BOS BETTER ONLINE SOLUTIONS LTD — Major Shareholding Notification 2010

Oct 14, 2010

SC 13D 1 a10-19387_1sc13d.htm SC 13D

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D

*INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO § 240.13d-2(a)*

*B.O.S. BETTER ONLINE SOLUTIONS LTD.*

(Name of Issuer)

*Ordinary Shares, Par Value NIS 4.00 per share*

(Title of Class of Securities)

*M20115131*

(CUSIP Number)

*Clarence V. Wesley*

*and Luis Gutierrez Roy*

*Telegraph Hill Capital Fund I, LLC*

*582 Market Street, Suite 700*

*San Francisco, California 94104*

*Tel: (415) 601-7775*

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

*October 4, 2010*

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13D 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 o .

*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.

• 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).

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CUSIP No. M20115131 — 1.	Name of Reporting Persons Telegraph Hill Capital Fund I, LLC
2.	Check the Appropriate Box
if a Member of a Group (See Instructions)
	(a)	o
	(b)	o
3.	SEC Use Only
4.	Source of Funds (See
Instructions) OO
5.	Check if Disclosure of Legal Proceedings Is
Required Pursuant to Items 2(d) or 2(e): o
6.	Citizenship or Place of Organization: Delaware
Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power 0
	8.	Shared Voting Power 233,840*
	9.	Sole Dispositive Power 0
	10.	Shared Dispositive Power 233,840*
11.	Aggregate Amount
Beneficially Owned by Each Reporting Person 233,840*
12.	Check if the Aggregate
Amount in Row (11) Excludes Certain Shares (See Instructions) o
13.	Percent of Class
Represented by Amount in Row (11) 8.1% of Ordinary Shares
14.	Type of Reporting Person
(See Instructions) OO

*Consists of (i) 96,362 Ordinary Shares, (ii) 61,539 Conversion Shares, (iii) 61,539 Warrant Shares and (iv) 14,400 Option Shares. See Items 3 and 4.

2

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CUSIP No. M20115131 — 1.	Name of Reporting Persons Telegraph Hill Capital, LLC
2.	Check the Appropriate Box
if a Member of a Group (See Instructions)
	(a)	o
	(b)	o
3.	SEC Use Only
4.	Source of Funds (See
Instructions) OO
5.	Check if Disclosure of Legal Proceedings Is
Required Pursuant to Items 2(d) or 2(e): o
6.	Citizenship or Place of Organization: Delaware
Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power 0
	8.	Shared Voting Power 233,840* **
	9.	Sole Dispositive Power 0
	10.	Shared Dispositive Power 233,840* **
11.	Aggregate Amount
Beneficially Owned by Each Reporting Person 233,840*
12.	Check if the Aggregate
Amount in Row (11) Excludes Certain Shares (See Instructions) o
13.	Percent of Class
Represented by Amount in Row (11) 8.1% of Ordinary Shares
14.	Type of Reporting Person
(See Instructions) OO

*Consists of (i) 96,362 Ordinary Shares, (ii) 61,539 Conversion Shares, (iii) 61,539 Warrant Shares and (iv) 14,400 Option Shares. See Items 3 and 4.

**Pursuant to Rule 13d-4, this Reporting Person disclaims beneficial ownership of the securities reflected herein except to the extent of the Reporting Person’s pecuniary interest therein and declares that this Schedule 13D shall not be construed as an admission that such Reporting Person is the beneficial owner of any securities covered hereby.

3

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CUSIP No. M20115131 — 1.	Name of Reporting Persons Telegraph Hill Group, LLC
2.	Check the Appropriate Box
if a Member of a Group (See Instructions)
	(a)	o
	(b)	o
3.	SEC Use Only
4.	Source of Funds (See
Instructions) OO
5.	Check if Disclosure of Legal Proceedings Is
Required Pursuant to Items 2(d) or 2(e): o
6.	Citizenship or Place of Organization: Delaware
Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power 0
	8.	Shared Voting Power 233,840* **
	9.	Sole Dispositive Power 0
	10.	Shared Dispositive Power 233,840* **
11.	Aggregate Amount
Beneficially Owned by Each Reporting Person 233,840*
12.	Check if the Aggregate
Amount in Row (11) Excludes Certain Shares (See Instructions) o
13.	Percent of Class
Represented by Amount in Row (11) 8.1% of Ordinary Shares
14.	Type of Reporting Person
(See Instructions) OO

*Consists of (i) 96,362 Ordinary Shares, (ii) 61,539 Conversion Shares, (iii) 61,539 Warrant Shares and (iv) 14,400 Option Shares. See Items 3 and 4.

**Pursuant to Rule 13d-4, this Reporting Person disclaims beneficial ownership of the securities reflected herein except to the extent of the Reporting Person’s pecuniary interest therein and declares that this Schedule 13D shall not be construed as an admission that such Reporting Person is the beneficial owner of any securities covered hereby.

4

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CUSIP No. M20115131 — 1.	Name of Reporting Persons Clarence V. Wesley
2.	Check the Appropriate Box
if a Member of a Group (See Instructions)
	(a)	o
	(b)	o
3.	SEC Use Only
4.	Source of Funds (See
Instructions) OO
5.	Check if Disclosure of Legal Proceedings Is
Required Pursuant to Items 2(d) or 2(e): o
6.	Citizenship or Place of Organization: United States
Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power 0
	8.	Shared Voting Power 233,840* **
	9.	Sole Dispositive Power 0
	10.	Shared Dispositive Power 233,840* **
11.	Aggregate Amount
Beneficially Owned by Each Reporting Person 233,840*
12.	Check if the Aggregate
Amount in Row (11) Excludes Certain Shares (See Instructions) o
13.	Percent of Class
Represented by Amount in Row (11) 8.1% of Ordinary Shares
14.	Type of Reporting Person
(See Instructions) IN

*Consists of (i) 96,362 Ordinary Shares, (ii) 61,539 Conversion Shares, (iii) 61,539 Warrant Shares and (iv) 14,400 Option Shares. See Items 3 and 4.

**Pursuant to Rule 13d-4, this Reporting Person disclaims beneficial ownership of the securities reflected herein except to the extent of the Reporting Person’s pecuniary interest therein and declares that this Schedule 13D shall not be construed as an admission that such Reporting Person is the beneficial owner of any securities covered hereby.

5

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CUSIP No. M20115131 — 1.	Name of Reporting Persons Luis Gutierrez Roy
2.	Check the Appropriate Box
if a Member of a Group (See Instructions)
	(a)	o
	(b)	o
3.	SEC Use Only
4.	Source of Funds (See
Instructions) OO
5.	Check if Disclosure of Legal Proceedings Is
Required Pursuant to Items 2(d) or 2(e): o
6.	Citizenship or Place of Organization: Spain
Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power 0
	8.	Shared Voting Power 233,840* **
	9.	Sole Dispositive Power 0
	10.	Shared Dispositive Power 233,840* **
11.	Aggregate Amount
Beneficially Owned by Each Reporting Person 233,840*
12.	Check if the Aggregate
Amount in Row (11) Excludes Certain Shares (See Instructions) o
13.	Percent of Class
Represented by Amount in Row (11) 8.1% of Ordinary Shares
14.	Type of Reporting Person
(See Instructions) IN

*Consists of (i) 96,362 Ordinary Shares, (ii) 61,539 Conversion Shares, (iii) 61,539 Warrant Shares and (iv) 14,400 Option Shares. See Items 3 and 4.

**Pursuant to Rule 13d-4, this Reporting Person disclaims beneficial ownership of the securities reflected herein except to the extent of the Reporting Person’s pecuniary interest therein and declares that this Schedule 13D shall not be construed as an admission that such Reporting Person is the beneficial owner of any securities covered hereby.

6

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*Schedule 13D*

Item 1.	Security and Issuer
This
Schedule 13D relates to ordinary shares, par value 4.00 NIS (New Israeli
Shekels) (the “ Ordinary Shares ”),
of B.O.S. Better Online Solutions Ltd., an Israeli corporation (the “ Company ”). The
address of the Company’s principal executive offices is 20 Freiman St.,
Rishon Lezion, 75101, Isreal.
Item 2.	Identity and Background
(a) This Schedule
13D is being filed by Telegraph Hill Capital Fund I, LLC, a Delaware limited
liability company (“ THCapFund I LLC ”),
Telegraph Hill Capital, LLC, a Delaware limited liability company (“ THCap LLC ”), Telegraph Hill Group, LLC, a Delaware limited
liability company (“ THG LLC ”),
Clarence V. Wesley and Luis Gutierrez Roy (the foregoing entities and persons
collectively, the “ Reporting Persons ”)
pursuant to their agreement to the joint filing of this Schedule 13D, filed
herewith as Exhibit 4 (the “ Joint Filing Agreement ”). The principal business of
THCapFund I LLC is to make venture capital and private equity investments
primarily in the mobile, wireless, and media space. THCap LLC serves as managing member to
THCapFund I LLC and THG LLC is the manager of THCap LLC. Messrs. Wesley
and Roy are managing directors of THG LLC and THCap LLC, and may be deemed to
have shared voting and dispositive power with respect to the Ordinary Shares
beneficially owned by THCapFund I LLC. Pursuant
to Rule 13d-4, each of the Reporting Persons, other than THCapFund I
LLC, expressly disclaim beneficial ownership of the securities reflected
herein except to the extent of such Reporting Person’s pecuniary interest
therein and declares that this Schedule 13D shall not be construed as an
admission that such Reporting Person is the beneficial owner of any
securities covered hereby. (b) The business
address of each of the Reporting Persons is 582 Market Street, Suite 700,
San Francisco, California 94104. (c) Mr. Wesley
is a managing director of THG LLC and THCap LLC. Mr. Roy is a managing director of THG
LLC and THCap LLC and a director of the Company. (d) None of the
Reporting Persons has been convicted in a criminal proceeding during the last
five year period prior to the date hereof. (e) None of the
Reporting Persons has been party to any 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 during the last five year period prior to the date hereof. (f) Each of the
Reporting Persons, other than Messrs. Wesley and Roy, is organized under
the laws of Delaware. Mr. Wesley
is a citizen of the United States and Mr. Roy is a citizen of Spain.
Item 3.	Source and Amount of Funds or Other Consideration
THCapFund
I LLC purchased the 96,362 Ordinary Shares pursuant to a share purchase
agreement entered into by THCapFund I LLC and the Company on October 4,
2010 (the “ Purchase Agreement ”). The aggregate purchase price for the
Ordinary Shares was $300,000, of which the funding for the purchase was
obtained by THCapFund I LLC from the contributed capital of its members.

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| THCapFund
I LLC purchased secured notes that are convertible into 61,539 Ordinary Shares
(the “ Conversion Shares ”) pursuant to a
loan agreement entered into by THCapFund I LLC and the Company in June 2009
(the “ Loan Agreement ”). In connection with the Loan Agreement, the
Company also granted THCapFund I LLC warrants (the “ Warrants ”)
to purchase 61,539 Ordinary Shares (the “ Warrant Shares ”). The aggregate purchase price for the
Conversion Shares and Warrant Shares was $200,000, of which the funding for
the purchase was obtained by THCapFund I LLC from the contributed capital of
its members. On
September 1, 2009, THG LLC entered into a consulting agreement with the
Company (as amended, the “ Consulting Agreement ”),
pursuant to which the Company provided THCapFund I LLC options (the “ Options ”) to purchase 14,400 Ordinary Shares (the “ Option Shares ”). | |
| --- | --- |
| Item 4. | Purpose of Transaction |
| THCapFund
I LLC and the other Reporting Persons acquired the Ordinary Shares,
Conversion Shares, Warrant Shares and Option Shares for investment purposes. Pursuant
to the Purchase Agreement, effective October 4, 2010, the Company has
appointed Mr. Roy to the Board of Directors of the Company (the “ Board ”), to serve until the next annual general meeting of
the shareholders. The Company will
further nominate Mr. Roy as a candidate for election to the Board at the
next annual general meeting of the shareholders. In
June 2009, THCapFund I LLC purchased the Conversion Shares, which,
pursuant to the Loan Agreement, are convertible at any time prior to July 2012
at the sole option of THCapFund I LLC into 61,539 Ordinary Shares. As of the same date, the Company also
issued THCapFund I LLC 61,539 Warrant Shares, which shall be exercisable for
a period of 18 months commencing in January 2011. The Warrant Shares are exercisable, in
whole or in part, at a price per Ordinary Share of $2.75. Beginning
September 1, 2009, THG LLC provides certain consulting services to the
Company related to the identification of potential investors, financing and
partners for the Company, each as set forth in greater detail in the
Consulting Agreement. In exchange, the
Company agreed to pay THG LLC 5% of certain amounts actually received by the
Company from those parties identified by THG LLC and issued THCapFund I LLC
14,400 Option Shares, which vest and become exercisable upon the lapse of 18
months from September 1, 2009.
Each Option is exercisable at a price per Ordinary Share of $2.75 and
shall expire and shall no longer be exercisable upon the lapse of 18 months
after the date of vesting. The summary of the Purchase Agreement, the Loan Agreement and the
Warrants contained in this Schedule 13D does not purport to be complete and
is qualified in its entirety by reference to such agreements filed herewith as
Exhibits 1-3 and incorporated herein by reference. Except
as disclosed in Items 2, 6 and this Item 4, none of the Reporting Persons has
any current plans or proposals which relate to or would result in any of the
events described in clauses (a) through (j) of the instructions to
Item 4 of Schedule 13D. The Reporting Persons, however, will take such
actions with respect to the Reporting Persons’ investments in the Company as
deemed appropriate in light of existing circumstances from time to time and
reserve the right to acquire or dispose of securities of the Company, to
enter into hedging relationships with respect to such securities, or to
formulate other purposes, plans or proposals in the future depending on
market conditions and/or other factors. | |
| Item 5. | Interest in Securities of the Issuer |
| (a) and
(b) According
to information provided by the Company to the Reporting Persons, there were
2,653,454 Ordinary Shares issued and
outstanding as of October 4, 2010. | |

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| With respect to the amount
of Ordinary Shares beneficially owned by each Reporting Person, the nature of
such beneficial ownership and the related percentages of the class of
Ordinary Shares, the information contained in each of the cover pages, and in
Items 1 through 14 thereon, is incorporated by reference herein. The aggregate number and
percentage of the class of securities identified pursuant to Item 1 of this
Schedule 13D that are beneficially owned by the Reporting Persons listed in Item
2 are as follows: THCapFund I LLC may be
deemed to have beneficial ownership of 233,840 Ordinary Shares, representing
approximately 8.1% of the issued and outstanding Ordinary Shares as of
October 4, 2010. All such shares are directly held and directly
beneficially owned by THCapFund I LLC. THCap LLC may be deemed to
have beneficial ownership of 233,840 Ordinary Shares, representing
approximately 8.1% of the issued and outstanding Ordinary Shares as of
October 4, 2010, as the managing member of THCapFund I LLC. THG LLC may be deemed to
have beneficial ownership of 233,840 Ordinary Shares, representing
approximately 8.1% of the issued and outstanding Ordinary Shares as of
October 4, 2010, as the manager of THCap LLC. Messrs. Wesley and
Roy each may be deemed to have a beneficial ownership of 233,840 Ordinary
Shares, representing approximately 8.1% of the issued and outstanding
Ordinary Shares as of October 4, 2010, as the managing directors of
THCap LLC and THG LLC. Each of the Reporting
Persons, other than THCapFund I LLC, expressly disclaim beneficial ownership
of the shares of capital stock of the Company owned by all other Reporting
Persons. (c) Other than
the shares reported herein, none of the Reporting Persons has effected any
transactions involving the Ordinary Shares in the 60 days prior to filing
this Schedule 13D. (d) THG LLC is
the sole manager of THCap LLC, which is the sole managing member of THCapFund
I LLC. Messrs. Wesley and Roy are
the managing directors of THG LLC and therefore have the power to direct its
affairs, including decisions respecting the disposition of proceeds from the
sale of the shares of the Company’s Ordinary Shares held by THCapFund I
LLC. Under certain circumstances set
forth in the operating agreement of THCapFund I LLC, the members of such
limited liability company have the right to receive distributions, either
cash or in-kind, with respect to the shares of the Company’s Ordinary Shares
held by THCapFund I LLC. To the knowledge
of the Reporting Persons, no other person has the right to receive or the
power to direct the receipt of distributions with respect to the securities
of the Company. (e) Not
applicable. | |
| --- | --- |
| Item 6. | Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer |
| Except
as described above, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) among the Reporting Persons and any other
person with respect to any securities of the Company, including but not
limited to transfer or voting of any of the securities, finders fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies. | |

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Item 7.
Exhibit 1	Share
Purchase Agreement, made and entered into as of October 4, 2010, by and
between the Company and THCapFund I LLC.
Exhibit 2	Form of
Loan Agreement by and among the Company and certain lenders (incorporated by
reference to the Company’s Annual Report on Form 20-F filed on
June 30, 2010).
Exhibit 3	Form of
Warrant issued by the Company to certain lenders (incorporated by reference
to the Company’s Annual Report on Form 20-F filed on June 30, 2010).
Exhibit 4	Joint
Filing Agreement, dated October 14, 2010.

10

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*Signature*

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

| Dated
October 14, 2010 | |
| --- | --- |
| Telegraph
Hill Capital Fund I, LLC | |
| By:
Telegraph Hill Capital, LLC | |
| Its
Managing Member | |
| By:
Telegraph Hill Group, LLC | |
| Its
Manager | |
| By: | /s/
Luis Gutierrez Roy |
| | Luis
Gutierrez Roy, Managing Director |
| Telegraph
Hill Capital, LLC | |
| By:
Telegraph Hill Group, LLC | |
| Its
Manager | |
| By: | /s/
Luis Gutierrez Roy |
| | Luis
Gutierrez Roy, Managing Director |
| Telegraph
Hill Group, LLC | |
| By: | /s/
Luis Gutierrez Roy |
| | Luis
Gutierrez Roy, Managing Director |
| /s/ Clarence V. Wesley | |
| Clarence V. Wesley | |
| /s/
Luis Gutierrez Roy | |
| Luis
Gutierrez Roy | |

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*Exhibit Index*

| Exhibit 1 | Share
Purchase Agreement, made and entered into as of October 4, 2010, by and
between the Company and THCapFund I LLC. |
| --- | --- |
| Exhibit 2 | Form of
Loan Agreement by and among the Company and certain lenders (incorporated by
reference to the Company’s Annual Report on Form 20-F filed on June 30,
2010). |
| Exhibit 3 | Form of
Warrant issued by the Company to certain lenders (incorporated by reference
to the Company’s Annual Report on Form 20-F filed on June 30,
2010). |
| Exhibit 4 | Joint
Filing Agreement, dated October 14, 2010. |

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