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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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): July 18, 2000
ALLOY ONLINE, INC.
(Exact name of registrant as specified in its charter)
000-26023
(Commission
File Number)
Delaware 04-3310676
(State or other (IRS Employer
jurisdiction of incorporation) Identification No.)
151 WEST 26TH STREET, 11TH FLOOR
NEW YORK, NY 10001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 244-4307
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 18, 2000, Alloy Online, Inc. ("Alloy") completed an acquisition of all
of the outstanding capital stock of Kubic Marketing, Inc. ("Kubic"), a Delaware
corporation with a principal place of business in San Luis Obispo, California.
The acquisition was effected pursuant to an Agreement and Plan of Reorganization
dated as of July 17, 2000, (the "Reorganization Agreement") by and between
Alloy, Alloy Acquisition Sub, Inc., a Delaware corporation ("Acquisition Sub")
and a wholly owned subsidiary of Alloy, Kubic and SWI Holdings LLC, a Delaware
limited liability company and the sole stockholder of Kubic (the "Stockholder"),
pursuant to which Acquisition Sub was merged with and into Kubic (the "Merger")
with Kubic continuing as the surviving corporation and a wholly-owned subsidiary
of Alloy. The Merger is intended to qualify as a tax-free reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended,
and will be accounted for as a "purchase."
In connection with the Merger, Alloy issued to the Stockholder (i) 3,267,981
shares of Alloy's common stock, $.01 par value per share, and (ii) a warrant to
purchase shares of Alloy's restricted common stock, $.01 par value per share, in
an aggregate amount, if any, as determined pursuant to the provisions of
warrant; provided that 403,090 of the shares will be subject to an escrow for a
period of up to one year (which one-year period could be extended if any claims
are made) to satisfy the indemnification obligations of the Stockholder that run
in favor of Alloy and its affiliates and 141,872 shares are being held in escrow
pending final determination of certain financial results of Kubic prior to
consummation of the Merger. The Stockholder agreed to execute a lock-up
agreement that imposes certain limitations on the Stockholder's ability to sell
or otherwise transfer such shares. Alloy agreed to file a registration statement
on Form S-3 on or prior to August 17, 2000, pursuant to which it would register
for resale all of the shares issued to the Stockholder pursuant to the
Reorganization Agreement other than the shares being held in escrow. The shares
released from escrow, if any, and the shares issuable upon exercise of the
warrant, if any, subsequently will be registrable upon demand of the
Stockholder, subject to certain limitations. In addition, in connection with
obtaining the consent to the Merger of the lenders to Kubic and the
Stockholder's other subsidiaries, Alloy paid $10,000,000 in cash from its
existing cash reserves to such lenders to retire certain debt obligations of
Kubic and the Stockholder agreed to sell certain of the shares of Alloy common
stock received in the Merger over the four calendar quarters following
effectiveness of the Form S-3 in order to retire additional debt obligations.
Kubic is the holding company for its wholly-owned subsidiary, Phase Three, Inc.
(which does business as CCS), which is one of the largest mail order catalog and
Internet marketers of skateboards, snowboards and related apparel, equipment and
accessories. CCS is also one of the largest mail order catalogs serving the
Generation Y skate and snowboard market with a database of over one million
buyers and requesters. In addition, CCS reaches the extreme-sport oriented
Generation Y boys through its website which it promotes in its catalogs.
The description contained herein of the transaction is qualified in its entirety
by reference to the Reorganization Agreement (Exhibit 2.1), Warrant to Purchase
Shares of Common Stock of Alloy Online, Inc. (Exhibit 4.1), Investment
Representation and Lockup Agreement (Exhibit 99.1), Amendment to Loan and
Security Agreement (Exhibit 99.2) and press release (Exhibit 99.3), copies of
which are attached hereto and incorporated herein by reference.
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This report may contain forward-looking statements which reflect Alloy's current
judgment on certain issues. Because such statements apply to future events, they
are subject to risks and uncertainties that could cause the actual results to
differ materially. Important factors which could cause actual results to differ
materially are described in Alloy's Annual Report on Form 10-K for the year
ended January 31, 2000 and the press release filed as Exhibit 99.3 hereto.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial statements of business acquired.
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Not filed herewith; to be filed by amendment. Pursuant to Item
7(a)(4) of Form 8-K, the Registrant hereby undertakes to file such
information as soon as it is available but no later than October 3,
2000.
(b) Pro forma financial information.
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Not filed herewith; to be filed by amendment. Pursuant to Item
7(a)(4) of Form 8-K, the Registrant hereby undertakes to file such
information as soon as it is available but no later than October 3,
2000.
(c) Exhibits.
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2.1 Agreement and Plan of Reorganization dated as of July 17,
2000, by and between Alloy Online, Inc., Alloy Acquisition
Sub, Inc., Kubic Marketing, Inc. and SWI Holdings, LLC.
4.1 Warrant to Purchase Shares of Common Stock of Alloy Online,
Inc. dated as of July 18, 2000 between Alloy Online, Inc. and
SWI Holdings, LLC.
99.1 Investment Representation and Lockup Agreement dated as July
18, 2000, by and between Alloy Online, Inc. and SWI Holdings,
LLC.
99.2 Amendment to Loan and Security Agreement, dated as of July 18,
2000, by and among Phase Three, Inc., the financial
institutions party thereto and the other parties named
therein.
99.3 Alloy's Press Release dated July 19, 2000.
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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.
Date: August 2, 2000 ALLOY ONLINE, INC.
(Registrant)
By: /s/ Matthew C. Diamond
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Matthew C. Diamond
Chief Executive Officer
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EXHIBIT INDEX
2.1 Agreement and Plan of Reorganization dated as of July 17, 2000, by and
between Alloy Online, Inc., Alloy Acquisition Sub, Inc., Kubic Marketing,
Inc. and SWI Holdings LLC.
4.1 Warrant to Purchase Shares of Common Stock of Alloy Online, Inc. dated
as of July 18, 2000 between Alloy Online, Inc. and SWI Holdings, LLC.
99.1 Investment Representation and Lockup Agreement dated as July 18, 2000,
by and between Alloy Online, Inc. and SWI Holdings, LLC.
99.2 Amendment to Loan and Security Agreement, dated as of July 18, 2000, by
and among Phase Three, Inc., the financial institutions party thereto and
the other parties named therein.
99.3 Alloy's Press Release dated July 19, 2000.
