Attached files
| file | filename |
|---|---|
| EX-99.1 - DJSP Enterprises, Inc. | v208225_ex99-1.htm |
| EX-99.3 - DJSP Enterprises, Inc. | v208225_ex99-3.htm |
| EX-99.2 - DJSP Enterprises, Inc. | v208225_ex99-2.htm |
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) January 6,
2011
DJSP ENTERPRISES,
INC.
(Exact Name of Registrant as Specified
in Its Charter)
|
British Virgin
Islands
|
001-34149
|
98-0667099
|
||
|
(State or other
jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS Employer
Identification
No.)
|
|
900 South Pine Island
Road, Suite 400
Plantation, Florida
|
33324
|
|
|
(Address of Principal Executive
Offices)
|
(Zip
Code)
|
(954) 233-8000
(Registrant’s Telephone Number,
Including Area Code)
(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))
|
Item
2.04. Triggering Events
That Accelerate or Increase a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement.
DAL Group, LLC (“DAL”), a subsidiary of
DJSP Enterprises, Inc. (the “Company”), has obtained waivers from the
Law Offices of David J.
Stern, P.A., Chardan Capital, LLC, Chardan Capital Markets, LLC, and
Kerry S.
Propper, of payments due
through April 1, 2011, on a $47,869,000 note, a $1,000,000 note, a $250,000 note, and a $1,500,000 note held by such parties,
respectively. The waivers were sought by DAL as it develops and
implements plans to
restructure its ongoing operations to reflect its significantly reduced revenues
and operations and the other changes described in its prospectus supplement, dated
December 13, 2010, to the Company’s prospectus dated June 25,
2010. The waivers are attached to this Form 8-K as Exhibits 99.1
through 99.3.
In connection with its January 15, 2010 transaction
with the
Company, DAL executed a series of unsecured Term Notes (the “Unsecured
Notes”) in the aggregate
principal amount of $1,600,000, deferring certain costs related to the Company’s
initial public offering due to various advisors to the Company. Pursuant to each of the
Unsecured Notes, interest in the amount of 5.0% per annum is payable quarterly,
in arrears, on the first business day of January, April, June and September of
each year. DAL did not make the interest payment on the Unsecured
Notes due January 3, 2011. As a result, the principal balances of the
Unsecured Notes were automatically accelerated without notice from the holders
of the Unsecured Notes.
DAL also has a $500,000 Term Note
outstanding with Cornix Management, LLC (“Cornix”) that bears interest in the
amount of 15.0% per annum, payable monthly, and matures on January 15, 2011 (the
“Cornix Note”). Cornix had previously deferred interest payments on
the Cornix Note through January 1, 2011. Pursuant to the terms of a
General Subordination Agreement covering the line of credit obligations (the
“Line of Credit”) owed to BA Note Acquisition, LLC (“BNA”), DAL is not permitted
to make interest or principal payments under the Cornix Note so long as the Line
of Credit remains in default. DAL failed to make an interest payment
to Cornix on January 3, 2011, and is thus in default under the Cornix Note, but
has not received a notice from Cornix accelerating the amounts due
thereunder.
DAL is seeking waivers from the holders
of the Unsecured Notes and Cornix of principal and interest payments otherwise
due under these notes, and the default interest rates under these notes, through
April 1, 2011.
As previously disclosed, DAL has entered
into a Forbearance Agreement with BNA, pursuant to which BNA has agreed to
forbear from taking action on the Line of Credit until March 9,
2011. The outstanding principal balance of the Line of Credit at
January 14, 2011 was $5,496,863.28.
Pursuant to the Contribution and Membership Interest
Purchase Agreement (the “Contribution Agreement”), DAL is obligated to pay a Finance Charge
of 5% per annum, payable on the first business day of January, April, June and
September of each year, on the FlatWorld Additional Warrant Proceeds in the
amounts of $600,000 payable to Nagina Partners LLC
(“Nagina”) and $400,000 payable to Jeffrey A. Valenty
(“Valenty”). DAL did not make the payments due on January 3, 2011,
which results in an increased Finance Charge rate to 8.0%. DAL is seeking waivers from Nagina and
Valenty of the payment of the Finance Charge and increased rate through April 1,
2011.
There can be no assurance that DAL will
be able to obtain waivers
from the holders of the Unsecured Notes, Cornix, Nagina or
Valenty. If DAL is unable to develop ongoing operating plans
acceptable to its debt
holders or successfully
develop and implement those plans in a timely manner, it will not be able to
continue its business operations.
Item
8.01. Other
Events.
Valenty and Nagina have informed the
Company that they intend to exchange their Common Units of DAL for an aggregate
of 722,668 and 1,084,000 ordinary shares of the Company’s common
stock (the “Shares”), respectively, on January 18, 2011. The exchange
will be made in accordance with the terms of the First Amended and Restated
Limited Liability Company Agreement of DAL dated as of January 15, 2010, as
amended. The Shares were previously registered under the Securities Act of
1933, as amended,
pursuant to the Company’s
Registration Statement on Form F-1, effective June 25, 2010.
Item
9.01. Financial Statements
and Exhibits
(d) Exhibits.
|
Exhibit No.
|
Descriptions
|
||
|
99.1
|
Interest Deferral Agreement and
Limited Waiver of Law Offices of David J. Stern,
P.A.
|
||
|
99.2
|
|
Interest Deferral Agreement and
Limited Waiver of Chardan Capital, LLC and Kerry S.
Propper.
|
|
|
99.3
|
Interest Deferral Agreement and
Limited Waiver of Chardan Capital Markets, LLC.
|
||
SIGNATURES
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.
|
DJSP Enterprises, Inc.
|
|||
|
(Registrant)
|
|||
|
Date January 14,
2011
|
By
|
/s/ Stephen J.
Bernstein
|
|
|
Stephen J. Bernstein,
President and Chief Executive Officer
|
|||