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): April 7, 2005 (April 1, 2005)
Trinity Learning Corporation
(Exact Name of Registrant as Specified in Its Charter)
Utah
(State of Other Jurisdiction of Incorporation)
0-8924 73-0981865
(Commission File Number) (IRS Employer Identification No.)
1831 Second Street
Berkeley, California 94710
(Address of Principal Executive Offices) (Zip Code)
(510) 540-9300
(Registrant's Telephone Number, Including Zip 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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
-1-
Item 1.01 Entry into a Material Definitive Agreement
Effective April 1, 2005, Trinity Learning Corporation (the "Company")
entered into and closed an asset purchase agreement (the "Asset Purchase
Agreement") with PRIMEDIA Inc. and two PRIMEDIA affiliates (collectively,
"PRIMEDIA"), whereby PRIMEDIA sold to the Company certain assets related to its
PRIMEDIA's Workplace Learning division ("PWPL"). The assets comprised those
relating to PWPL's Healthcare Group, Government Services Group, Industrial
Services Group, Shared Services Group, and all other assets of PWPL, including
all of the assets of PRIMEDIA Digital Video Holdings LLC, excluding only those
assets primarily related to the operations of PWPL's Financial Services Group
and/or PWPL's Interactive Medical Network business (such assets referred to
collectively hereinafter as the "Business"). These assets are comprised of
content libraries, trademarks, brands, intellectual property, databases, and
physical assets. Included in the sale are certain video production and
distribution capabilities used to deliver integrated learning solutions to
professionals in the homeland security, healthcare, industrial, fire &
emergency, government, law enforcement and private security markets currently
served by PWPL.
In consideration for the Business, the Company assumed certain liabilities
of PRIMEDIA relating to the Business (the "Assumed Liabilities") in an aggregate
amount estimated at the time of closing to be between $28 and $30 million. Based
upon management's review of historical financial data with respect to the
Business, the Company estimates that revenues generated by the Business during
the Company's final fiscal quarter in fiscal 2005 will be approximately $7.0
million. Additional financial information pertaining to the Business, including
pro forma financial statements incorporating historical financial results of the
Business, will be filed by way of amendment to this Current Report on Form 8-K.
The purchase price for the Business is subject to a working capital
adjustment whereby the purchase price for the assets will be either reduced or
increased on a dollar-for-dollar basis to the extent that certain elements of
the working capital deficit of the Business as of April 1, 2005 is determined
within 90 days of such date to be either, respectively, less than or greater
than $4,000,000. Any such working capital adjustment shall be satisfied by a
cash payment by the responsible party, all pursuant to the terms of the Asset
Purchase Agreement. A copy of the Asset Purchase Agreement is attached hereto as
Exhibit 10.1 and is incorporated herein by this reference. The summary of the
transactions contemplated by the Asset Purchase Agreement set forth above is
qualified in its entirety by reference to such exhibit.
In connection with the transactions contemplated by the Purchase Agreement,
SBI USA LCC, a California limited liability company ("SBI"), agreed to guarantee
the performance by the Company of certain leases comprising part of the Assumed
Liabilities. In consideration for such guarantee (the "Guarantee"), the Company
entered into an agreement with SBI dated April 1, 2005 (the "SBI Agreement")
pursuant to which the Company agreed, among other things, to issue to SBI an
aggregate of 4,000,000 shares of the Company's common stock (which stock will
carry piggyback registration rights) (the "SBI Shares"), to reimburse SBI for
any expenses incurred by it in connection with the granting of the Guarantee, to
grant SBI the right to appoint an observer to the Company's Board of Directors,
to compensate such observer at the rate of $15,000 per month, plus expenses, and
-2-
to indemnify SBI for any liabilities that might accrue to it pursuant to the
Guarantee. A copy of the SBI Agreement, along with Annex A thereto, is attached
hereto as Exhibit 10.2. The foregoing summary of the transactions contemplated
by the SBI Agreement is qualified in its entirety by reference to such exhibit.
Item 2.01 Completion of Acquisition or Disposition of Assets
Effective April 1, 2005, the Company completed the acquisition of assets
from PRIMEDIA as described above under Item 1.01.
Item 3.02 Unregistered Sales of Equity Securities
As disclosed under Item 1.01 above, on April 1, 2005, the Company entered
into the SBI Agreement pursuant to which the Company agreed to issue the SBI
Shares. The issuance of this stock by the Company will be made in reliance on
Section 4(2) of the Securities Act of 1933 as a transaction not involving any
public offering. No advertising or general solicitation was or will be employed
in offering the securities, the offerings and sales will be made to one entity,
and the Company will restrict the transfer of the securities in accordance with
the requirements of the Securities Act of 1933. SBI will represent its intention
to acquire the securities for investment only and not with a view to or for sale
in connection with any distribution thereof, and appropriate legends will be
affixed to the stock certificates representing the SBI Shares.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed with this Current Report on Form 8-K:
Exhibit
Number Description
------- -----------
10.1 Asset Purchase Agreement dated April 1, 2005 among the
Company, PRIMEDIA Inc., a Delaware corporation, its
wholly-owned entity PRIMEDIA Digital Video Holdings LLC, a
Delaware limited liability company, and PRIMEDIA Workplace
Learning LP, a Delaware limited partnership.
10.2 SBI Agreement dated April 1, 2005 between SBI and the
Company.
-3-
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.
TRINITY LEARNING CORPORATION
Date: April 7, 2005 By: /s/ Douglas Cole
Douglas Cole, Chief Executive Officer
-4-