Attached files
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: March 5, 2014
30DC, INC.
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(Exact name of registrant as specified in its charter)
Maryland 000-30999 16-1675285
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification Number)
80 BROAD STREET, 5TH FLOOR, NEW YORK, NY 10004
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(Address of Principal Executive Offices) (Zip Code)
(212) 962-4400
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Registrant's telephone number, including area code
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(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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c)
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
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On March 5, 2014, 30DC, Inc. ("the Company") entered into a Settlement Agreement
and Mutual Release ("the Settlement Agreement") with Raine Ventures, LLC. Mr.
Dan Raine, the VP of Business Development of the Company, is the Chief Executive
Officer of Raine Ventures, LLC ("Raine Ventures"). Raine Ventures, prior to the
transaction held 12.08% of the Company's issued and outstanding common stock.
On July 15, 2009, the Company completed the acquisition of Immediate Edge, which
it acquired from Dan Raine in exchange for 600,000 shares of the Company's
restricted common stock. Immediate Edge has operated as a business division of
the Company since the acquisition. Dan Raine also received 200,000 shares as a
founder of the Company and the remaining shares were a result of the 13.2 share
exchange ration as part of a reverse business combination with Infinity Capital
Group in September 2010.
Immediate Edge provides a subscription-based Internet education program offering
high-end internet marketing instruction and strategies for online commerce
practitioners. Such education includes advice on selling digital products and
services, how to run membership sites, affiliate management systems, rewards
programs and search engine optimization among other services. Immediate also
generates revenue from standalone products and affiliate marketing of targeted
third-party products to its customer base.
The Settlement Agreement, which has an effective date of February 28, 2014,
provides for Raine Ventures to acquire the operations and certain assets,
connected to the business operations of Immediate Edge. In return, Raine
Ventures will return to the Company 10,560,000 shares of the common stock of the
Company, which the Company intends to return to treasury. As a result of the
transaction, Raine Ventures will no longer be a shareholder of the Company.
The assets and operations being divested have a book value at February 28, 2014
of approximately $204,000. As result of the transaction, the Company expects to
recognize no gain or loss.
In addition, Raine Ventures' Contractor Agreement with the Company has been
terminated.
SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT.
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As a result of the divesture of Immediate Edge, discussed in Item 2.01, there
was a resulting change in the ownership structure of the Company. As a result of
the transaction, Raine Ventures, a greater than 10% shareholder, is returning
10,560,000 shares of our common stock to the Company to be cancelled and
returned to treasury. After such cancelation, Raine Ventures is no longer a
shareholder in the Company.
2
The beneficial owners of 5% or more of our stock and the holdings of our
officers and directors are as listed in the following tables.
NAME OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS NUMBER OF SHARES PERCENT OF CLASS
PRE-DIVESTURE PRE-DIVESTURE POST-DIVESTURE POST-DIVESTURE (2)
(1)
------------------------------- --------------------- ----------------------- ------------------- --------------------
Edward Dale, Director, 20,036,440 22.92% 20,036,440 26.07%
President and CEO (Directly
and Beneficially through
Marillion Partnership)
Gregory H. Laborde, Director 3,507,250 4.01% 3,507,250 4.56%
(Beneficially through GHL
Group, Ltd.)
Theodore A. Greenberg, CFO, 2,680,770 3.03% 2,680,770 3.44%
Secretary and Director (3)
Pierce McNally, Director (4) 292,500 0.11% 292,500 0.13%
Henry Pinskier, Director and 1,247,000 1.41% 1,247,000 1.60%
Chairman of the Board (5)
Jonathan Lint (Beneficially 13,487,363 15.43% 13,487,363 17.55%
through Netbloo Media, Ltd.)
Dan Raine (Beneficially 10,560,000 12.08% -0- -0-
through Raine Ventures, LLC)
All Directors and Executive
Officers as a Group (5 27,763,960 31.48% 27,763,960 35.80%
persons)
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(1) At February 28, 2014, the Company had 87,413,464 shares of its common
stock issued and outstanding. The Company had 2,600,000 options issued
and outstanding which were exercisable, but these options are not
included in this calculation as the Company considers them to be "out
of the money" and does not expect the status to change in the next 60
days.
(2) After the return of the 10,560,000 shares, the Company will have
76,853,464 shares of its common stock issued and outstanding. The
Company had 2,600,000 options issued and outstanding which were
exercisable, 2,000,000 of these options are included in this
calculation but 600,000 of these options are not included in this
calculation as the Company considers them to be "out of the money" and
does not expect the status to change in the next 60 days.
(3) Mr. Greenberg's ownership total includes 1,000,000 options which were
in the money and exercisable at February 28, 2014 and included in his
percentage.
(4) Mr. McNally's ownership total includes 192,500 options which were
exercisable at February 28, 2014, but not in the money and not
included in his percentage.
(5) Mr. Pinskier's ownership total includes 1,000,000 options which were
in the money and exercisable at February 28, 2014 and included in his
percentage.
3
Rule 13d-3 under the Securities Exchange Act of 1934 governs the determination
of beneficial ownership of securities. That rule provides that a beneficial
owner of a security includes any person who directly or indirectly has or shares
voting power and/or investment power with respect to such security. Rule 13d-3
also provides that a beneficial owner of a security includes any person who has
the right to acquire beneficial ownership of such security within sixty days,
including through the exercise of any option, warrant or conversion of a
security. Any securities not outstanding which are subject to such options,
warrants or conversion privileges are deemed to be outstanding for the purpose
of computing the percentage of outstanding securities of the class owned by such
person. Those securities are not deemed to be outstanding for the purpose of
computing the percentage of the class owned by any other person. Included in
this table are only those derivative securities with exercise prices that the
Company believes have a reasonable likelihood of being "in the money" within the
next sixty days.
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
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As a result of the transaction, Mr. Raine has resigned as the Company's VP of
Business Development, effective February 28, 2014.
SECTION 7 - REGULATION FD
ITEM 7.01 REGULATION FD DISCLOSURE.
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PRESS RELEASE
The information in this Item 7.01 of this Current Report is furnished pursuant
to Item 7.01 and shall not be deemed "filed" for any purpose, including for the
purposes of Section 18 of the Exchange Act, or otherwise subject to the
liabilities of that Section. The information in this Current Report on Form 8-K
shall not be deemed incorporated by reference into any filing under the
Securities Act or the Exchange Act regardless of any general incorporation
language in such filing.
On March 11, 2014, the Company issued a press release. The text of the press
release is attached herewith as Exhibit 99.1.
4
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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(B) PRO FORMA FINANCIAL INFORMATION. The following is a complete list of
the pro forma financial statements filed as a part of this Report.
Unaudited Pro Forma Condensed Consolidated Balance Sheet at December
31, 2013.
Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the Six Months Ended December 31, 2013.
Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the Year Ended June 30, 2013.
Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet
and Statement of Operations.
(D) EXHIBITS. The following is a complete list of exhibits filed as part
of this Report. Exhibit numbers correspond to the numbers in the
exhibit table of Item 601 of Regulation S-K.
EXHIBIT
NO. DESCRIPTION
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10.1 Settlement Agreement and Mutual Release, dated March 5, 2014
99.1 Press Release dated March 11, 2014
5
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.
30DC, INC.
By: /s/ Theodore A. Greenberg
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Theodore A. Greenberg,
Chief Financial Officer
Date: March 11, 2014
6
30DC, INC.
INTRODUCTION TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma condensed consolidated financial statements
give effect to the divestiture by 30DC, Inc. ("30DC" or "the Company") of its
Immediate Edge business to Raine Ventures, LLC ("Raine"), in exchange for 30DC
shares held by Raine, on March 5, 2014 ("Transaction"). Prior to the
Transaction, Raine owned 10,560,000 30DC common shares which represented 12.08%
of the outstanding common shares. Raine obtained a majority of its shares in
exchange for the Immediate Edge business in July 2009 and this Transaction has
Raine getting back the Immediate Edge business in return for its 30DC shares.
The unaudited pro forma information is presented for illustration purposes only
in accordance with the assumptions set forth below and in the notes to the
unaudited pro forma condensed combined financial statements.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated balance sheet removes amounts
which were included for the Immediate Edge business which was divested by 30DC
on March 5, 2014 and 10,560,000 common shares which were redeemed as part of the
divestiture transaction. The unaudited pro forma condensed consolidated balance
sheet as of December 31, 2013 as if the transaction had occurred on that date
and the unaudited pro forma condensed consolidated statements of operations for
the six months ended December 31, 2013 and the year ended June 30, 2013 as if
the transaction had occurred on the first day of each period presented removes
amounts which had been included for the Immediate Edge Business which 30DC
divested on March 5, 2014.
The unaudited pro forma condensed consolidated balance sheet and statements of
operations should be read in conjunction with the historical financial
statements of 30DC including Form 10-Q for the six months ending December 31,
2013 which was filed February 7, 2014 and Form 10-K for the year ended June 30,
2013 which was filed December 23, 2013. These unaudited pro forma condensed
consolidated financial statements may not be indicative of what would have
occurred if the Immediate Edge business had actually been divested on the
indicated dates and should not be relied upon as an indication of future results
of operations.
CONTRACT FOR SERVICES AGREEMENT
The Company and Raine were parties to a contract for services agreement, which
included Dan Raine acting as Vice President for Business Development for the
Company, which expired in July 2012 and was extended on a month to month basis
under the same terms. Terms of the Transaction include the parties' agreement
that neither has any remaining liability to the other party as a result of the
contact for services agreement.
30DC, INC. AND SUBSIDIARY
Pro Forma Condensed Consolidated Balance Sheet
December 31, 2013
Unaudited
Pro Forma
As Filed Adjustments Pro Forma
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ASSETS
Current Assets
Cash and Cash Equivalents $ 144,721 $ (875) $ 143,846
Restricted Cash 187,609 187,609
Accrued Commissions Receivable 2,000 2,000
Accounts Receivable 237,596 237,596
Prepaid Expenses 8,138 (3,928) 4,210
Assets of Discontinued Operations 89,833 89,833
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Total Current Assets 669,897 (4,803) 665,094
-
Property and Equipment, Net 21,638 21,638
Intangible Assets, Net 253,000 253,000
Goodwill 2,252,849 (225,285) 2,027,564
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Total Assets $ 3,197,384 $ (230,088) $ 2,967,296
================ =================== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 297,168 $ 297,168
Accrued Expenses and Refunds 673,636 (6,919) 666,717
Deferred Revenue 123,849 (15,014) 108,835
Due to Related Parties 699,342 (4,437) 694,905
Liabilities of Discontinued Operations 226,009 226,009
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Total Current Liabilities 2,020,004 (26,370) 1,993,634
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Total Liabilities 2,020,004 (26,370) 1,993,634
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Stockholders' Equity
Preferred Stock, Par Value $0.001,
10,000,000 Authorized, -0- Issued -
Common Stock, Par Value $0.001,
100,000,000 authorized,
76,853,464 pro forma issued and outstanding 87,413 (10,560) 76,853
Paid in Capital 4,005,671 (193,158) 3,812,513
Accumulated Deficit (2,812,846) (2,812,846)
Accumulated Other Comprehensive Loss (102,858) (102,858)
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Total Stockholders' Equity 1,177,380 (203,718) 973,662
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Total Liabilities and Stockholders' Equity $ 3,197,384 $ (230,088) $ 2,967,296
================ =================== ==============
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
30DC, INC. AND SUBSIDIARY
Pro Forma Condensed Consolidated Statements of Operations
For the Six Months Ended December 31, 2013
Unaudited
Pro Forma
As Filed Adjustments Pro Forma
------------------ --------------- -------------
Revenue
Commissions $ 32,285 $ (555) $ 31,730
Subscription Revenue 193,580 (193,580) -
Products and Services 2,118,896 - 2,118,896
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Total Revenue 2,344,761 (194,135) 2,150,626
Operating Expenses 2,119,702 (221,096) 1,898,606
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Operating Income (Loss) 225,059 26,961 252,020
Other Income
Forgiveness of Debt 93,513 - 93,513
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Total Other Income 93,513 - 93,513
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Income (Loss) From Continuing Operations 318,572 26,961 345,533
Income (Loss) From Discontinued Operations 11,974 - 11,974
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Net Income (Loss) $ 330,546 $ 26,961 $ 357,507
================== =============== =============
Weighted Average Common Shares Outstanding
Basic 87,223,215 (10,560,000) 76,663,215
Diluted 87,723,215 (10,560,000) 77,163,215
Earnings Per Common Share (Basic)
Continuing Operations $ 0.00 $ (0.00) $ 0.00
Discontinued Operations 0.00 0.00 0.00
Net Income (Loss) Per Common Share $ 0.00 $ (0.00) $ 0.00
Earnings Per Common Share (Diluted)
Continuing Operations $ 0.00 $ (0.00) $ 0.00
Discontinued Operations 0.00 0.00 0.00
Net Income (Loss) Per Common Share $ 0.00 $ (0.00) $ 0.00
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
30DC, INC. AND SUBSIDIARY
Pro Forma Condensed Consolidated Statement of Operations
Year Ended June 30, 2013
Unaudited
Pro Forma
As Filed Adjustments Pro Forma
------------- --------------- ---------------
Revenue
Commissions $ 255,374 $ (4,268) $ 251,106
Subscription Revenue 516,867 (500,746) 16,121
Products and Services 940,747 (241) 940,506
Seminars and Mentoring 260,084 260,084
------------- --------------- ---------------
Total Revenue 1,973,072 (505,255) 1,467,817
Operating Expenses 2,461,574 (428,599) 2,032,975
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Operating Income (Loss) (488,502) (76,656) (565,158)
Other Income (Expense)
Forgiveness of Debt 13,461 13,461
Foreign Currency Transaction Loss (34) (34)
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Total Other Income (Expense) 13,427 - 13,427
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Income (Loss) From Continuing Operations (475,075) (76,656) (551,731)
Income (Loss) From Discontinued Operations 67,433 67,433
------------- --------------- ---------------
Net Income (Loss) $ (407,642) $ (76,656) $ (484,298)
============= =============== ===============
Weighted Average Common Shares Outstanding
Basic 82,657,326 (10,560,000) 72,097,326
Diluted 82,657,326 (10,560,000) 72,097,326
Income (Loss) Per Common Share (Basic and Diluted)
Continuing Operations $ (0.01) $ (0.00) $ (0.01)
Discontinued Operations 0.00 0.00 0.00
Net Income (Loss) Per Common Share $ (0.00) $ (0.00) $ (0.01)
The accompanying notes are an integral part of the
consolidated financial statements.
30DC, INC.
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2013
The 30DC, Inc. ("30DC" or "the Company") pro forma condensed consolidated
balance sheet is derived from the unaudited interim balance sheet for December
31, 2013. Pro forma adjustments were made to remove from the balance sheet the
amounts which had been included for the Immediate Edge Business which 30DC
divested on March 5, 2014. As part of the divestiture the Company redeemed
10,560,000 of its common shares from Raine Ventures, LLC, which received the
Immediate Edge Business. A pro forma adjustment was made to remove the
10,560,000 shares from the shareholders' equity section of the balance sheet. No
gain or loss was reported for the divestiture; the common shares are being
canceled and paid in capital has been adjusted for the net book value of the
assets divested in excess of the par value amount of the shares redeemed.
The amount of goodwill carrying value at December 31, 2013 which was attributed
to the Immediate Edge business was estimated based upon Accounting Standards
Update 350-20-40 and the relative estimated fair market values of Immediate Edge
and all other businesses owned by 30DC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2013
The 30DC, Inc. ("30DC") pro forma condensed consolidated statement of operations
for the six months ended December 31, 2013 is derived from the unaudited interim
statement of operations for the six months ended December 31, 2013. Adjustments
were made to remove from the statement of operations the amounts which had been
included for the Immediate Edge Business which 30DC divested on March 5, 2014.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JUNE 30, 2013
The 30DC, Inc. ("30DC") pro forma condensed consolidated statement of operations
for the year ended June 30, 2013 is derived from the audited statement of
operations for the year ended June 30, 2013. Adjustments were made to remove
from the statement of operations the amounts which had been included for the
Immediate Edge Business which 30DC divested on March 5, 2014.
