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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13E-3/A
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
(AMENDMENT NO. 5)
TECH SQUARED INC.
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(Name of the Issuer)
Digital River, Inc.
Joel A. Ronning
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(Name(s) of Person(s) Filing Statement)
COMMON STOCK, NO PAR VALUE
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(Title of Class of Securities)
878302108
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(CUSIP Number of Class of Securities)
Digital River, Inc.
Attention: Robert E. Strawman
9625 W. 76th Street, Suite 150
Eden Prairie, Minnesota 55344
(612) 830-9042
Joel A. Ronning
9625 W. 76th Street, Suite 150
Eden Prairie, Minnesota 55344
(612) 830-9042
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Persons(s) Filing Statement)
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COPIES TO:
Louis A. Goodman, Esq. Michael W. Schley, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP Larkin, Hoffman, Daly & Lindgren, Ltd.
One Beacon Street 7900 Xerxes Avenue South, Suite 1500
Boston, Massachusetts 02108 Bloomington, Minnesota 55431
(617) 573-4800 (612) 896-3800
Michael J. Sullivan
Cooley Godward LLP
One Maritime Plaza, 20th Floor
San Francisco, California 94111
(415) 693-2000
This statement is filed in connection with (check the appropriate box):
a. / / The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities
Exchange Act of 1934.
b. /X/ The filing of a registration statement under the Securities Act of 1933.
c. / / A tender offer.
d. / / None of the above.
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Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies. / /
Calculation of Filing Fee
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Transaction
Valuation Amount of Filing Fee
$69,147,482* $19,223**
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*Transaction Valuation has been calculated by using the total value of the
2,650,000 shares of Digital River, Inc. common stock, based on a price per
share of $26.09 determined in accordance with Rules 457(f) and (c) of the
Securities Act of 1933, as amended (the "1933 Act"), to be issued by
Digital River, Inc. to Tech Squared, Inc. in the transaction described
herein and in the Proxy Statement-Prospectus forming a part of
the Registration Statement incorporated herein by reference.
**Calculated in accordance with Section 6(b) of the 1933 Act.
/X/ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: $11,856 Filing party: Tech Squared Inc.
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Preliminary 14A
Form or registration no.: and Schedule 13E-3 Dated filed: August 10, 1999
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INTRODUCTION
This Amendment No. 5 (the "Final Amendment") amends and supplements the Rule
13e-3 Transaction Statement on Schedule 13E-3 (the "Transaction Statement")
which was originally filed with the Securities and Exchange Commission (the
"Commission") on August 10, 1999, and amended on October 14, 1999, October
29, 1999, November 5, 1999 and November 9, 1999 by Tech Squared Inc., a
Minnesota corporation ("Tech Squared"), Digital River, Inc., a Delaware
corporation ("Digital River"), MacUSA, Inc., a Minnesota corporation
("MacUSA") and Joel A. Ronning pursuant to Section 13(e) of the Securities
and Exchange Act of 1934, as amended (the "1934 Act"), and Rule 13e-3
thereunder, in connection with the voluntary dissolution of Tech Squared
pursuant to the Plan of Liquidation and Dissolution and the transactions
contemplated thereby. MacUSA has been merged into Tech Squared and Tech
Squared has been liquidated as of the date of this Final Amendment. The Final
Amendment is therefore filed only by Digital River and Joel A. Ronning.
The Transaction Statement was filed in connection with the filing by Digital
River of a Registration Statement on Form S-4, of which the proxy
statement-prospectus (the "Proxy Statement-Prospectus") formed a part,
declared effective by the Commission on November 9, 1999. The Proxy
Statement-Prospectus served as (1) the proxy statement of Tech Squared with
respect to the special meeting of Tech Squared shareholders held on December
10, 1999 (the "Special Meeting"), at which the Tech Squared shareholders
voted upon and approved the voluntary dissolution of Tech Squared pursuant to
the Plan of Liquidation and Dissolution and (2) the prospectus of Digital
River with respect to the issuance of Digital River shares to Tech Squared
and the distribution of such shares by Tech Squared to its shareholders
pursuant to the Plan of Liquidation and Dissolution.
This Final Amendment is being filed with the Securities and
Exchange commission pursuant to the requirements of Rule 13e-3(d)(3) promulgated
under the 1934 Act, to report the results of the Special Meeting. Except as
expressly set forth in this Final Amendment, all information in the Transaction
Statement remains unchanged.
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ITEM 16. ADDITIONAL INFORMATION.
Item 16 of this Schedule 13E-3 is hereby amended and
supplemented as follows.
The voluntary dissolution pursuant to the Plan of Liquidation and Dissolution
was approved by the shareholders of Tech Squared at the Special Meeting. Of
the 13,785,203 shares of Tech Squared's common stock outstanding on the
record date for the Special Meeting, 10,297,680 of such shares (approximately
75%) were represented in person or by proxy at the Special Meeting, and
9,992,839 of such shares (approximately 97%) voted in favor of the proposal
to approve the voluntary dissolution of Tech Squared pursuant to the Plan of
Liquidation and Dissolution. In accordance with the Plan of Liquidation and
Dissolution, the following transactions have been completed: (1) the sale of
Tech Squared's operating assets to Virtual Technology Corporation (d/b/a
Netdirect Corporation International) for a cash purchase price of
approximately $3,300,000; (2) the transfer to Digital River of the 3,000,000
shares of Digital River common stock held by Tech Squared and $1.2 million in
cash in exchange for 2,650,000 newly issued shares of Digital River common
stock; (3) the establishment of a liquidating trust, and the deposit into the
trust, of sufficient assets to provide for the payment of the actual and
potential liabilities of Tech Squared; and (4) the liquidation of Tech
Squared. In connection with the liquidation of Tech Squared, its shareholders
will receive a pro-rata distribution of its remaining assets and a pro-rata
interest in the liquidating trust. Any assets remaining in the liquidating
trust after all liabilities have been satisfied will be distributed to
shareholders on a pro-rata basis.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
Item 17 of this Schedule 13E-3 is hereby amended by adding
the following additional exhibits:
(d)(1) Exhibit F - Press Release issued by Tech Squared on
November 19, 1999.
(d)(2) Exhibit G - Press Release issued by Tech Squared on
December 10, 1999.
(d)(3) Exhibit H - Press Release issued by Tech Squared on
December 20, 1999.
(d)(4) Exhibit I - Press Release issued by Digital River on
December 20, 1999.
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SIGNATURES
After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: December 21, 1999 DIGITAL RIVER, INC.
/s/ Joel A. Ronning
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Name: Joel A. Ronning
Title: Chief Executive Officer
/s/ Joel A. Ronning
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Name: Joel A. Ronning
Title: Individually
Signature Page to Schedule 13e-3
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
A . . . . Excerpt from Digital River's Annual Report on Form 10-K filed on
March 3, 1999, for the fiscal year ended December 31, 1998*
B . . . . Excerpt from Digital River's Definitive Proxy Statement on Schedule
14A, filed on March 23, 1999*
C . . . . Materials used in the Fairness Opinion Presentation made by SG Cowen
Securities Corporation to the Board of Directors of Tech Squared on
July 11, 1999*
D . . . . Materials used in the Presentation made by Broadview International
LLC to the Board of Directors of Digital River on July 9, 1999*
E . . . . Registration Statement (incorporated by reference to the
Registration Statement filed by Digital River and declared
effective by the Commission on November 9, 1999)
F . . . . Press Release issued by Tech Squared on November 19, 1999.
G . . . . Press Release issued by Tech Squared on December 10, 1999.
H . . . . Press Release issued by Tech Squared on December 20, 1999.
I . . . . Press Release issued by Digital River on December 20, 1999.
* Previously filed.
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EXHIBIT F
FROM: FOR:
BlueFire Partners Tech Squared Inc.
1300 Fifth Street Towers, 150 S. 5th St. 6690 Shady Oak Rd.
Minneapolis, Minn. 55402 Eden Prairie, Minn. 55344
Contact - Tom Langenfeld 612-371-0000 Contact - Jeffrey F. Martin
612-832-5622
FOR IMMEDIATE RELEASE
TECH SQUARED SCHEDULES SHAREHOLDER MEETING
ON PROPOSED VOLUNTARY DISSOLUTION OF COMPANY
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MINNEAPOLIS, Nov. 19 - Tech Squared Inc. (OTC Bulletin Board:TSQD)
said today that it has mailed proxy materials to its shareholders to solicit
proxies for approval of the dissolution of Tech Squared pursuant to a plan of
voluntary liquidation and dissolution. A special meeting of Tech Squared
shareholders is scheduled for 8:30 a.m. CST Friday, Dec. 10, 1999, at The Hilton
Airport hotel, Bloomington, Minn.
Upon shareholder approval of the voluntary dissolution pursuant to the
plan of liquidation and dissolution, which has already been approved by the
board of directors, Tech Squared intends to complete the sale of its operating
assets for cash pursuant to a previously announced asset purchase agreement, and
to complete a tax-free reorganization with Digital River, Inc. (Nasdaq:DRIV) in
accordance with a previously announced acquisition agreement.
In the reorganization, Digital River will receive 3,000,000 shares of
its own common stock currently owned by a wholly-owned subsidiary of Tech
Squared plus $1,200,000 in cash from Tech Squared and, in exchange, will issue
2,650,000 shares of Digital River common stock to Tech Squared. Tech Squared
will be dissolved promptly after completion of this transaction.
Closing of the reorganization is subject to shareholder approval of
the voluntary dissolution, completion of the sale or other disposition of Tech
Squared's
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operating assets, the establishment of a liquidating trust to satisfy known or
contingent liabilities of Tech Squared, and other customary conditions. Tech
Squared currently intends to deposit a portion of the to-be-issued shares of
Digital River common stock into the liquidating trust to satisfy this
requirement. The remaining newly-issued shares of Digital River common stock,
which are expected to constitute substantially all of the assets of Tech
Squared, will then be distributed to Tech Squared shareholders on a pro-rata
basis.
Shareholders are urged to review the proxy statement-prospectus, filed
jointly with Digital River and mailed to Tech Squared shareholders on about Nov,
11, 1999. Shareholders who have not received the proxy statement-prospectus, or
desiring additional information, are urged to contact Georgeson Shareholder
Communications, Inc., at 1-800-223-2064, which Tech Squared has retained to
assist in the solicitation of proxies. Further information is also available in
Tech Squared's filings with the Securities and Exchange Commission which can be
accessed, on the Internet, at www.sec.gov.
Chuck Reese, president and chief executive officer of Tech Squared,
said, "We are pleased that our shareholders will now have a more effective means
to realize the benefit of their investment by becoming direct owners of Digital
River common stock."
As previously announced, Tech Squared has signed a definitive
agreement with Virtual Technology Corp. (OTC Bulletin Board:VTCO) under which
VTC will acquire substantially all of Tech Squared's operating assets for a cash
purchase price of approximately $3,000,000. The asset sale to VTC includes Tech
Squared's Net Direct, DTP Direct and distribution operations, along with various
trade and Internet domain names. Closing of the asset sale to Virtual
Technology is expected to occur shortly after shareholder approval of the
voluntary dissolution of Tech Squared.
Virtual Technology Corp. is a Minneapolis-based e-commerce company
specializing in the sale of high-performance computer hardware, software and
peripheral products. Tech Squared, based in Minneapolis, is a national marketer
and distributor of mid- to high-end microcomputer hardware, software and
peripherals primarily to businesses in the desktop publishing, graphic arts and
pre-press industries, as well as an emerging customer base of Internet and
intranet site developers.
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EXCEPT FOR HISTORICAL FINANCIAL INFORMATION, THE INFORMATION CONTAINED
IN THIS RELEASE IS FORWARD-LOOKING AND SUBJECT TO CERTAIN RISKS AS DESCRIBED IN
THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
PROXY STATEMENT-PROSPECTUS FILED JOINTLY WITH DIGITAL RIVER, THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DEC. 31, 1998, AS AMENDED ON
NOVEMBER 2, 1999, AND THE COMPANY'S QUARTERLY REPORTS ON FORM 10-Q FOR THE
QUARTERS ENDED MARCH 31, 1999, JUNE 30, 1999 AND SEPTEMBER 30, 1999. ACTUAL
RESULTS MAY DIFFER SIGNIFICANTLY BASED ON SUCH RISKS.
11/19/99
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EXHIBIT G
Tech Squared Shareholders Approve Voluntary Dissolution of Company
MINNEAPOLIS, Dec. 10 /PRNewswire/ -- Shareholders of Tech Squared
Inc. (OTC Bulletin Board: TSQD) today approved the dissolution of the
company in accordance with a plan of voluntary liquidation and dissolution.
The vote clears the way for Tech Squared to complete the sale of its
operating assets pursuant to an asset purchase agreement with Netdirect
Corporation International (formerly Virtual Technology Corporation).
"I'm particularly pleased that 93 percent of the minority
shareholders who placed a vote voted in favor of the proposed dissolution,"
said Chuck Reese, president and chief executive officer of Tech Squared.
The company said it intends to complete a tax-free reorganization
with Digital River, Inc. (Nasdaq: DRIV) in accordance with a previously
announced acquisition agreement. Tech Squared will be dissolved promptly
after completion of this reorganization.
Closing of the reorganization is subject to completion of the sale
or other disposition of Tech Squared's operating assets and the
establishment of a liquidating trust to satisfy known or contingent
liabilities of Tech Squared, and other customary conditions. Tech Squared
currently intends to deposit cash and a portion of the to-be-issued shares
of Digital River common stock into the liquidating trust to satisfy this
requirement. The remaining newly-issued shares of Digital River common
stock, which are expected to constitute substantially all of the assets of
Tech Squared, will then be distributed to Tech Squared shareholders on a
pro-rata basis.
Tech Squared has signed a definitive agreement with Netdirect
Corporation International (OTC Bulletin Board: VTCO) under which Netdirect
will acquire substantially all of Tech Squared's operating assets for a cash
purchase price of approximately $3,000,000. Closing of the asset sale to
Netdirect is expected to occur shortly. Netdirect is a Minneapolis-based
e-commerce company specializing in the sale of high-performance computer
hardware, software and peripheral products.
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Tech Squared, based in Minneapolis, is a national marketer and
distributor of mid- to high-end microcomputer hardware, software and
peripherals primarily to businesses in the desktop publishing, graphic arts
and pre-press industries, as well as an emerging customer base of Internet
and intranet site developers.
Except for historical financial information, the information
contained in this release is forward-looking and subject to certain risks as
described in the company's filings with the Securities and Exchange
Commission, including the proxy statement-prospectus filed jointly with
Digital River, the company's annual report on Form 10-K for the year ended
Dec. 31, 1998, as amended on November 2, 1999, and the company's quarterly
reports on Form 10-Q for the quarters ended March 31, 1999, June 30, 1999
and September 30, 1999. Actual results may differ significantly based on
such risks.
For more information, contact Tom Langenfeld of BlueFire Partners,
612-371-0000, for Tech Squared Inc., or Jeffrey F. Martin of Tech Squared
Inc., 612-832-5622.
SOURCE Tech Squared Inc.
- -0- 12/10/1999
/CONTACT: Tom Langenfeld of BlueFire Partners, 612-371-0000, for Tech
Squared Inc., or Jeffrey F. Martin of Tech Squared Inc., 612-832-5622/
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EXHIBIT H
FROM: FOR:
BlueFire Partners Tech Squared Inc.
1300 Fifth Street Towers, 150 S. 5th St. 6690 Shady Oak Rd.
Minneapolis, Minn. 55402 Eden Prairie, Minn. 55344
Contact - Tom Langenfeld 612-371-0000 Contact - Jeffrey F. Martin
612-832-5622
FOR IMMEDIATE RELEASE
TECH SQUARED COMPLETES REORGANIZATION WITH DIGITAL RIVER
COMPANY BEGINS SHAREHOLDER DISTRIBUTION OF DIGITAL RIVER STOCK HOLDINGS,
REMOVES TECH SQUARED SHARES FROM OTC BULLETIN BOARD
MINNEAPOLIS, Dec. 20, 1999 - Tech Squared Inc. (OTC Bulletin
Board:TSQD) announced today that it has completed the sale of substantially all
of its operating assets to Virtual Technology Corporation, d/b/a Netdirect
Corporation International-TM- (OTC Bulletin Board:VTCO) (Netdirect), for a cash
purchase price of approximately $3,300,000. The sale includes Tech Squared's
DTP Direct, Net Direct and distribution operations, along with various trade and
Internet domain names.
Tech Squared also completed its tax-free reorganization with Digital
River, Inc. (Nasdaq:DRIV) pursuant to a previously-announced acquisition
agreement. In the reorganization, Digital River received 3,000,000 shares of
its own common stock which had been held by Tech Squared plus $1,200,000 in cash
from Tech Squared and, in exchange, issued 2,650,000 shares of Digital River
common stock to Tech Squared.
Closing of the reorganization included the establishment of a
liquidating trust to satisfy known or contingent liabilities of Tech Squared and
the deposit, by Tech Squared, into the liquidating trust of assets adequate to
satisfy known and contingent liabilities. As part of the reorganization, Tech
Squared deposited all of its remaining cash, notes and other assets into the
liquidating trust together with 167,681 of the shares of Digital River common
stock issued to it today.
The remaining 2,482,319 newly-issued shares of Digital River
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common stock are being distributed to Tech Squared shareholders on a pro-rata
basis. Tech Squared shareholders will receive 17.59 shares of Digital River
common stock for each 100 shares of Tech Squared common stock held in this
initial distribution. The number of Digital River shares will be rounded to the
nearest whole number. No payments will be made for fractional shares. Tech
Squared shareholders should expect to receive a letter of transmittal in the
next several days setting forth the procedures for exchanging their share
certificates and related to certificates which have been lost or damaged.
Tech Squared shareholders will also receive one interest in the
liquidating trust for each share of Tech Squared common stock held. Each 100
trust units will initially represent beneficial ownership of 1.18 Digital River
shares in the trust. The trust agreement states that any Digital River shares
or other assets remaining after all liabilities, including contingent
liabilities, are satisfied shall be distributed to Tech Squared shareholders
pro rata. Principal contingent liabilities include pending lawsuits by a former
executive officer and by a shareholder who challenged the reorganization with
Digital River. The lawsuits are described in the Proxy Statement-Prospectus
mailed to all Tech Squared shareholders in connection with the meeting of
shareholders to approve the liquidation of Tech Squared.
Interests in the liquidating trust are not transferable except by will
or by operation of law and except that interests in the liquidating trust may be
transferred from broker-dealers and other holders of record to the beneficial
holders of such interests. Holders of interests in the liquidating trust will
be sent annual reports showing any taxable income attributable to such holders.
Tech Squared's common stock has been removed from the OTC Bulletin
Board effective as of the close of business Dec. 17, 1999. Tech Squared will be
formally dissolved and will cease to exist in the very near future.
Chuck Reese, president and chief executive officer of Tech Squared,
said, "We are pleased that our shareholders now have a more effective means to
realize the benefit of their investment by becoming direct owners of Digital
River common stock. If the pending lawsuits are resolved in favor of Tech
Squared, which we are confident will happen, our shareholders will receive an
additional distribution from the liquidating trust."
Netdirect is a Minneapolis-based e-commerce company specializing in
the sale of high-performance computer hardware, software and peripheral
products.
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Prior to the sale to Netdirect, Minneapolis-based Tech Squared was a
national marketer and distributor of mid- to high-end microcomputer hardware,
software and peripherals primarily to businesses in the desktop publishing,
graphic arts and pre-press industries, as well as an emerging customer base of
Internet and intranet site developers.
EXCEPT FOR HISTORICAL FINANCIAL INFORMATION, THE INFORMATION CONTAINED
IN THIS RELEASE IS FORWARD-LOOKING AND SUBJECT TO CERTAIN RISKS AS DESCRIBED IN
TECH SQUARED'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING
THE PROXY STATEMENT-PROSPECTUS FILED JOINTLY WITH DIGITAL RIVER, TECH SQUARED'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DEC. 31, 1998, AS AMENDED ON
NOVEMBER 2, 1999, AND TECH SQUARED'S QUARTERLY REPORTS ON FORM 10-Q FOR THE
QUARTERS ENDED MARCH 31, 1999, JUNE 30, 1999 AND SEPTEMBER 30, 1999. ACTUAL
RESULTS MAY DIFFER SIGNIFICANTLY BASED ON SUCH RISKS.
12/20/99
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EXHIBIT I
Company Press Release
Digital River Completes Acquisition of Tech Squared Assets
Exchange of Digital River Shares Now Complete
MINNEAPOLIS--(BUSINESS WIRE)--Dec. 20, 1999--Digital River, Inc. (Nasdaq:DRIV -
news) announced today that it has completed the acquisition of the assets of
Tech Squared Inc.
Under the terms of the tax-free reorganization, which was announced on July 11,
Digital River received 3 million shares of its own common stock owned by Tech
Squared and $1.2 million in cash. In exchange, Digital River issued 2.65 million
shares of the Company's common stock to Tech Squared.
Prior to the transaction closing, Tech Squared sold or liquidated all of its
operating assets.
About Digital River (a)
Digital River is a global leader in e-commerce outsourcing. The company provides
more than 5,000 companies with e-commerce services including commerce design,
order management, fulfillment, security, direct marketing and customer service.
The company develops front-to-back e-commerce solutions for software publishers,
online retailers and other large corporations including Fujitsu, Autodesk,
Hasbro, Staples, Adaptec, 3M, CompUSA, K-Mart, ScanSoft, Sega, Fox Interactive
and Egghead.com.
(a) Except for the historical information contained herein, this press release
contains forward-looking statements, including statements containing the words,
"believes," "anticipates," "expects" and similar words. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company,
or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others: the Company's limited operating
history and variability of operating results; market acceptance of electronic
software delivery; the Company's ability to
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maintain relationships with software publishers and online retailers;
competition in the electronic commerce market; and other risk factors referenced
in the Company's public filings with the Securities and Exchange Commission.
Contact:
Digital River, Minneapolis
Bob Strawman
Chief Financial Officer
[email protected]
612/253-1234
