SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
CLST Holdings, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
150925204
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(CUSIP Number)
RED OAK PARTNERS, LLC
Attention: David Sandberg
145 Fourth Avenue, Suite 15A
New York, NY 10003
Telephone: (212) 614-8952
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 27, 2009
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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 that 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 [X].
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 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 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.)
Page 1 of 11 pages
CUSIP No.: 150925204
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
David Sandberg
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 8 SHARED VOTING POWER - 4,561,554
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER - 4,561,554
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.19%**
14 TYPE OF REPORTING PERSON
IN
_________________________________
** Based on 20,553,205 shares of common stock of CLST Holdings, Inc.
outstanding at October 8, 2008, as reported in CLST Holdings, Inc.'s Quarterly
Report on Form 10-Q for the quarter ended August 31, 2008 filed with the
Securities and Exchange Commission on October 14, 2008.
Page 2 of 11 pages
CUSIP No.: 150925204
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Red Oak Partners, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER - 4,561,554
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER - 4,561,554
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,561,554
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.19%**
14 TYPE OF REPORTING PERSON
OO
Page 3 of 11 pages
CUSIP No.: 150925204
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
The Red Oak Fund, LP
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER - 3,341,106
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER - 3,341,106
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,341,106
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.26%**
14 TYPE OF REPORTING PERSON
PN
Page 4 of 11 pages
CUSIP No.: 150925204
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Pinnacle Partners, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
NUMBER OF 7 SOLE VOTING POWER 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER - 960,448
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER - 960,448
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
960,448
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.67%**
14 TYPE OF REPORTING PERSON
OO
Page 5 of 11 pages
CUSIP No.: 150925204
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Pinnacle Fund, LLLP
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
NUMBER OF 7 SOLE VOTING POWER 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER - 960,448
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER - 960,448
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
960,448
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.67%**
14 TYPE OF REPORTING PERSON
PN
Page 6 of 11 pages
CUSIP No.: 150925204
1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Bear Market Opportunity Fund, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER - 260,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER - 260,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
260,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.27%**
14 TYPE OF REPORTING PERSON
PN
Page 7 of 11 pages
ITEM 4. Purpose of Transaction.
Item 4 as previously filed is amended by adding the following
language:
On March 18, 2009, David Sandberg, Red Oak Fund, L.P. ("Red Oak Fund") and Red
Oak Partners LLC ("Red Oak Partners") sent a letter, attached as Exhibit A, to
CLST Holdings (the "Company") demanding, pursuant to 8 Del. Code ss. 220, to
inspect and copy certain documents and records of the Company. Specifically,
they requested to see all records pertaining to minutes and analysis for
stockholder nominations for the election of directors, classes of director and
their terms, and discussions by the company and Board regarding amending the
size of the Board from January 1, 2007 to present. The Reporting Persons
planned to use the above stated information in order to asses their rights
relative to Board representation, decide whether or not to nominate director/s
and facilitate discussions (under full compliance with applicable laws) with
other shareholders.
On March 19, 2009, Mr. Sandberg, Red Oak Fund and Red Oak Partners sent a
letter, attached as Exhibit B, to the Company stating that via Section 211 of
the Delaware Law, it intends to have the Company hold its 2008 annual meeting,
should the Company decide to hold its 2009 annual meeting without holding its
2008 meeting. At the next shareholders meeting, the Reporting Persons intend
to put forth several proposals including: a shareholder vote requesting the
Board to implement the 2007 plan of dissolution, a shareholder vote to express
disapproval of CLST Asset LLC's purchase of FCC Investment Trust I, a
shareholder vote to express disapproval of the 2008 Long Term Incentive Plan, a
shareholder vote to express disapproval of a purchase agreement effective
December 10, 2008 for CLST Asset Trust II, and a shareholder vote to express
disapproval of the February 13, 2009 transaction in which CLST Asset III, LLC
purchased assets, receivables and installment sales contracts from Fair Finance
Company, partly owned by Timothy Durham who is an officer and director of the
Company. Red Oak understands that such votes are in the nature of requests to
the board or advisory statements.
On March 19, 2009, Mr. Sandberg, Red Oak Fund and Red Oak Partners sent a
letter, attached as Exhibit C, to the Company stating that under Section 211 of
the Delaware Law, it intends to have the Company hold its 2008 annual meeting,
should the Company decide to hold its 2009 annual meeting without holding its
2008 meeting. In addition, the Reporting Persons plan to nominate two
directors for the Director class that expired in 2008 and two directors for the
Director class that expires in 2009.
On March 25, 2009, Jackson Walker L.L.P. ("Jackson Walker") representing the
Company, sent a letter, attached as Exhibit D, to Mr. Sandberg, Red Oak Fund
and its attorneys Paul, Hastings, Janofsky and Walker LLP ("Paul, Hastings").
The letter states that the Company will not comply with the Reporting Persons'
request for the inspection of books and records, as stated in the March 18
letter to the Company. Jackson Walker contends that the Reporting Persons did
not comply with requirements under 8 Del. Code ss. 220.
On March 27, 2009, Mr. Sandberg, Red Oak Fund and Red Oak Partners sent a
letter, attached as Exhibit E, to the Company. In the letter, the Reporting
Persons contend that they complied with requirements of 8 Del. Code ss. 220 in
the March 18, 2009 and March 19, 2009 correspondence. Furthermore, the
Reporting Persons requested that the Company explain why it believes the
Reporting Persons did not comply with 8 Del. Code ss. 220, as the Company
contends in their March 25, 2009 letter.
Page 8 of 11 pages
On April 1, 2009, Jackson Walker, representing the Company, sent a letter,
attached as Exhibit F, to Mr. Sandberg, Red Oak Fund and Red Oak Partners
stating that the Company refused to comply with the March 25 letter requesting
certain information from the Company. Jackson Walker stated that the Company
does not need to furnish the information as they feel the Reporting Persons
request does "not comply with the inspection requirements in Section 220."
On April 3, 2009, Paul, Hastings, on behalf of the Reporting Persons, sent a
letter, attached as Exhibit G, to Jackson Walker. Paul, Hastings' letter
addressed the previous letter Jackson Walker sent to the Reporting Persons
dated Apr. 1, 2009, which stated that the Company refused to give the Reporting
Persons certain information. The Apr. 3 letter from Paul, Hastings requested
that information relating to the reduction of the Company's Board of Directors
in 2007, the addition of a Board member in 2009, and process for nominating
Board members, be release to the Reporting Persons.
On April 6, 2009, Jackson Walker sent a letter, attached as Exhibit H, to Mr.
Sandberg, Red Oak Fund and Red Oak Partners stating that the Company's Board
rejected the Reporting Persons' nominations for Class I and Class II seats, as
the nominations were not in accordance with the Company's certificate of
incorporation. In addition, the Company also rejects the Reporting Persons'
proposals because "they are not proper in form or substance to come before an
annual meeting..." The letter goes on to say that the Company would be willing
to respect the nominations and limited proposals provided that the Reporting
Persons and the Company come to certain agreements, the Reporting Persons
provide certain disclosures about its acquisition of the Company's shares, and
the Reporting Persons not vote certain shares at the Annual Meeting. The
letter also states that the Board will delay the Annual Meeting, as currently
scheduled for May 22, 2009, until September 25, 2009, unless the Company and
Red Oak reach an agreement prior to April 12, 2009. The company has since that
time stated publicly that it will postpone its previously announced May, 2009
stockholder meeting unless it is able to reach an agreement with Red Oak by
April 12, which has not happened.
Red Oak currently intends to nominate and seek to elect persons it has selected
for all open seats on the company's board of directors, If there are only two
seats open, one in the class with a term scheduled to expire in 2008 and one in
the class with a term scheduled to expire in 2009, Red Oak intends to
nominate David Sandberg and Charles Bernard. If there are two positions open
in each class, Red Oak intends also to nominate Adrian Pertierra and Tobin
Walker. Red Oak also currently intends to consider steps to compel the company
to hold meetings to elect directors and nominating additional persons for
election to the director positions whose terms are set to expire in 2010. The
purpose of such nominations will be to elect directors who will actively
consider the stockholders' expressed desire to carry out the plan of
liquidation approved in 2007 and who Red Oak believes will not approve
transactions inconsistent with the planned liquidation or involving Mr.
Timothy Durham or companies he controls, who will not approve executive
Page 9 of 11 pages
compensation plans or further grants of options or restricted shares, and who
will, in Red Oak's opinion, be more closely aligned with stockholder interests.
ITEM 7. Material to be Filed as Exhibits.
Item 7 is hereby amended to add the following exhibits:
Exhibit A: Letter to CLST Holdings, Inc. from the Reporting Persons
Exhibit B: Letter to CLST Holdings, Inc. from the Reporting Persons
Exhibit C: Letter to CLST Holdings, Inc. from the Reporting Persons
Exhibit D: Letter to the Reporting Persons from Jackson Walker L.L.P.
Exhibit E: Letter to CLST Holdings, Inc. from the Reporting Persons
Exhibit F: Letter to the Reporting Persons from Jackson Walker L.L.P.
Exhibit G: Letter to Jackson Walker L.L.P. from Paul, Hastings,
Janofsky & Walker LLP
Exhibit H: Letter to the Reporting Persons from Jackson Walker L.L.P.
Page 10 of 11 pages
SIGNATURES
After reasonable inquiry and to best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 27, 2009
/s/ David Sandberg
-------------------------
David Sandberg
Red Oak Partners LLC
By: /s/ David Sandberg
-------------------------------
David Sandberg, Managing Member
Pinnacle Partners, LLP
By: Red Oak Partners LLC, its general partner
By: /s/ David Sandberg
-------------------------------
David Sandberg, Managing Member
The Red Oak Fund, L.P.
By: Red Oak Partners LLC, its general partner
By: /s/ David Sandberg
-------------------------------
David Sandberg, Managing Member
Pinnacle Fund, LLLP
By: Pinnacle Partners, LLC, its general partner
By: Red Oak Partners LLC, its general partner
By: /s/ David Sandberg
-------------------------------
David Sandberg, Managing Member
Bear Market Opportunity Fund, L.P.
By: Red Oak Partners, LLC, its investment advisor
By: /s/ David Sandberg
-------------------------------
David Sandberg, Managing Member
Page 11 of 11 pages