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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 5, 2000
CT HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-08718 75-2432011
(STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION
INCORPORATION) NUMBER)
3811 TURTLE CREEK BOULEVARD, SUITE 770, DALLAS, TEXAS 75219
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (214) 520-9292
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ITEM 5. OTHER EVENTS
On May 5, 2000, the registrant, CT Holdings, Inc. (the "Company"),
completed a previously announced transaction whereby it acquired a significant
minority interest in River Logic, Inc., a Delaware corporation formerly known as
iNetze.com, Inc. The Company acquired an aggregate of approximately 5.9% of the
outstanding shares of capital stock of River Logic, Inc. ("River Logic") from
Robert C. Whitehair, Tim Collins, and F. Shanahan McAdoo in exchange for 333,333
shares of the Company's common stock. The Company also acquired shares of Series
A Convertible Preferred Stock from River Logic in exchange for the contribution
by a wholly-owned subsidiary of the Company of certain assets (the "ESRN
Network"), as described below. The acquired shares of Series A Convertible
Preferred Stock are convertible into shares of common stock that, upon
conversion, would represent approximately 13.1% of the outstanding shares of
capital stock of River Logic as of May 5, 2000. In connection with the
transaction, the Company, River Logic and certain of River Logic's stockholders
entered into a Stockholders Agreement providing for, among other things,
restrictions on the transferability of River Logic securities, rights of first
refusal and co-sale with respect to River Logic securities, and registration
rights with respect to River Logic securities. The Stockholders Agreement also
provides the Company with the right to appoint one member of River Logic's Board
of Directors so long as the Company continues to own at least 10% of River
Logic's capital stock on a fully diluted basis.
In connection with the transaction, the Company also made two $300,000
bridge loans to River Logic that together are convertible into 800,000 shares,
in the aggregate, of common stock that, upon conversion, would represent
approximately 3.8% of the outstanding capital stock of River Logic as of May 5,
2000. Each of the bridge loans (i) bears interest at a rate of 12% per annum
through its first anniversary and at one percent above the prime rate per annum
thereafter, (ii) is secured by certain assets of River Logic, (iii) is payable
upon the Company's demand and (iv) is prepayable by River Logic commencing on
its third anniversary date. As a result of the transaction, the Company
possesses approximately 19% (22.2% in the event the bridge loans are converted
in full) of the voting power with respect to River Logic.
The ESRN Network consists of the EBSCO School Resource Network, an
educational network catering to kindergarten through 12th grade ("K-12"). The
ESRN Network is designed to support school administrators, teachers, students
and parents by providing them with a comprehensive set of tools and resources
targeting their specific needs and is comprised of learning applications that
integrate EBSCO Industries' database of content relating to K-12. The ESRN
Network was acquired by a wholly-owned subsidiary of the Company from EBSCO
Industries in connection with the transaction in exchange for 666,667 shares of
the Company's common stock.
The consideration paid by the Company in connection with the transaction
was determined on the basis of arm's-length negotiations between the parties. In
accordance with the terms of the transaction agreements, CT intends to file a
resale registration statement relating to the shares of its common stock issued
in connection with the transaction within 90 days of May 5, 2000. Although the
Company also received an option to purchase certain additional shares of capital
stock of River Logic, the Company elected not to exercise this option prior to
its expiration.
River Logic, headquartered in Beverly, Massachusetts, creates and
operates integrated decision support networks for industries such as K-12
Education. In addition to K-12 education, River Logic has several other
industry-specific networks in development.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(c) Exhibits
*2.1 Asset Purchase Agreement dated as of May 5, 2000 by and between EBSCO
CASIAS, Inc., iNetze.com, Inc., ESRN Acquisition, LLC and the Company.
This exhibit contains a list of schedules to the exhibit, all of which
have been omitted. Upon request of the Securities and Exchange
Commission, the Company will furnish a copy to it supplementally.
*2.2 Asset Contribution Agreement dated as of May 5, 2000 by and between
iNetze.com, Inc., ESRN Acquisition, LLC , the Company and the
stockholders set forth on the signature pages attached hereto. This
exhibit contains a list of schedules to the exhibit, all of which have
been omitted. Upon request of the Securities and Exchange Commission, the
Company will furnish a copy to it supplementally.
*2.3 Stock Purchase Agreement dated as of May 5, 2000 by and between the
Company, Tim Collins, F. Shanahan McAdoo and Robert C. Whitehair.
*99.1 Press Release issued by the Company on May 9, 2000.
* Filed herewith.
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SIGNATURE
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, thereunto duly authorized.
CT Holdings, Inc.
(Registrant)
By: /s/ STEVEN B. SOLOMON
--------------------------------------
Steven B. Solomon
Chief Executive Officer
Dated as of June 12, 2000
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EXHIBIT NO. DESCRIPTION
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<S> <C>
*2.1 Asset Purchase Agreement dated as of May 5, 2000 by and
between EBSCO CASIAS, Inc., iNetze.com, Inc., ESRN
Acquisition, LLC and the Company. This exhibit contains a list
of schedules to the exhibit, all of which have been omitted.
Upon request of the Securities and Exchange Commission, the
Company will furnish a copy to it supplementally.
*2.2 Asset Contribution Agreement dated as of May 5, 2000 by and
between iNetze.com, Inc., ESRN Acquisition, LLC , the Company
and the stockholders set forth on the signature pages attached
hereto. This exhibit contains a list of schedules to the
exhibit, all of which have been omitted. Upon request of the
Securities and Exchange Commission, the Company will furnish a
copy to it supplementally.
*2.3 Stock Purchase Agreement dated as of May 5, 2000 by and
between the Company, Tim Collins, F. Shanahan McAdoo and
Robert C. Whitehair.
*99.1 Press Release issued by the Company on May 9, 2000.
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* Filed herewith.
