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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
(AMENDMENT NO. _________________)
TECH SQUARED INC.
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(Name of the Issuer)
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)
Charles E. Reese, Jr. Jerry F. Martin
Tech Squared Inc. Tech Squared Inc.
5198 West 76th Street 5198 West 76th Street
Edina, Minnesota 55439 Edina, Minnesota 55439
(612) 832-5622 (612) 832-5622
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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
This statement is filed in connection with (check the appropriate box):
a. /X/ 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. / / 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. /X/
Calculation of Filing Fee
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Transaction
Valuation Amount of Filing Fee
$59,278,500* $11,856**
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*Transaction Valuation has been calculated by using the sum of (1) the estimated
consideration of $3,125,000 to be received by Tech Squared from the sale of its
operating assets and (2) the total value of the 2,650,000 shares of Digital
River, Inc. ("Digital River") common stock, based on a price per share of
$21.19 determined in accordance with Rule 0-11(a)(4), to be received by Tech
Squared in the transaction described herein and in the Preliminary Proxy
Statement-Prospectus on Schedule 14A incorporated herein by reference.
**1/50th of 1% of Transaction Value, calculated in accordance with Rule 0-11.
/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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Form or registration no.: Preliminary 14A Dated filed: August 10, 1999
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INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3 (this "Schedule
13E-3") is being filed by Tech Squared Inc., a Minnesota corporation ("Tech
Squared"), pursuant to Section 13(e) of the Securities Exchange Act of 1934, as
amended, 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.
Concurrently with the filing of this Schedule 13E-3, Tech Squared is
filing with the Securities and Exchange Commission a Preliminary Proxy
Statement-Prospectus on Schedule 14A (the "Preliminary Proxy
Statement-Prospectus") relating to the special meeting of Tech Squared
shareholders. At the special meeting, Tech Squared shareholders will consider
and vote upon the voluntary dissolution of Tech Squared pursuant to the Plan
of Liquidation and Dissolution. The Preliminary Proxy Statement-Prospectus is
also the prospectus of Digital River related 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. The
Preliminary Proxy Statement-Prospectus is attached hereto as Exhibit (d), and
a copy of the Plan of Liquidation and Dissolution is attached as Annex A to
the Preliminary Proxy Statement-Prospectus.
The following Cross Reference Sheet, prepared pursuant to General
Instruction F to Schedule 13E-3, shows the location in the Preliminary Proxy
Statement-Prospectus of the information required to be included in this Schedule
13E-3. The information set forth in the Preliminary Proxy Statement-Prospectus,
including all annexes thereto, is hereby expressly incorporated herein by
reference as set forth in the Cross Reference Sheet and the responses in this
Schedule 13E-3, and such responses are qualified in their entirety by reference
to the information contained in the Preliminary Proxy Statement-Prospectus and
the annexes thereto. The Preliminary Proxy Statement-Prospectus is subject to
completion or amendment. Capitalized terms used but not defined in this Schedule
13E-3 shall have the meanings given to them in the Preliminary Proxy
Statement-Prospectus.
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CROSS-REFERENCE SHEET
Item of Schedule 13E-3 Location in Preliminary Proxy Statement-Prospectus
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ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) . . . . . . . . . . "Summary of the Proxy Statement-Prospectus -- The
Companies"
(b) . . . . . . . . . . "The Special Meeting of Tech Squared Shareholders --
Shareholder Record Date for the Special Meeting"
(c) . . . . . . . . . . "Comparative Per Share Market Price Data"
(d) . . . . . . . . . . "Summary of the Transaction and Special Factors --
Tech Squared Selected Historical Financial Data"
(e) . . . . . . . . . . Not applicable.
(f) . . . . . . . . . . Not applicable.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Tech Squared Inc., the issuer of the
class of equity securities which is the subject of the Rule 13e-3 transaction.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
This schedule is not filed by an affiliate of the issuer of the class of
securities which is the subject of the Rule 13e-3 transaction. This item is
therefore not applicable.
ITEM 4. TERMS OF THE TRANSACTION.
(a) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Plan of Liquidation and Dissolution"; "Summary of
the Transaction and Special Factors - Sale of
Operating Assets"; "Summary of the Transaction and
Special Factors - The Acquisition Agreement";
"Summary of the Transaction and Special Factors -
The Liquidating Trust Agreement"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - General"; "The Voluntary Dissolution
and the Plan of Liquidation and Dissolution - The
Sale of Operating Assets"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - The Acquisition Agreement"; "The
Voluntary Dissolution and the Plan of Liquidation
and Dissolution - The Liquidating Trust Agreement"
(b) . . . . . . . . . . "The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - The Voting Agreements"
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ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Plan of Liquidation and Dissolution"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - General"
(b) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Plan of Liquidation and Dissolution"; "Summary of the
Transaction and Special Factors - the Sale of
Operating Assets"; "Summary of the Transaction and
Special Factors - The Acquisition Agreement"; "The
Voluntary Dissolution and the Plan of Liquidation and
Dissolution - General"; "The Voluntary Dissolution
and the Plan of Liquidation and Dissolution - The
Sale of Operating Assets"; "The Voluntary Dissolution
and the Plan of Liquidation and Dissolution - The
Acquisition Agreement"
(c) . . . . . . . . . . Not applicable.
(d) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Plan of Liquidation and Dissolution"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - Delisting and Deregistration of Tech
Squared Common Stock After the Transaction"
(e) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Plan of Liquidation and Dissolution"; "Summary of
the Transaction and Special Factors - the Sale of
Operating Assets"; "Summary of the Transaction and
Special Factors - The Acquisition Agreement"; "The
Voluntary Dissolution and the Plan of Liquidation
and Dissolution - General"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - The Sale of Operating Assets"; "The
Voluntary Dissolution and the Plan of Liquidation
and Dissolution - The Acquisition Agreement"
(f) . . . . . . . . . . "The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - Delisting and
Deregistration of Tech Squared Common Stock After
the Transaction"
(g) . . . . . . . . . . "The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - Delisting and
Deregistration of Tech Squared Common Stock After
the Transaction"
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) . . . . . . . . . . "The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - General"; "Expenses"
(b) . . . . . . . . . . "Expenses"
(c) . . . . . . . . . . Not applicable.
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(d) . . . . . . . . . . Not applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Reasons for the Transaction"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - Background of the Transaction"; "The
Voluntary Dissolution and the Plan of Liquidation
and Dissolution - Tech Squared's Reasons for the
Transaction"
(b) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Reasons for the Transaction"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - Tech Squared's Reasons for the
Transaction"; "The Voluntary Dissolution and the
Plan of Liquidation and Dissolution - Opinion of
Tech Squared's Financial Advisor"
(c) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Reasons for the Transaction"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - Tech Squared's Reasons for the
Transaction"; "The Voluntary Dissolution and the
Plan of Liquidation and Dissolution - Opinion of
Tech Squared's Financial Advisor"
(d) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Plan of Liquidation and Dissolution"; "Summary of
the Transaction and Special Factors - Certain United
States Federal Income Tax Consequences of the
Transaction"; "Summary of the Transaction and
Special Factors - Accounting Treatment of the
Exchange"; "Risk Factors - Risks Relating to the
Transaction"; "The Voluntary Dissolution and the
Plan of Liquidation and Dissolution - Certain United
States Federal Income Tax Consequences of the
Transaction"; "The Voluntary Dissolution and the
Plan of Liquidation and Dissolution - Accounting
Treatment of the Transaction"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - Delisting and Deregistration of Tech
Squared Common Stock After the Transaction";
"Comparison of Rights of Holders of Tech Squared
Common Stock and Digital River Common Stock"
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Recommendation of Tech Squared's Board of
Directors"; "The Voluntary Dissolution and the Plan
of Liquidation and Dissolution - Recommendation of
Tech Squared's Board of Directors"
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(b) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Recommendation of Tech Squared's Board of
Directors"; "Summary of the Transaction and Special
Factors - Reasons for the Transaction"; "The
Voluntary Dissolution and the Plan of Liquidation
and Dissolution - Recommendation of Tech Squared's
Board of Directors"; "The Voluntary Dissolution and
the Plan of Liquidation and Dissolution - Tech
Squared's Reasons for the Transaction"; "The
Voluntary Dissolution and the Plan of Liquidation
and Dissolution - Opinion of Tech Squared's
Financial Advisor"
(c) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Shareholder Approval"
(d) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Recommendation of Tech Squared's Board of Directors"
(e) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Recommendation of Tech Squared's Board of Directors"
(f) . . . . . . . . . . Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Tech Squared's Financial Advisor and its Opinion";
"The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - Opinion of Tech
Squared's Financial Advisor"
(b)(1) . . . . . . . . "Summary of the Transaction and Special Factors -
Tech Squared's Financial Advisor and its Opinion";
"The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - Opinion of Tech
Squared's Financial Advisor"
(b)(2) . . . . . . . . "Summary of the Transaction and Special Factors -
Tech Squared's Financial Advisor and its Opinion";
"The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - Opinion of Tech
Squared's Financial Advisor"
(b)(3) . . . . . . . . "Summary of the Transaction and Special Factors -
Tech Squared's Financial Advisor and its Opinion";
"The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - Opinion of Tech
Squared's Financial Advisor"
(b)(4) . . . . . . . . Not applicable.
(b)(5) . . . . . . . . "Summary of the Transaction and Special Factors -
Tech Squared's Financial Advisor and its Opinion";
"The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - Opinion of Tech
Squared's Financial Advisor"
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(b)(6) . . . . . . . . "The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - Opinion of Tech
Squared's Financial Advisor"
(c) . . . . . . . . . . "Annex E - Opinion of SG Cowen Securities
Corporation"
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) . . . . . . . . . . "Share Ownership By Principal Shareholders,
Management and Directors of Tech Squared"
(b) . . . . . . . . . . "Share Ownership By Principal Shareholders,
Management and Directors of Tech Squared"
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH
RESPECT TO THE ISSUER'S SECURITIES.
"The Voluntary Dissolution and the Plan of
Liquidation and Dissolution - The Voting Agreements"
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN
PERSONS WITH REGARD TO THE TRANSACTION.
(a) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Shareholder Approval"; "The Voluntary Dissolution
and the Plan of Liquidation and Dissolution - The
Voting Agreements"
(b) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Recommendation of Tech Squared's Board of
Directors"; "The Special Meeting of Tech Squared
Shareholders - Purpose of the Special Meeting"
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Dissenters' or Appraisal Rights"; "The Voluntary
Dissolution and the Plan of Liquidation and
Dissolution - Dissenters' or Appraisal Rights"
(b) . . . . . . . . . . Not applicable.
(c) . . . . . . . . . . Not applicable.
ITEM 14. FINANCIAL INFORMATION.
Pursuant to General Instruction D to Schedule 13E-3, Tech Squared's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998, as
amended on August 9, 1999 and its Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999 have been delivered with the Preliminary Proxy
Statement Prospectus on Schedule
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14A as Exhibits 1 and 2, respectively. Tech Squared's audited financial
statements for the periods covered therein are incorporated herein by
reference.
(a) . . . . . . . . . . "Summary of the Transaction and Special Factors -
Tech Squared Historical Financial Data"; "Summary of
the Transaction and Special Factors - Comparative
Per Share Data"
(b) . . . . . . . . . . Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) . . . . . . . . . . Not applicable.
(b) . . . . . . . . . . "The Special Meeting of Tech Squared Shareholders -
Proxies"; "Expenses"
ITEM 16. ADDITIONAL INFORMATION.
The Preliminary Proxy Statement-Prospectus on Schedule 14A and the Annexes
thereto are incorporated herein by reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) . . . . . . . . . . Not applicable.
(b) . . . . . . . . . . Annex E to the Preliminary Proxy Statement-
Prospectus - Opinion of SG Cowen Securities
Corporation
(c) . . . . . . . . . . Annex D to the Preliminary Proxy Statement-
Prospectus - Voting Agreements
(d) . . . . . . . . . . Preliminary Proxy Statement-Prospectus on
Schedule 14A
(e) . . . . . . . . . . Not applicable.
(f) . . . . . . . . . . Not applicable.
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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.
August 10, 1999
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(Date)
/s/ Jeffrey F. Martin
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(Signature)
Jeffrey F. Martin, Chief Financial Officer
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(Name and Title)
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