UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 26, 2015

 

deltathree, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

000-28063  13-4006766
(Commission File Number)  (IRS Employer Identification No.)

 

1 Bridge Plaza, Fort Lee, New Jersey  07024
(Address of principal executive offices)  (Zip Code)

 

Registrant’s telephone number, including area code: (212) 500-4850

 

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 8.01 Other Events.

 

On February 25, 2015, D4 Holdings, LLC ("D4 Holdings"), the holder of approximately 54.0% of the issued and outstanding shares of the common stock, par value $0.001 per share (the "Common Stock"), of deltathree, Inc. (the "Company') sent a letter to the Company's board of directors that indicated that within three to four weeks of the date of the letter D4 Holdings intended to initiate a tender offer to purchase all of the outstanding shares of the Common Stock not owned by D4 Holdings at a purchase price of $0.01 per share in cash. D4 Holdings stated that it is not willing to enter into further forbearance arrangements with the Company or to provide the Company additional financing. Finally, D4 Holdings indicated that, in its capacity as majority stockholder of the Company, it is presently not interested in either selling its shares or voting in favor of any alternative transaction, including a merger or sale of the Company's assets or business or similar transaction.

 

On March 26, 2015 D4 Holdings sent a letter (the "Revised Offer Letter") to the Company's board of directors that indicated that D4 Holdings withdraws its previous offer and instead proposes to acquire the Company through a merger of the Company with a newly-formed acquisition subsidiary of D4 Holdings. The transaction will be structured as a stock purchase, pursuant to which D4 Holdings will purchase all of the outstanding shares of the Common Stock not owned by D4 Holdings. D4 Holdings restated its previous offer of $0.01 per share, to be paid in cash from its own funds, and accordingly there will be no financing contingency. In addition, D4 Holdings will assume all of the Company's outstanding debt, currently valued at approximately $7.9 million.

 

The completion of the transaction will be conditioned upon, among other things, approval by a special committee of the Company's board of directors consisting of independent directors. If the transaction is completed, the Common Stock will no longer be registered under Section 12 of the Exchange Act.

 

The foregoing description of some of the material terms of the merger is not meant to be a complete summary and is qualified in its entirety by the full text of the Revised Offer Letter filed as Exhibit 99.1 to this Report and incorporated herein by reference.

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No. Description
   
99.1 Letter from D4 Holdings, LLC to the Board of Directors of the Company dated March 26, 2015.

 

 
 

 


SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  DELTATHREE, INC.
   
  By: /s/ Effi Baruch
  Name: Effi Baruch
 

Title:

 

 Chief Executive Officer, President, Senior Vice
President of Operations and Technology and Secretary

 

Dated: March 31, 2015

 

 

 

 

 



 

Exhibit 99.1

 

D4 HOLDINGS, LLC

349-L Copperfield Blvd., #407, Concord, North Carolina 28025

 

March 26, 2015

 

Board of Directors

deltathree, Inc.

1 Bridge Plaza, Suite 275

Fort Lee, New Jersey 07024

 

Re: Proposed Acquisition of deltathree, Inc. (the “Company”)

 

Gentlemen:

 

By this letter, I inform you that D4 Holdings, LLC (“D4”) withdraws its previous offer, communicated to you by letter dated 25 February 2015, to acquire the outstanding minority shares of the Company through the initiation of a tender offer. Instead, D4 proposes to acquire the Company through a merger of the Company with a newly-formed acquisition subsidiary of D4 (“NewCo”).

 

Transaction Structure: We currently intend for the transaction to be structured as an stock purchase pursuant to which the Company would merge with NewCo and which would result in the purchase of the remaining interests in the Company that are not already owned by D4 (the “Transaction”). The specific structure of the Transaction will be determined by the definitive agreement between the parties.

 

Price: D4 restates its previous offer of $0.01 per share of the Company’s outstanding and issued common stock held by minority shareholders (the “Offer Price”). The purchase price will be paid in cash to holders of the Company’s outstanding and issued common stock (other than D4) following the consummation of the Transaction.

 

We believe that the proposed price correctly reflects the market value of the Company and is in the best interests of the Company and the minority shareholders. As you know, the Company has been unable to be successful and grow as an independent entity. It has engaged third party advisors to find a buyer that could maximize its value for its shareholders and creditors, but unfortunately the process has not been successful. The Offer Price, combined with the assumption of the Company’s current debt, values the Transaction at approximately USD 9 million. This is more than eight times any other offer of which we are aware, and it would allow the Company to satisfy its debt obligations and provide a fair return to shareholders.

 

Given the inability of your independent advisors to procure an offer that is substantially close to the enterprise value provided by this Transaction, the light trading of your stock that does not reflect the Company’s true equity value, and the balance sheet restructuring that the Transaction would provide, we believe that this Transaction is the best valuation the Company can expect to receive. In short, this Transaction is, in our view, the last and best opportunity for the Company to provide a return to shareholders and fulfill its obligations to the holders of its debt.

 

 
 

  

Board of Directors

deltathree, Inc.

March 26, 2015

Page 2

 

Definitive Agreements. The Transaction will be subject to, and conditioned upon, among other things (i) the negotiation, execution and delivery of legal documentation satisfactory to the parties, which will include a definitive merger agreement between NewCo and deltathree providing for, among other things, customary representations and warranties, covenants, closing deliveries, closing conditions, indemnification and such other agreements and instruments of transfer as mutually agreed upon by the parties; (ii) required approvals from the Boards of the Company and D4; and (iii) completion of all required filings with, and approvals from, the Securities and Exchange Commission.

 

We understand that the Company has formed a special committee to evaluate strategic options for the Company, including the evaluation of D4’s Proposal Letter dated 25 February 2015. Given that the special committee has already commenced its work, we request that the special committee proceed expeditiously to review and accept D4's proposal.

 

Please be aware that this proposal is an expression of interest only, and we reserve the right to withdraw or modify our proposal in any manner.

 

We look forward to hearing from you promptly regarding this letter

 

  D4 HOLDINGS, LLC  
     
  By: PRAESCIENT, LLC, its Manager  
         
    By: /s/ Robert Stevanovski  
      Name: Robert Stevanovski  
      Title: Authorized Signatory