SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A (2)
CURRENT REPORT
(Mark One)
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): March 22, 2002
Household Direct, Inc.
(Name of Small Business Issuer in its charter)
Delaware 51-0388634
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
HOUSEHOLD DIRECT, INC.
3 Glen Road
SANDY HOOK, CONNECTICUT 06482
(Address of Principal Executive Offices)
(203) 426-2312
(Issuer's Telephone Number Including Area Code)
ITEM 2 - ACQUISITION OR DISPOSITION OF ASSETS On December 17, 2001, the Company
announced the acquisition of Eqtima LLC. Business Description Eqtima is a
leading supplier of metrics-based Employee Relationship Management (ERM)
systems, specifically targeted for contact centers (staff centers handling
customer support, telemarketing calls (inbound and outbound), technical support,
etc.). Eqtima's ERM suite (Value Agent) of products is designed to empower
agents, analyize employee behavior patterns, automate feedback, and lay the
groundwork for a performance-recognition business culture.
Eqtima's strategy for 2002 is to penetrate the mainstream Work Force management
market by redefining Work Force Management. Work Force Management is
historically been nothing more than Forecasting and Scheduling. This is a very
limited vision. Eqtima expands the vision to encompass the whole life cycle of
an agent's experience with the company. Beyond just forecasting and scheduling,
it includes agent development, virtual supervision, and recognition/reward. It
sets the stage for a performance-based culture.
Eqtima's markets include North America, Asia, Europe, South America, and Africa.
We currently have customers in Africa and North America with partnerships that
also include Asia.
FIRST AMENDMENT TO ACQUISITION AGREEMENT
THIS AMENDMENT is made effective as of the 20th day of March, 2002, by and among
HouseHold Direct, Inc., a Delaware corporation ("HHD"); Eqtima LLC, a Delaware
limited liability company ("Llcco"); Battle Creek Unlimited, Inc., a Michigan
nonprofit corporation ("BCU"); and Bryan Baker, Sandy Biggam, Chuck Heindel, Jim
Hall, Philip Samson, Tom Walsh, Tom Rocca, Brad Taylor, Joel Taylor, Thorsten
Belicke and Kimberly Polak (collectively referred to as the "Shareholders").
BACKGROUND
HHD, Llcco, BCU and the Shareholders entered into an Acquisition Agreement dated
December 13, 2001 pursuant to which HHD acquired all of the membership interests
in Llcco (the "Agreement") from the Shareholders. HHD, Llcco, BCU and the
Shareholders now wish to amend the Agreement as provided herein.
NOW, THEREFORE, in consideration of the foregoing and the terms and conditions
set forth below, the parties agree as follows:
TERMS AND CONDITIONS
1. Amendment. Section 13.(d) of the Agreement is hereby amended in its
entirety to read as follows:
"(d) The Shareholders shall have the right, exercisable (i) during the 365 day
period following the Closing to exchange all, but not less than all of the
shares of HHD Stock issued to them pursuant to the provisions of this
Agreement for 100% of the membership interests in Llcco in the event HHD
does not make any one of the advances described in subparagraph 13(b)
hereof, and (ii) during the 24-month period following the Closing, subject
to the provisions of applicable law, to exchange all, but not less than all
of the shares of HHD Stock issued to them pursuant to the provisions of
this Agreement for 100% of the membership interests in Llcco in the event
that HHD files a petition in bankruptcy, has filed against it any
involuntary petition in bankruptcy which is not discharged within 90 days
of filing, executes a general assignment for the benefit of creditors or
otherwise seeks protection of pursuant to Federal or State bankruptcy
statutes during such 24-month period. In the event that Shareholders
exchange shares as described above, HHD has the option to convert its prior
financial amount into a prorated membership interest in Llcco based on the
percentage of the total dollar amount transferred to Llcco of entire
$2,500,000. The working capital funds are scheduled to be received by Llcco
on 29 March 2002 for $150,000; $150,000 by 15 April 2002; and $200,000 by
30 May 2002. The remaining acquisition amounts are unscheduled but due
within 2002."
2. Budgetary Changes to Exhibit A. Taking into account the impact on sales,
revenue, and fulfillment due to the delays in funding, the revised budget
and forecast is attached.
3. The parties hereby agree to retain Southbridge Business resources on a
six-month period, with HHD responsible to pay the initial three-month
period at $15,000 per month, and Eqtima paying the second three months at
the same rate.
4. Construction. Unless otherwise defined herein, capitalized terms shall have
the meanings set forth in the Agreement. The terms of this Amendment amend
and modify the Agreement as if fully set forth in the Agreement. If there
is any conflict between the terms, conditions and obligations of this
Amendment and the Agreement, this Amendment's terms, conditions and
obligations shall control. All other provisions of the Agreement not
specifically modified by this Amendment are preserved.
5. Counterparts. This Amendment may be signed in any number of counterparts
with the same effect as if the signature on each such counterpart were upon
the same instrument. Each executed copy shall be deemed an executed
original for all purposes.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first above written.
HouseHold Direct, Inc.
By s/s John Folger
Chief Executive Officer
Eqtima LLC
By s/s Bryan Baker
Chief Executive Officer
The Shareholders
s/s Bryan Baker
s/s Sandy Biggam
s/s Chuck Heindel
s/s Jim Hall
s/s Philip Samson
s/s Tom Walsh
s/s Tom Rocca
s/s Brad Taylor
s/s Joel Taylor
s/s Thorsten Belicke
s/s Kimberly Polak
Battle Creek Unlimited, Inc.
By: s/s Bill Eichstaedt
President
Modifications to Exhibit B: Forecast and Budget
In Thousands
Eqtima 1 Qtr 2 Qtr 3Qtr 4Qtr
Proforma Profit and Loss 2002 2002 2002 2002
Revenue from Products 14 433 950 1,121
Service Revenue 1 43 95 112
Maintenance and Service Agreements -- -- -- 13
Interest on Deposits -- -- -- --
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Total Revenue 15 476 1,045 1,246
(Cost of Goods sold and Outsourcing) ( 2) ( 63) ( 138) ( 163)
Operating Expenses ( 338) ( 453) ( 629) ( 639)
Investment Interest Income (Expenses) -- -- -- --
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Income Before Tax ( 325) ( 40) 278 445
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Cumulative Income Before Tax ( 325) ( 364) ( 86) 358
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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.
March 20, 2002 /s/ John Folger
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Date President and
Chief Executive Officer