UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 reported) November 16, 2007
NUTRADYNE, INC.
(formerly Digital Learning Management Corporation)
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(Exact name of registrant as specified in its charter)
DELAWARE 000-26293 20-1661391
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
927 Canada Court, City of Industry, CA 91748
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (626)581-9098
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Digital Learning Management Corporation
680 Langsdorf Drive, Fullerton, CA, 92831
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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 (see General Instructions A.2 below):
[ ] 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))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On or near November 14, 2007, Nutradyne, Inc. ("Nutradyne") entered into
an agreement with Umesh Patel whereby Mr. Patel agreed to accept 1,000,000
shares of Nutradyne common stock and a warrant to purchase another 1,250,000
shares of common stock at an exercise price of $.50 per share in exchange for a
release of all debt owed to Mr. Patel through November 16, 2007. The warrant has
a five year term. A copy of the Agreement for Conversion of Debt is attached
hereto as Exhibit 10.01. A copy of the Warrant is attached hereto as Exhibit
10.02. Mr. Patel was the Company's Chairman, Director and Chief Financial
Officer until the close of the Amended Share Exchange Agreement on November 16,
2007 as further explained in Item 2.01. Mr. Patel remains a Director and Vice
President of the Company.
On or near November 1, 2007 Nutradyne entered into an Agreement for
Conversion of Debenture with David L. Kagel, Trustee wherein Mr. Kagel, as
Trustee for certain debenture holders agreed to convert all of the outstanding
liability associated with the debentures in exchange for 3,500,000 shares of
Nutradyne common stock. The specific debentures which were converted into
3,500,000 shares of common stock are as follows:
(a) Convertible Debenture dated February 27, 2004, in the original
principal sum of $1,000,000.00 executed by Digital Learning Institute, Inc., a
Delaware corporation (hereinafter called "Borrower"), payable to the order of
Assignor as therein provided, as more fully described in and secured by two
Security Agreements of even date therewith from Borrower and Digital Learning
Management Corporation to Renaissance Capital Growth & Income Fund, III, Inc.,
Renaissance US Growth Investment Trust PLC, BFSUS Special Opportunities Trust
PLC, and Renn Capital Group, Inc., as Agent (the "Secured Parties"); as assigned
to David L. Kagel, Trustee pursuant to an Assignment of Note and Lien dated
December 15, 2006.
(b) Convertible Debenture dated February 27, 2004, in the original
principal sum of $1,000,000.00 executed by Digital Learning Institute, Inc., a
Delaware corporation (hereinafter called "Borrower"), payable to the order of
Assignor as therein provided, as more fully described in and secured by two
Security Agreements of even date therewith from Borrower and Digital Learning
Management Corporation to Renaissance Capital Growth & Income Fund, III, Inc.,
Renaissance US Growth Investment Trust PLC, BFSUS Special Opportunities Trust
PLC, and Renn Capital Group, Inc., as Agent (the "Secured Parties"); as assigned
to David L. Kagel, Trustee pursuant to an Assignment of Note and Lien dated
December 15, 2006.
(c) Convertible Debenture dated February 27, 2004, in the original
principal sum of $1,000,000.00 executed by Digital Learning Institute, Inc., a
Delaware corporation (hereinafter called "Borrower"), payable to the order of
Assignor as therein provided, as more fully described in and secured by two
Security Agreements of even date therewith from Borrower and Digital Learning
Management Corporation to Renaissance Capital Growth & Income Fund, III, Inc.,
Renaissance US Growth Investment Trust PLC, US Special Opportunities Trust PLC,
and Renn Capital Group, Inc., as Agent (the "Secured Parties"); as assigned to
David L. Kagel, Trustee pursuant to an Assignment of Note and Lien dated
December 15, 2006.
There is no material relationship between the Company and the debenture
holders or Mr. Kagel other than the debentures and agreement for conversion
thereof. A copy of the Agreement for Conversion of Debt is attached hereto as
Exhibit 10.03.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On November 16, 2007, Nutradyne, Inc. (formerly Digital Learning
Management Corporation) ("Nutradyne") closed the Amended Exchange Agreement with
Changchun Yongxin Dirui Medical Co., Ltd, a China corporation ("Yongxin") and
all of the shareholders of Yongxin.
In accordance with the Amended Exchange Agreement, Nutradyne issued
21,000,000 shares of newly issued common stock and 5 million shares of Series A
Preferred Stock to the Yongxin shareholders or their designees, representing,
immediately following closing, and the issuance of common stock to Mr. Patel and
the debenture holders, 70% of the total issued and outstanding shares of common
stock. A complete schedule of the share recipients is set forth in Item 3.02
hereof and incorporated into this Item 2.01.
The Series A Convertible Preferred Stock is convertible over a 3 year
period, into up to 30 million shares of common stock. In particular, the holder
of any share of shares of Series A Convertible Preferred Stock shall have the
right, at its option, (i) at any time hereafter (except that upon any
liquidation of the Corporation, the right of conversion shall terminate at the
close of business on the business day fixed for payment of the amount
distributable on the Series A Convertible Preferred Stock) to convert, any such
shares of Series A Convertible Preferred Stock into such number of fully paid
and nonassessable shares of Common Stock on a six (6) for one (1) basis. No more
than 1,666,666 shares of the Series A Convertible Preferred Stock may be
converted in each of the three periods following issuance. The conversion
formula is conditioned on the Corporation earning no less than 3 million dollars
of net income in for the fiscal year ending March 31, 2008; $4 million dollars
of net income in the fiscal year ending March 31, 2009 and $5 million dollars of
net income in the fiscal year ending March 31, 2010. In the event that in any of
the three fiscal years, the Corporation earns less than required net income
amounts for conversion, then the conversion right shall be proportionately
reduced by the amount of the shortfall below the required net income amount,
with the "catch-up" right to convert additional shares to the extent that the
net income exceeds 3 million; 4 million and 5 million dollars respectively in
each of the three consecutive years. In no event shall this conversion right
allow for the conversion of the Series A Preferred Stock into more than 6 common
shares for each share of Series A Preferred Stock over the course of the
aforementioned three calendar years. The net income requirements shall be based
upon an audit of the revenues for each fiscal year. All conversions shall be
made within 30 days of the completion of such audit.
Each share of Series A Convertible Preferred Stock entitles the holder to
six (6) votes on all matters to be voted on by the stockholders.
The Series A Convertible Preferred Stock does not earn any dividends
during the conversion period. Following the conversion period, each share of
Series A Convertible Preferred Stock that has not been converted, earns a
dividend of $.10 per share per year.
Digital Learning Corporation, remains a wholly owned operating subsidiary
of the Company following Closing.
Nutradyne had never engaged in a transaction with Yongxin nor had any
past contractual relationship other than the Proposed Acquisition. Nutradyne
began negotiations for the Share Exchange Agreement with Yongxin in November
2006 following an introduction between our companies by our independent auditor,
Hamid Kabani.
The following is a brief description of Yongxin:
Yongxin was established in 1993, for the purpose of engaging in the
business of the sale of medicines wholesale, retail and third-party medicine
logistics. Yongxin is located in Changchun City, Jilin Provincial with a staff
of 358 of which 18 are Licensed Pharmacists and 55% of which have a college
education. As of fiscal year end December 31, 2005 Yongxin had assets of
$10,218,204 and liabilities of $5,550,465. For the nine months ended September
30, 2006, Yongxin had assets of $13,337,855 and liabilities of $7,373,424.
With the business idea of "sustained operation, integrated innovation",
Yongxin has built a marketing network covering the whole Jilin province and
radiating the northeast region, and the brand image of "sustained innovation" of
Yongxin has firmly enjoyed popular support. In 2003, Yongxin passed Jilin
Provincial FSDA Quality Certification System, National GSP Certification and won
a number of honorary titles for several times such as "unit trusted by
government", and the development of Yongxin got strong support from national,
provincial and municipal governments.
In 2004, Yongxin Medical established "Jilin Province Yongxin Chain
Drugstore Ltd."(hereinafter referred to Yongxin Drugstore) with an investment of
RMB 2,500,000 (equivalent to $303,000) to focus on developing a terminal network
market. In July 2005, the company obtained the franchise right in Jilin province
from American Medicine Shoppe (Meixin International Medical Chains) and now has
developed 4 chains of "Meixino Yongxin". As of October 2006, Yongxin has
developed 11 retail chains in the name of Yongxin Drugstore which covers a
business area of 8,000 m2, scattered in key business region and large community
inside Changchun city.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
In accordance with the Agreement for Conversion of Debt by and between
the Company and Umesh Patel as further described in Item 1.01 hereof, on or near
November 16, 2007, the Company issued 1,000,000 shares of common stock to Mr.
Patel. In addition, the Company issued to Mr. Patel a warrant to purchase
1,250,000 shares of common stock at an exercise price of $.50 per share. The
warrant has a five year term and contains a cashless exercise provision. The
Company relied on the exemption contained in Section 4(2) of the Securities Act
of 1933 in making this issuance.
In accordance with the Agreement for Conversion of Debentures by and
between the Company and David L. Kagel, Trustee, as further described in Item
1.01 hereof, on or near November 16, 2007, the Company issued the following
shares of common stock: (i) Chi Group, Inc. - 1,156,666 shares; (ii) Up and
Running Productions, Inc. - 1,256,666 shares; (iii) Linear Capital Group, Inc. -
1,156,157 shares; and (iv) Laura Anthony, Esquire - 30,000 shares. The Company
relied on the exemption contained in Section 3(a)(9) of the Securities Act of
1933 in making this issuance.
In accordance with the Amended Exchange Agreement, as further described
in Item 2.01 hereof, Nutradyne issued 21,000,000 shares of newly issued common
stock and 5 million shares of Series A Preferred Stock to the Yongxin
shareholders or their designees as follows:
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NAME NUMBER OF COMMON STOCK NUMBER OF PREFERRED STOCK
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1. Misala Holdings Inc. BVI 600,000.00 3,000,000.00
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2. Boom Day Investments Ltd. BVI 5,400,000.00 2,000,000.00
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3. Accord Success Ltd., BVI 5,400,000.00
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4. Perfect Sum Investment Ltd. BVI 1,200,000.00
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5. Full Spring Group Ltd. BVI 1,800,000.00
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6. Grand Opus Co. Ltd., BVI 2,400,000.00
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7. Master Power Holdings Corp Ltd. BVI 4,200,000.00
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TOTAL 21,000,000.00 5,000,000.00
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The Company relied on the exemption contained in Section 4(2) of the
Securities Act of 1933 in making this issuance.
ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT
Upon the Closing of the Amended Share Exchange Agreement, there was a
change in control of Nutradyne. Following the Closing and the issuance of
securities for debt (as further described in Items 1.01 and 3.02 hereof) the
Yongxin shareholders and designees obtained control of Nutradyne. The table
below sets forth the share ownership of the Yongxin shareholders and designees.
% OF OUTSTANDING
COMMON STOCK -
BASED ON NUMBER OF SHARES
NUMBER OF SHARES OF 30,000,001 SHARES OF PREFERRED
NAME COMMON STOCK OUTSTANDING STOCK
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1. Misala Holdings Inc. BVI 600,000.00 2.00% 3,000,000.00
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2. Boom Day Investments Ltd. BVI 5,400,000.00 18.00% 2,000,000.00
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3. Accord Success Ltd., BVI 5,400,000.00 18.00%
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4. Perfect Sum Investment Ltd. BVI 1,200,000.00 4.00%
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5. Full Spring Group Ltd. BVI 1,800,000.00 6.00%
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6. Grand Opus Co. Ltd., BVI 2,400,000.00 8.00%
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7. Master Power Holdings Coup Ltd. BVI 4,200,000.00 14.00%
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TOTAL 21,000,000.00 70.00% 5,000,000.00
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In addition, in accordance with the Amended Share Exchange Agreement, our
officers and directors tendered their resignations and appointed Yongxin
designees in their stead. Our new directors and officers are as follows:
Yongxin Liu - Chairman of the Board, Chief Executive Officer.
Samuel Liu - Director, President, Chief Operating Officer.
Yongkui Liu - Director, Vice President, Chief Financial Officer.
Yongmei Wang - Director, Vice President, Treasurer.
Umesh Patel - Vice President
The table below reflects the ownership of the 21,000,000 shares of common
stock and 5,000,000 shares of preferred stock to be received by the Yongxin
shareholders in the Share Exchange as well as ownership directly or indirectly,
by each of our directors, the Named Executive Officer and principal shareholders
and by our Directors and officers as a group following the Closing of the Share
Exchange transaction.
% OF OUTSTANDING
COMMON STOCK -
BASED ON NUMBER OF SHARES
NUMBER OF SHARES OF 30,000,001 SHARES OF PREFERRED
NAME COMMON STOCK OUTSTANDING STOCK
==================================================== ======================= ==================================
Yongxin Liu 600,000 2.00% 3,000,000
Samuel Liu 0
Yongkui Liu 5,400,000 18.00% 2,000,000
Yongmei Wang 1,200,000 4.00% 0
Umesh Patel 1,568,095 5.23% 0
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Officers and Directors as a Group 8,768,095 29.23% 5,000,000
Accord Success Ltd., BVI 5,400,000 18.00%
Full Spring Group Ltd. BVI 1,800,000 6.00%
Grand Opus Co. Ltd., BVI 2,400,000 8.00%
Master Power Holdings Coup Ltd. BVI 4,200,000 14.00%
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Total 22,568,095(9)
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There are no arrangements or understandings among members of either the
former or new control groups and their associates with respect to the election
of directors or other matters.
ITEM 5.02(B) DEPARTURE OF DIRECTORS OF CERTAIN OFFICERS
In accordance with the Amended Share Exchange Agreement and from November
12, 2007 through the Closing on November 16, 2007, all of our executive officers
and directors resigned and appointed new executive officers and directors in
their stead. In particular, the following individuals resigned: (i) Umesh I
Patel, as Chairman, President and Chief Financial Officer (note Mr. Patel
remained a Director and has been appointed a Vice President); (ii) Craig
Nagasugi, as Chief Executive Officer; (iii) Al Jinnah, as General Counsel and
Secretary; (iv) Gregory Frazer as Director; and (v) Khalid Sheikh, as Director.
ITEM 5.02(C) ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
The following is a list of the new officers and directors:
Yongxin Liu - Chairman of the Board, Chief Executive Officer.
Samuel Liu - Director, President, Chief Operating Officer.
Yongkui Liu - Director, Vice President, Chief Financial Officer.
Yongmei Wang - Director, Vice President, Treasurer.
Umesh Patel - Director
None of our new officers and directors are parties to or have been
parties in the last five years to a legal proceeding which require disclosure
herein.
Yongxin Liu (age 39). Yongxin Liu is a seasoned and well respected
Chinese business executive. Mr. Liu graduated from the Northeast Normal
University in 1994. He cofounded Yongxin with his brother Yongkui Liu. Since
2001 Mr. Yongxin Liu has served as Chairman & CEO of Yongxin. He studied at the
Beijing University in 2003-2004. Yongxin Liu is not related to either Samuel
Liu.
Samuel Liu (age 45). Samuel Liu was a senior manager in a large trading
company (annual revenues reaching 300 million dollars) in America from 1986 -
1993. From 1994 - 2002 he was the president of a nutri-ceuticals manufacturer
(annual revenues over 80 million dollars). Mr. Liu is active in organizing and
managing a number of foreign investment projects to China. He also counsels
China companies in doing business in the US, and in mergers and acquisitions.
Mr. Liu has a Master of Arts degree from Beijing University, 1985. Samuel Liu is
not related to either Yongxin Liu or Yongkui Liu.
Yongkui Liu (age 37). He is the brother Yongxin Liu, and a co-founder of
the Yongxin medicin group. Mr. Liu has been with Yonxin since 1993. Yongkui Liu
started work as worked as a Deputy General Manager of Yongxin medicine group. In
2001, he became President & COO of Yongxin. He studied in Beijing Renmin
University between 2004-2006.
Yongmei Wang (age 33). Mr. Wang has been with Yongxin since 1998. Yongmei
Wang started work as Business Manager of Yongxin since 1998. "
Umesh Patel (age 50). Mr. Patel has over 15 years experience in
business development and sales. From 1990 to 2001, Mr. Patel served as the
President of Tech Med Billing Services, where he was responsible for managing
and projecting financials for the company. In 2001, Mr. Patel co-founded the
School of I.T. Mr. Patel served as its Vice President and was responsible for
marketing. Mr. Patel currently is President of Digital Learning Management
Corporation.
None of the officers or directors have previously received compensation
from the Company nor are any party to a compensation arrangement with the
Company
Mr. Patel's compensation was as follows:
Annual Compensation
Options/
Name and Principal Position Year Salary Bonus Sars
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Umesh Patel, Chairman, 2006 (1) $240,000 $-- --
President and 2005 (1) 240,000 -- --
Chief Financial Officer 2004 120,000 -- --
(1) amounts were accrued but not paid at the time and were subsequently
satisfied as part of the Agreement for Conversion of Debt further described in
Item 1.01 hereof.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION
Effective October 24, 2007, our Articles of Incorporation were amended to
effectuate a reverse split of 11.97492 to 1 of the Company's common stock and to
change the name of the Company to Nutradyne, Inc.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Any required financial statements shall be filed by amendment as soon as
practicable, but not later than 71 days after the date this Current Report on
Form 8-K was required to be filed.
(b) Pro Forma Financial Information.
Any required pro forma financial information will be filed by amendment
as soon as practicable, but not later than 71 days after the date this Current
Report on Form 8-K was required to be filed.
(d) Exhibits. The following exhibits are being furnished herewith:
10.01 Agreement for Conversion of Debt
10.02 Warrant
10.03 Agreement for Conversion of Debentures
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.
Date: November 26, 2007 NUTRADYNE, INC.
By: /s/ Yongxin Liu
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Name: Yongxin Liu
Title: Chairman of the Board