UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Act of 1934
(Amendment No. 2) *
| deltathree, Inc. |
| (Name of Issuer) |
| |
| Common Stock, $0.001 Par Value |
| (Title of Class of Securities) |
| |
| 24783N-10-2 |
| (CUSIP Number) |
| |
D4 Holdings, LLC 349-L Copperfield Blvd. #407 Concord, NC 28025 (704) 260-3304 with a copy to: Craig S. Mordock, Esq. Jones Day 3161 Michelson Blvd., Suite 800 Irvine, CA 92612 (949) 851-3939 |
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) |
| |
| March 2, 2011 |
| (Date of Event which Requires Filing of this Statement) |
If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 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 Rule 13d-7(b) 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 (the “Exchange 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).
SCHEDULE 13D
| 1 | NAME OF REPORTING PERSONS. D4 Holdings, LLC |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See instructions) (a) o (b) ý |
| 3 | SEC USE ONLY |
| 4 | SOURCE OF FUNDS (See instructions) WC |
| 5 | CHECK BOX 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 | 7 | SOLE VOTING POWER 79,000,000* |
BENEFICIALLY OWNED BY | 8 | SHARED VOTING POWER 0 |
EACH REPORTING | 9 | SOLE DISPOSITIVE POWER 79,000,000* |
PERSON WITH | 10 | SHARED DISPOSITIVE POWER 0 |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 79,000,000* |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See instructions) o |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 70.4%* |
| 14 | TYPE OF REPORTING PERSON (See instructions) OO |
| 1 | NAME OF REPORTING PERSONS. Manna Holdings, LLC |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See instructions) (a) o (b) ý |
| 3 | SEC USE ONLY |
| 4 | SOURCE OF FUNDS (See instructions) WC |
| 5 | CHECK BOX 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 | 7 | SOLE VOTING POWER 0 |
BENEFICIALLY OWNED BY | 8 | SHARED VOTING POWER 79,000,000* |
EACH REPORTING | 9 | SOLE DISPOSITIVE POWER 0 |
PERSON WITH | 10 | SHARED DISPOSITIVE POWER 79,000,000* |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 79,000,000* |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See instructions) o |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 70.4%* |
| 14 | TYPE OF REPORTING PERSON (See instructions) OO |
| 1 | NAME OF REPORTING PERSONS. Praescient, LLC |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See instructions) (a) o (b) ý |
| 3 | SEC USE ONLY |
| 4 | SOURCE OF FUNDS (See instructions) N/A |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION North Carolina |
NUMBER OF SHARES | 7 | SOLE VOTING POWER 0 |
BENEFICIALLY OWNED BY | 8 | SHARED VOTING POWER 79,000,000* |
EACH REPORTING | 9 | SOLE DISPOSITIVE POWER 0 |
PERSON WITH | 10 | SHARED DISPOSITIVE POWER 79,000,000* |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 79,000,000* |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See instructions) o |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 70.4%* |
| 14 | TYPE OF REPORTING PERSON (See instructions) OO |
| 1 | NAME OF REPORTING PERSONS. Robert Stevanovski |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See instructions) (a) o (b) ý |
| 3 | SEC USE ONLY |
| 4 | SOURCE OF FUNDS (See instructions) N/A |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION USA |
NUMBER OF SHARES | 7 | SOLE VOTING POWER 0 |
BENEFICIALLY OWNED BY | 8 | SHARED VOTING POWER 79,000,000* |
EACH REPORTING | 9 | SOLE DISPOSITIVE POWER 0 |
PERSON WITH | 10 | SHARED DISPOSITIVE POWER 79,000,000* |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 79,000,000* |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See instructions) o |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 70.4%* |
| 14 | TYPE OF REPORTING PERSON (See instructions) IN |
EXPLANATORY STATEMENT
This Amendment No. 2 to Schedule 13D (“Amendment No. 2”) relates to the Common Stock, par value $0.001 per share (the “Common Stock”) of deltathree, Inc. (the “Company”). This Amendment No. 2 is being jointly filed by (i) D4 Holdings, LLC, a Delaware limited liability company (“D4 Holdings”), (ii) Manna Holdings, LLC, a Delaware limited liability company (“Manna Holdings”), (iii) Praescient, LLC, a North Carolina limited liability company (“Praescient”), and (iv) Robert Stevanovski, an individual (collectively, the “Reporting Persons”), to amend and supplement the information set forth below of the Schedule 13D previously filed by the Reporting Persons with the Securities and Exchange Commission on February 23, 2009 (the “Original Filing”), as amended by Amendment No. 1 to Schedule 13D filed on August 12, 2010. Unless otherwise indicated, capitalized terms used herein without definitions have the meanings assigned to them in the Original Filing.
| ITEM 3. | Source and Amount of Funds or Other Consideration. |
The information set forth in Item 6 below is incorporated herein by reference. The funds for the loans made by D4 Holdings to the Company were derived from the working capital of D4 Holdings, all of which was derived from capital contributions by the members of Manna Holdings. Funds to be used in connection with any exercise of the 2011 Warrant (as defined below) are expected to be derived from the same source.
| ITEM 5. | Interests in Securities of the Issuer. |
The information contained in Rows (7) through (13) of the cover pages of this Amendment No. 2 for each the Reporting Persons are incorporated herein by reference. The percentages used herein are calculated based upon the 72,243,971 shares of Common Stock represented by the Company to be outstanding on November 1, 2010 as reported in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2010.
(a)-(b) As of the date of this Amendment No. 2, D4 Holdings is the record holder of (i) 39,000,000 shares of Common Stock, (ii) warrants to purchase an aggregate of 35,000,000 shares of Common Stock (the “Warrants”), (iii) 5,000,000 shares of Common Stock underlying outstanding principal amounts under the Convertible Note (defined below). Assuming the exercise in full of all Warrants and the conversion of the principal amounts outstanding under the Convertible Note, the Reporting Persons beneficially own 79,000,000 shares of Common Stock, constituting approximately 70.4% of the total issued and outstanding shares of Common Stock (based on calculations made in accordance with Rule 13d-3 of the Exchange Act).
(c) The information set forth in Item 6 below is incorporated herein by reference. Other than the transactions described in Item 6 below, none of the Reporting Persons has effected any transactions in respect of the Common Stock within the past 60 days.
| ITEM 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. |
On March 1, 2010, D4 Holdings entered into a Loan and Security Agreement (the “Initial Loan Agreement”) with the Company and each of its subsidiaries pursuant to which D4 Holdings agreed to loan the Company up to $1,200,000 in aggregate principal amount. On August 10, 2010, D4 Holdings entered into a Second Loan and Security Agreement (the “Second Loan Agreement”) with the Company and its subsidiaries pursuant to which D4 Holdings agreed to loan the Company up to an additional $1,000,000 in aggregate principal amount. Interest on any outstanding loan advances under the foregoing loan agreements accrues at the rate of 12% per annum, and the obligations under the loans are secured by all of the assets of the Company and its subsidiaries.
In connection with the execution of the Second Loan Agreement, the Company issued to D4 Holdings a warrant to purchase up to 4,000,000 shares of the Company’s Common Stock at an exercise price of $0.1312 per share (the “2010 Warrant”). The 2010 Warrant was fully vested on issuance and has a term of 10 years. Also in connection with the execution of the Second Loan Agreement, the parties amended the Initial Loan Agreement to include a cross-default provision with respect to the Second Loan Agreement.
On March 2, 2011, D4 Holdings entered into a Second Amendment to and Consent under Loan and Security Agreement (the "Loan Amendment") which provides, among other things, for the extension of the maturity date under the Initial Loan Agreement to March 1, 2012. In connection with the extension of the maturity date under the Initial Loan Agreement, the Company issued a Warrant (the “2011 Warrant”) to D4 Holdings, exercisable for ten years, to purchase up to 1,000,000 shares of Common Stock at an exercise price of $0.096 per share. The 2011 Warrant was fully vested on issuance and has a term of 10 years.
Also on March 2, 2011, D4 Holdings entered into a Third Loan and Security Agreement (the “Third Loan Agreement”) with the Company and its subsidiaries pursuant to which D4 Holdings agreed to loan the Company up to an additional $1,600,000 in aggregate maximum principal amount. Interest on any outstanding loan advances under the foregoing loan agreement accrues at the rate of 12% per annum, and the obligations under the loans are secured by all of the assets of the Company and its subsidiaries. In connection with the Third Loan Agreement, the Company issued to D4 Holdings a convertible promissory note (the “Convertible Note”) under which D4 Holdings has the right to convert, at any time upon written notice to the Company, all or any portion of the outstanding principal amount under the Convertible Note into that number of shares of the Company’s common stock determined by dividing such principal amount by $0.08 per share (subject to adjustment for stock splits, dividends, reorganizations and similar events, as provided in the Convertible Note), and all accrued but unpaid interest on the principal portion of the loan will become due upon such conversion. Assuming the maximum principal amount under the Third Loan Agreement was drawn by the Company, D4 Holdings would have the right to convert such outstanding principal amount into 20,000,000 shares of the Company’s common stock. As of the date of this Amendment No. 2, the Company had received advances of an aggregate of $400,000 under the Third Loan Agreement, which outstanding principal amount is convertible into an aggregate of 5,000,000 shares of Common Stock.
The foregoing description of the Initial Loan Agreement (as amended), the Loan Amendment, the Third Loan Agreement, the Convertible Note and the 2011 Warrant does not purport to be a complete summary and is qualified in its entirety by reference to the full texts of such agreements, each of which is filed as an exhibit to this Amendment No. 2.
| ITEM 7. | Material to be Filed as Exhibits. |
| 99.1 | Loan and Security Agreement, dated as of March 1, 2010, by and among deltathree, Inc., Delta Three Israel, Ltd., DME Solutions, Inc. and D4 Holdings, LLC (incorporated by reference to the Current Report on Form 8-K filed by the Company on March 4, 2010). |
| 99.2 | Second Loan and Security Agreement, dated as of August 10, 2010, by and among deltathree, Inc., Delta Three Israel, Ltd., DME Solutions, Inc. and D4 Holdings, LLC (incorporated by reference to the Current Report on Form 8-K filed by the Company on August 11, 2010). |
| 99.3 | Third Loan and Security Agreement, dated as of March 2, 2011, by and among deltathree, Inc., Delta Three Israel, Ltd., DME Solutions, Inc. and D4 Holdings, LLC (incorporated by reference to the Current Report on Form 8-K filed by the Company on March 3, 2011). |
| 99.4 | Convertible Promissory Note, dated March 2, 2011, by deltathree, Inc., Delta Three Israel, Ltd., DME Solutions, Inc., in favor of D4 Holdings, LLC in a principal amount of $1,600,000 (incorporated by reference to the Current Report on Form 8-K filed by the Company on March 3, 2011). |
| 99.5 | Warrant, dated March 2, 2011, between deltathree, Inc., and D4 Holdings, LLC (incorporated by reference to the Current Report on Form 8-K filed by the Company on March 3, 2011). |
| 99.6 | Second Amendment to and Consent under Loan and Security Agreement, dated as of March 2, 2011, by and among deltathree, Inc., Delta Three Israel, Ltd., DME Solutions, Inc. and D4 Holdings, LLC (incorporated by reference to the Current Report on Form 8-K filed by the Company on March 3, 2011). |
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.(1)
Date: March 8, 2011
| | D4 HOLDINGS, LLC | |
| | | | | |
| | By: | PRAESCIENT, LLC, its manager | |
| | | | | |
| | | By: | /s/ Colleen R. Jones | |
| | | | Name: Colleen R. Jones | |
| | | | Title: Authorized Signatory | |
| | | | | |
| | MANNA HOLDINGS, LLC | |
| | | | | |
| | By: | PRAESCIENT, LLC, its managing member | |
| | | | | |
| | | By: | /s/ Colleen R. Jones | |
| | | | Name: Colleen R. Jones | |
| | | | Title: Authorized Signatory | |
| | | | | |
| | PRAESCIENT, LLC | |
| | | | | |
| | | By: | /s/ Colleen R. Jones | |
| | | | Name: Colleen R. Jones | |
| | | | Title: Authorized Signatory | |
| | | | | |
| | /s/ Robert Stevanovski* | |
| | Robert Stevanovski, individually | |
| * By: | /s/ Colleen R. Jones | |
| | Colleen R. Jones, attorney-in-fact (2) | |
| (1) | This Amendment No. 2 is being filed jointly by the Reporting Persons pursuant to the Joint Filing Agreement dated February 23, 2009, filed as Exhibit 99.1 to the Original Filing and incorporated herein by reference. |
| (2) | Duly authorized under Power of Attorney dated February 13, 2009, filed as Exhibit 99.2 to the Original Filing and incorporated herein by reference. |
