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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): May 24, 2004
CDKNET.COM, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-27587 22-3586087
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
948 US Highway 22
North Plainfield, NJ 07060
(Address of Principal Executive Offices)
(908) 769-3232
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(Registrant's telephone number, including area code)
N/A
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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 240.24d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.23e-4(c))
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Explanatory Note: This filing is late. Information contained in the filing is
also contained in the Form 10-KSB report for the year ended may 31, 2004, filed
on September 17, 2004. Since the material documents relating to the transactions
were executed in May 2004, this report relates to the completion of the
transaction.
Item 2.01 Completion of Acquisition or Disposition of Assets
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Introduction
On May 24, 2004 we completed the merger ("Merger") of CDK Merger Corp., a wholly
owned subsidiary of the Company ("Merger Sub") with Miletos, Inc. a Delaware
corporation ("Miletos") pursuant to that Agreement and Plan of Merger dated May
7, 2004 by and among the company, Merger Sub and Miletos, and Andreas Typaldos,
in his individual capacity and as representative (the "Representative") of the
following stockholders Miletos (collectively, the "Designated Stockholders"):
Renee Typaldos, Patra Holdings LLC, Andreas Typaldos Family Limited Partnership
and Renee Typaldos family Partnership, Ltd. (the "Merger Agreement")
The Transactions
On May 24, 2004, CDK Merger Corp., our wholly owned subsidiary, filed a merger
certificate completing the acquisition of Miletos, Inc., a previously
unaffiliated Delaware corporation. The consideration for the Merger was
16,090,577 restricted shares of our common stock and the assumption of certain
liabilities of Miletos' predecessor and former controlling equity holders. The
Merger was completed according to the terms of a Agreement and Plan of Merger
dated as of May 7, 2004 by and among CDKNet.Com, Inc., CDK Merger Corp.,
Miletos, and certain majority shareholders of Miletos. Under the Merger
Agreement, we also issued an additional 250,000 shares of common stock to
certain former holders of Miletos stock which are placed in escrow. If we have
liability for a breach of representation or warranties under the Merger
Agreement, the shares could be released to those holders, or, if at the end of
one year we do not have any indemnification liabilities, the shares will be
returned and cancelled. The same former Miletos shareholders also placed
1,155,000 of the 16,090,577 shares issued in the Merger in escrow to cover any
indemnification liabilities they may have. Our shares of common stock were
issued in reliance upon Section 4(2) or 4(6) of the Securities Act of 1933 to 36
stockholders of Miletos, all of which represented that they were accredited
investors and 8 of which are the majority holders of Miletos who are affiliates
of Andreas Typaldos. As a result of the Merger, Miletos merged into CDK Merger
Corp., which changed its name to Arkados, Inc.
Prior to the Merger, on March 23, 2004, Miletos acquired the assets and business
of Enikia, LLC, a Delaware limited liability company at a public foreclosure
sale, including the intellectual property upon which Arkados' development
efforts are based. Miletos was formed in February 2004, by control affiliates of
Enikia. These control affiliates were both secured creditors of Enikia and
holders of the controlling equity interest in Enikia. They contributed a secured
promissory note to Miletos in the initial principal amount of $9,221,000, dated
June 1, 2002. The promissory note also represents obligations to the lender for
additional advances to Enikia by the control group which brought the aggregate
principal due at the time of foreclosure to approximately $11,100,000. At the
foreclosure sale, Miletos forgave $4,000,000 of the secured obligation in
exchange for substantially all of the assets of Enikia. Since CDK and
Subsidiaries prior to the Merger had no meaningful operations, the Merger was
treated as a reorganization of
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Arkados via a reverse merger with CDKNet.com, Inc. for accounting purposes. The
assets acquired at the foreclosure sale and certain liabilities assumed by CDK
were recorded as historical cost.
The 16,090,577 shares issued as part of the Merger to the former Miletos holders
represented approximately 73% of our total outstanding stock.
We plan to continue to use the assets of Arkados for the development and planned
production and sale of semiconductor solutions for powerline networks.
Item 5.01 Changes in Control of the Registrant
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As part of the Merger and related transactions, Andrew Schenker and Anthony
Bonomo resigned as officers and directors and the following were appointed by
Steven Horowitz to serve as directors effective upon compliance with the filing
and mailing requirements of Schedule 14F-1 (the "Appointees"):
o Oleg Logvinov
o William R. Carson
o Andrew S. Prince
o Gennaro Vendome
Mr. Horowitz will resign as a director when the above appointments are
effective.
The following table sets forth certain information known to us about the
beneficial ownership of our Common Stock, as of August 31, 2004, by each
beneficial owner of more than five percent of the Common Stock. Except as
otherwise indicated, each person has sole voting and investment power with
respect to all shares shown as beneficially owned, subject to community property
laws where applicable.
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Amount and Nature of Percent of Class
Name and Address of Beneficial Owner Beneficial Ownership (1)
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Andreas Typaldos 12,297,443(2) 53%
44 West 77th Street
New York, NY
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Norris McLaughlin & Marcus, P.A. 1,876,328(3) 8%
721 Route 202-206
Bridgewater, NJ 08807
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(1) Based upon 23,012,266 shares of Common Stock outstanding as of August 31,
2004 (not including 250,000 shares issued in escrow) and with respect to
each stockholder, the number of shares which would be outstanding upon the
exercise by such stockholder of outstanding rights to acquire stock,
either upon exercise of outstanding options, warrants or conversion of
other securities exercisable within 60 days.
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(2) Includes (i) 750,000 shares owned by Renee Typaldos, Mr. Typaldos' wife;
(ii) 5,390,167 shares owned by the Andreas Typaldos Family Limited
Partnership, of which Mrs. Typaldos is the sole general partner; (iii)
2,000,000 shares owned by Patras Holdings LLC, a limited liability company
of which Mr. Typaldos is the managing member; (iv) 750,000 shares held by
each of Mr. Typaldos' children; and (v) 1,407,276 shares which may be
purchased from Norris McLaughlin & Marcus, P.A. for $705,000 on or before
May 24, 2005.
(3) Of which 1,407,276 are subject to an option described in note 2.
We believe that all persons have full voting and investment power with respect
to the shares. Under the rules of the Commission, a person (or group of persons)
is deemed to be a "beneficial owner" of a security if he or she, directly or
indirectly, has or shares a power to vote or to direct the voting of such
security. Accordingly, more than one person may be deemed to be a beneficial
owner of the same security. A person is also deemed to be a beneficial owner of
any security, which the person has the right to acquire within 60 days, such as
convertible notes, warrants or options to purchase shares of Common Stock.
Beneficial ownership is determined in accordance with the rules of the
Commission generally includes voting or investment power with respect to
securities. In accordance with Commission rules, shares of Common Stock that may
be acquired upon exercise of stock options or warrants which are currently
exercisable or which become exercisable within 60 days of the date of the table
are deemed beneficially owned by the optionees. Subject to community property
laws, where applicable, the persons or entities named in the table above have
sole voting and investment power with respect to all shares of the Common Stock
indicated as beneficially owned by them.
As described above, following the Effective Date of the Merger, four directors
were appointed (subject to compliance with Section 14f-1) and several officers
were appointed. The new directors will serve as directors through the current
term until they are re-elected or new directors are elected pursuant to the
Company's certificate of incorporation, by-laws and applicable law.
The following tables set forth information regarding the Company's current
executive officers director Appointees and sole director:
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Name Age Position
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Oleg Logvinov 41 President, CEO and Appointed Director
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Kirk Warshaw 46 CFO, Treasurer and Secretary
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William H. Carson 57 Appointed Director
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Andrew S. Prince ,MBA, JD 60 Appointed Director
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Gennaro Vendome 57 Appointed Director
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Steven A. Horowitz 45 Director
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Oleg Logvinov was appointed President, CEO and a director (subject to compliance
with Rule 14f-1) on August 12, 2004 and has served as President of Arkados since
the Merger. Prior to the Merger, from February, 2000 to March, 2004, Mr.
Logvinov served as Vice President of Engineering and later as President of
Enikia LLC. From March, 1998 to February, 2000, he
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served as Senior Director of Product Development and System Engineering at
OpenCon Systems Inc., a telecommunications software service provider, and later
CyberPath Inc., a venture-funded VoDSL Gateway company spun off by OpenCon
Systems Inc. Prior to that, he held senior management positions at NITECH, INC
from1996 to 1998, and CEM, Inc from 1991 to 1996. Mr. Logvinov holds a masters
degree in electrical engineering from the Technical University of Ukraine (KPI).
He has also worked as a senior research scientist and later research team leader
at an R&D laboratory at the Technical University of Ukraine and the Ukraine
Department of Energy.
Kirk Warshaw, CPA was appointed CFO of Arkados in June 2004 and was appointed
our CFO, Treasurer and Secretary August 12, 2004. Mr. Warshaw started his career
at Deloitte Haskins & Sells (Deloitte & Touch) as a Senior Accountant.
Subsequently, Mr. Warshaw was employed in the banking industry, including a
position as the CFO of Amerifederal Savings Bank from 1987 to 1990 where he
supervised the accounting, retail branches, corporate services, consumer
lending, and data processing departments. He was directly responsible for asset
/ liability, and interest rate risk management; tax, budget, and insurance
functions; capital planning, regulatory compliance and financing activities.
From 1990 to 1991 he was the bank President and CEO where he resolved numerous
non-performing assets and operating problems, prepared business plans,
negotiated loan workout plans, and participated in the resolution and sale of
the bank. He has direct ownership interests and managerial roles with a variety
of businesses, including radio stations, an executive recruitment entity, and a
firm which provides personal financial planning services. In addition, he acts
as a financial and business consultant to several small businesses. Mr. Warshaw,
a Certified Public Accountant since 1982, holds a BS in accounting and marketing
from Lehigh University.
William H. Carson was appointed a director (subject to compliance with Rule
14f-1) on June 1, 2004. Mr. Carson is currently serving as SVP, Regulatory,
Technical & Governmental Affairs of Galderma Laboratories, a pharmaceutical
joint venture of Nestle and L'Oreal. Mr. Carson has also served as president of
Biotherm Polymers and from 1996 through 1999 he also held the position of VP
Scientific Affairs of Bayer Consumer Care.
Andrew S. Prince, MBA, JD, was appointed a director (subject to compliance with
Rule 14f-1) on June 1, 2004. Mr. Prince has been Chief Executive Officer and
President of public and private companies and Managing Member and Chief
Operating Officer of a private equity fund, Managing Member of investment
banking and consulting firms and a Senior Government Official. Mr. Prince has
had a distinguished career assisting large and small organizations develop and
implement their business development strategies. He has extensive background in
all facets of operations in both small and large organizations as well as
experience in corporate merger and acquisition transactions, strategic planning
and management development activities. Mr. Prince has helped healthy companies
to expand and troubled companies to overcome their problems. He has provided
senior executive leadership and vision to, and as a member of, various boards,
development and implementation of strategic business plans, and been responsible
for the management of operations. Mr. Prince has focused on elements of
corporate expansion including operating efficiencies, margin improvements,
tactical planning, market growth and development, infrastructure analysis and
business process reengineering. He has been involved in and responsible for
numerous mergers and acquisitions, strategic relationships and other joint
ventures, and financing events, including their financial and strategic
analysis, structuring and negotiations. Mr. Prince has served as Deputy
Assistant Secretary of the Navy.
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He was responsible for the Defense Department's worldwide sea-lift logistics
operations and the other operations of the Military Sealift Command. Among his
accomplishments were, rationalizing logistics activities resulting in
significant cost savings, directing the Navy's first outsourcing program,
developing new support programs and negotiating leases and acquisitions of
ships. He is a retired Naval Reserve Captain whose responsibilities included two
years as the Commanding Officer of a Submarine Support facility. On active duty,
his tours included service aboard the USS Nautilus. Mr. Prince also was an
attorney with a major Wall Street law firm and is admitted to practice before
New York state courts, Federal courts, and the United States Supreme Court. Mr.
Prince is a graduate of the United States Naval Academy, earning his B.S. degree
in Mathematics and Physics, the United States Naval Submarine School and the
Naval Nuclear Power Program. He received, concurrently, his J.D. and M.B.A.
degrees from the Harvard Law School and Harvard Business School respectively.
Gennaro Vendome was appointed a director (subject to compliance with Rule 14f-1)
on June 1, 2004. He is a founder of AXS-One, Inc. and has been a Vice President
and director since AXS-One's formation in 1978. In April 2002, Mr. Vendome was
named Executive Vice President of Sales, Marketing and Consulting for North
America. Mr. Vendome was Treasurer of AXS-One from 1981 until 1991 and Secretary
of the Company from 1982 until 1991. AXS-One designs, markets and supports
n-tier, Internet-enabled client/server, e-business, financial, workflow, desktop
data access and storage solutions and email compliance software for global 2000
businesses, and scheduling and time and expense solutions for professional
services organizations. AXS-One also offers consulting, implementation, training
and maintenance services in support of its customers' use of its software
products.
Steven A. Horowitz served as Chairman of the Board of Directors and Chief
Executive Officer since May 1998 until August 12, 2004. Mr. Horowitz served as
our Secretary from May 1998 to May, 2002 and became Secretary again in October,
2002 until Mr. Warshaw was appointed Secretary August 12, 2004. He served as our
Chief Financial Officer from October 1999 until 2001. Additionally, Mr. Horowitz
has served as the managing member of Creative Technology and CDKnet, LLC since
October, 1998 and November, 1998, respectively. Mr. Horowitz holds various
titles in companies in which Diversified has invested in including, CEO of
Eascent and CEO of Optical. On October 22, 2002 he became President, CEO and
Chairman of the Board of Genio Group, Inc. (formerly National Management
Consulting, Inc.). He resigned as an officer of Genio in September 2003 and as a
director in January 2004. Since April 1, 2000, he has served as a partner in
Moritt, Hock, Hamroff & Horowitz, LLP, a Garden City, New York-based law firm.
From October 1, 1991 to March 2000, he was the founding principal of Horowitz,
Mencher, Klosowski, & Nestler, P.C., a Garden City, New York-based law firm. Mr.
Horowitz holds a degree from Hofstra University School of Law and a Master of
Business Administration degree in Accounting from Hofstra University School of
Business. Mr. Horowitz is an Adjunct Professor of Law at Hofstra University
School of Law. In 1986 and 1987, Mr. Horowitz was Director of Taxes for Symbol
Technologies, Inc., a New York Stock Exchange corporation. Mr. Horowitz is a
member of the American Bar Association and the New York State Bar Association.
None of the Appointees or officers has been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors) during the last five
years nor have they been, or are subject to a judgment, decree and final order
enjoining future violations of, or prohibiting
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activities subject to, federal or state securities laws, as a result of being a
party during the last five years to a civil proceeding of a judicial or
administrative body of competent jurisdiction.
The information set forth in "Item 2.01 Completion of Acquisition or Disposition
of Assets" is incorporated herein by reference.
Item 5.03 Amendment to Article of Incorporation or Bylaws; Change in Fiscal Year
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Following the Merger, by resolution of our sole director, we changed our fiscal
year end from June 30 to May 31. This change resulted in our filing a Form
10-KSB with audited financial statement including the assets, liabilities and
operations of the acquired business assets before the Form 10-KSB report for the
year ended June 30, 2004 would have been due.
Item 9.01 Financial Statements and Exhibits
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(a) Financial Statements.
The financial statements for the business acquired describe din Item
2.01 of this Report were filed as part of our Form 10-KSB report for the year
ended May 31, 2004 and are incorporated herein by reference. Pursuant to
Regulation S-X210.3-05(b)(4)(B)(iii) and (iv), separate financial statements of
the acquired business are not required because the balance sheet and operating
results of the acquired business were included in our audited financial
statement for the required periods.
(c) Exhibits.
All of the following exhibits are incorporated by reference to the
corresponding exhibit filed with our Form 10-KSB Report for the year ended May
31, 2004:
2.1 Agreement and Plan of Merger dated as of May 7, 2004 between
CDKnet.com, Inc., CDK Merger Corp., Miletos, Inc. and
Andreas Typaldos, as Representative of Certain Stockholders
of Miletos, Inc.
2.2 Amendment dated May 21, 2004 to the Agreement and Plan of
Merger dated as of May 7, 2004 between CDKnet.com, Inc., CDK
merger Corp., Miletos, Inc. and Andreas Typaldos, as
Representative of Certain Stockholders of Miletos, Inc.
9.1 Shareholders and Voting Agreement dated as of May 21, 2004
by and among CDKnet.com, Inc. and several stockholders.
10.16 Consulting Agreement dated as of May 21, 2004 between
CDKnet.Com, Inc. and Kirk M. Warshaw.
10.17.1 Registration Rights Agreement dated as of May 21, 2004
between CDKnet.Com, Inc. and several Typaldos related
stockholders.
10.17.2 Registration Rights Agreement dated as of May 21, 2004
between
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CDKnet.Com, Inc. and several former Series A Preferred
stockholders.
10.18 Consulting Agreement dated as of May 21, 2004 between
CDKnet.Com, Inc. and Andreas Typaldos.
10.19 Employment Agreement dated as of May 23, 2004 between
CDKnet.Com, Inc. and Oleg Logvinov.
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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.
CDKNET.COM, INC.
By: /s/ Oleg Logvinov
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Oleg Logvinov, President
Date: October 1, 2004
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