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):
| o | Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
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 |
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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.
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DELTATHREE, INC. |
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By: |
/s/ Effi Baruch |
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Name: |
Effi Baruch |
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Title:
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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
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D4 HOLDINGS, LLC |
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By: |
PRAESCIENT, LLC, its Manager |
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By: |
/s/ Robert Stevanovski |
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Name: Robert Stevanovski |
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Title: Authorized Signatory |