denominator that is the sum of: (i) 10,597,024 Shares outstanding, as of August 12, 2020, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 13, 2020, and (ii) certain of the 500,000 Shares underlying the Initial Warrant. As of the close of business on August 19, 2020, the 9.99% Beneficial Ownership Limitation limits the exercise of the Initial Warrant to 454,148 of the 500,000 Shares underlying the Initial Warrant.

Percentage: Approximately 9.99%

Percentage: Approximately 9.99%

Percentage: Approximately 9.99%

Percentage: Approximately 9.99%

The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, the beneficial owners of any securities of the Issuer that he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that he or it does not directly own.

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.