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): July 3, 2008
iDNA,
Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
(State
or
Other Jurisdiction of Incorporation)
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1-11601
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34-1816760
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(Commission
File Number)
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(IRS
Employer Identification No.)
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415
Madison Avenue, 7th
Floor New
York, New York
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10017
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(212)
644-1400
(Registrant’s
Telephone Number, Including Area Code)
(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
Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive Agreement.
Effective
as of July 3, 2008, iDNA, Inc. (“iDNA”)
entered
into a Reduction of Purchase Price Agreement (the “Agreement”) with Steven
Campus, president of the Campus Corporations (defined below), the Campus Family
2000 Trust
(the
“Family Trust”)
and
the
Trust Established Under the Will of Nancy Campus (the “Shelter Trust” and,
collectively with the Family Trust, the “Trusts” and each a “Trust”). (The
Trusts and Steven Campus are herein referred to collectively as the
“Stockholders” and each as a “Stockholder”).
As
previously reported, pursuant to and as provided in that certain Stock Purchase
Agreement dated July 31, 2003 between iDNA and the Stockholders, iDNA acquired
from the Stockholders all of the issued and outstanding shares of capital stock
of each of Campus
Group Companies, Inc. (“CGCI”),
Multi-Video Services,
Inc.
(“Multi-Video”),
Interactive Conferencing Network, Inc.
(“Interactive”)
and
Audience Response Systems, Inc. (“ARSI” and,
collectively with CGCI, Multi-Video, Interactive and ARSI, the “Campus
Corporations”).
In
consideration for the shares of the Campus Corporations so acquired, iDNA (i)
made a cash payment to the Stockholders and (ii) issued to the Stockholders
certain promissory notes in an aggregate principal amount of $9.9 million and
a
convertible promissory note in the principal amount of $2.8 million
(collectively, the “Promissory Notes”) (the cash amount and Promissory Notes
collectively, the “Purchase Price”). At July 2, 2008, iDNA had outstanding
principal obligations under the terms of the Promissory Notes of $12.1 million
and accrued interest of $156,000.
Pursuant
to the Agreement, iDNA and the Stockholders agreed, among other matters, that
the Purchase Price is reduced to a remaining balance of three hundred
seventy-five thousand dollars ($375,000) (the “Purchase Price Balance”). The
parties further agreed that, inasmuch as the Promissory Notes were intended
to
represent iDNA’s obligation to pay the unpaid portion of the Purchase Price, the
aggregate outstanding amount of the Promissory Notes is reduced to an amount
equal to the Purchase Price Balance. The Promissory Notes were modified and
amended so that the outstanding principal amounts due thereunder were reduced
to
an aggregate of $375,000. (The Promissory Notes, as modified and amended
pursuant to the Agreement, are hereinafter referred to as the “Amended
Promissory Notes.”)
Furthermore,
pursuant to the Agreement, on or about July 14, 2008 the Stockholders shall
surrender and deliver to iDNA each and all of the Amended Promissory Notes,
marked cancelled, and upon receipt of such Amended Promissory Notes, iDNA shall,
in full payment, discharge and satisfaction of the Amended Promissory Notes,
issue to the Stockholders an aggregate of two million five hundred thousand
(2,500,000) shares of iDNA’s common stock, $0.05 par value per share (the
“Issued Shares”), such Issued Shares to be allocated proportionally among the
Stockholders. iDNA and the Stockholders agree that upon the issuance of the
Issued Shares to the Stockholders, the Purchase Price Balance shall be paid,
discharged and satisfied in full, and no additional amount (whether pursuant
to
the Promissory Notes or otherwise) shall be payable by iDNA on account of or
with respect to the Purchase Price.
In
addition, subject to the terms and conditions set forth in the Agreement, iDNA
(i) assumed certain obligations to redeem or repurchase from the Stockholders
their Issued Shares and (ii) granted to the Stockholders certain rights to
sell
(or “put”) the Issued Shares to iDNA. iDNA is required to semi-annually offer to
redeem certain Issued Shares from the Stockholders at the rate of $2.00 per
share for a maximum total redemption payment equal
to
the excess
(if any)
of certain minimum operating cash flow thresholds of the Campus Corporations
for
the period from August 1, 2008 through July 31, 2013. At any time, the
Stockholders are free to (i) accept or decline iDNA’s offer to redeem or
repurchase the Issued Shares and (ii) sell,
redeem, transfer or otherwise dispose of the Issued Shares to third parties.
(All shares redeemed by iDNA, or sold, transferred or otherwise disposed of
to
third parties are hereinafter referred to as “Excluded Shares”.)
Pursuant
to the Agreement, iDNA also granted to the Stockholders the right, subject
to
certain criteria, to sell (or “put”) to iDNA, and require iDNA to purchase from
the Stockholders, any or all of the Issued Shares
(exclusive of all Excluded Shares) at the rate of $2.00 per share during
the period October 31, 2013 through November 15, 2013 (the “Put
Right”).
However. the
Put
Right shall not be exercisable if one or more of the Stockholders shall have
received (or be deemed to have received) aggregate consideration of at least
five million dollars ($5,000,000) on account of or with respect to the sale,
transfer, redemption or other disposition of some or all of the Issued Shares.
In
order
to secure its obligations to the Stockholders under the Agreement, iDNA agreed
(i) to pledged to the Stockholders all of iDNA’s right, title and interest in
and to all of the capital stock of the Campus Corporations held by iDNA and
(ii)
to cause the Campus Corporations to guaranty such obligations, with such
guaranty to be secured by the assets of the Campus Corporations.
In
addition, pursuant to the Agreement, Mr. Campus, the Campus Corporations and
iDNA are entering into an employment agreement (the “Employment Agreement”)
under which Mr. Campus shall serve as President of the Campus Corporations
until
the
earliest to occur of (i) the redemption of all Issued Shares (exclusive of
any
Excluded Shares) or (ii) the lapse of the Put Right. Mr. Campus is entitled
to
base compensation of $100,000 per year and standard employment benefits pursuant
to the Campus Corporation’s employment benefits program offered to all personnel
from time-to-time.
Each
of
the Agreement and the related Employment Agreement are attached as exhibits
(each an “Exhibit,”
and,
collectively, the “Exhibits”)
to
this Current Report on Form 8-K (this “Form
8-K”).
The
foregoing descriptions of the Exhibits are merely summaries, and are not
intended to be complete; and the full text of each Exhibit is incorporated
herein by reference.
Item
3.02 Unregistered Sales of Equity Securities.
Pursuant
to, and subject to the terms of, the Agreement, iDNA will issue to the
Stockholders the Issued Shares, as described in Item 1.01 of this Form 8-K
(such
description is incorporated by reference into this Item 3.02 in its entirety).
iDNA will receive no additional offering proceeds in connection with the
issuance of the Issued Shares, beyond cancellation of the remaining aggregate
$375,000 principal amount due to the Stockholders under the Amended Promissory
Notes.
There
are no underwriting discounts or commissions that will be incurred by iDNA
in
connection with the issuance of the Issued Shares. The issuance of the Issued
Shares is exempt from registration under the Securities Act of 1933, as amended
(the “Securities
Act”)
pursuant to Section 4(2) thereof, given the status of each of the Stockholders
as an “accredited investor” (as defined in Regulation D promulgated under the
Securities Act (“Regulation
D”)).
Item 8.01
Other Events.
On
July
15, 2008, iDNA issued a press release announcing
the closing of the Agreement.
A copy
of the press release is furnished as Exhibit 99.1 to this Form 8-K.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
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No.
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Description
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10.1
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Form
of Reduction of Purchase Price Agreement, dated as of July 3, 2008,
by and
between iDNA, Inc., Steven Campus, the Campus Family 2000 Trust and
the
Trust Established Under the Will of Nancy Campus.
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10.2
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Form
of Employment Agreement, dated as of August1, 2008, by and among
Audience
Response Systems, Inc., the Campus Group Companies, Inc., iDNA, Inc.
and
Steven Campus.
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99.1
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Press
Release dated July 15, 2008 issued by iDNA,
Inc.
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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.
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iDNA,
INC.
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Date:
July 15, 2008
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By:
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/s/ Robert
V. Cuddihy, Jr.
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Name:
Robert V. Cuddihy, Jr.
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Title:
Chief Financial Officer, Secretary and
Treasurer
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EXHIBIT
INDEX
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No.
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Description
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10.1
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Form
of Reduction of Purchase Price Agreement, dated as of July 3, 2008,
by and
between iDNA, Inc., Steven Campus, the Campus Family 2000 Trust and
the
Trust Established Under the Will of Nancy Campus.
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10.2
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Form
of Employment Agreement, dated as of August1, 2008, by and among
Audience
Response Systems, Inc., the Campus Group Companies, Inc., iDNA, Inc.
and
Steven Campus.
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99.1
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Press
Release dated July 15, 2008 issued by iDNA,
Inc.
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