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):
September 16, 2003 (September 1, 2003)
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)
2526 Durant Avenue
Berkeley, California 94704
(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets
On September 1, 2003 (the "Closing Date"), Trinity Learning
Corporation (the "Company") completed the acquisition of 51% of the issued
and outstanding shares (the "Ayrshire Shares") of Ayrshire Trading Limited,
a British Virgin Islands company ("Ayrshire") that owns 95% of RiverBend
Group Holdings (Proprietary) Limited ("RiverBend"), a South African company
that provides learning services to corporations and individuals in South
Africa. The Company also acquired the option (the "Option") to purchase
the remaining 49% of Ayrshire.
The acquisition of the Ayshire Shares was made pursuant to the terms
of an agreement dated as of September 1, 2003 (the "Acquisition Agreement")
between the Company and Great Owl Limited, a British Virgin Islands company
("Great Owl"). In consideration for the Ayrshire Shares, the Company
issued a convertible non-interest-bearing promissory note (the "Note") to
Great Owl in the amount of US$20,000, which amount is convertible from time
to time into a maximum of 2,000,000 shares of the Company's common stock
("Conversion Stock"), provided that any amount of the Note that remains
outstanding at December 30, 2006 shall be automatically converted into
shares of the Company's common stock. The Company has the right, under
certain conditions, to withhold up to 400,000 shares of the Conversion
Stock in satisfaction for any breach of warranties by Great Owl under the
Acquisition Agreement.
Pursuant to the terms of the Acquisition Agreement and a related
escrow agreement, the Ayrshire Shares were delivered into escrow at closing
and will be held in escrow as security for the due performance of the
Company's obligations under the Note. The Company entered into a pledge
agreement in favor of Great Owl with respect to the Ayrshire Shares, and in
the event of a default under the Note, the Ayrshire Shares shall be deemed
sold back to Great Owl at their par value. An event of default under the
Note includes, among other things, a voluntary or involuntary bankruptcy
proceeding involving the Company and the failure by the Company to list its
shares of common stock on a major stock exchange by December 30, 2006.
As further consideration for the Ayrshire Shares, the Company agreed
to make a non-interest-bearing loan of U.S. $1,000,000 to Ayrshire,
$300,000 of which was advanced at closing and $700,000 of which is due to
be advanced within 60 days of closing. This loan is to be repaid in full
by December 30, 2006, unless the Option has not been exercised by such
time, in which case the loan is repayable in five equal annual
installments, commencing on December 31, 2007.
In addition to the Ayrshire Shares, the Company acquired the Option,
which is exercisable for a period of ten (10) years from the day upon which
the average closing price of the Company's common stock on a major stock
exchange equals or exceeds U.S.$1.50 per share for ten (10) consecutive
business days. The Company may exercise the Option in consideration for
the issuance of 1,500,000 shares of its common stock (the "Option Stock"),
1,200,000 shares of which are deliverable immediately to Great Owl upon
exercise of the Option and 300,000 shares ("Option Escrow Shares") of which
are deliverable into escrow upon exercise of the Option. The number of
Option Escrow Shares deliverable to Great Owl is subject to adjustment in
satisfaction for any breach by Great Owl of warranties to the Company under
the Acquisition Agreement. Any Option Escrow Shares remaining in escrow
by the later to occur of that date which is two years following the Closing
Date and the date upon which Ayrshire acquires at least 51% of the issued
and outstanding shares of e-Degree (Proprietary) Limited, a South African
company ("e-Degree") (see below under "About RiverBend"), shall be
deliverable to Great Owl; provided, however, that if Ayrshire has not
acquired control of e-Degree by December 30, 2006, the Option Escrow Shares
shall be delivered out of escrow back to the Company.
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Pursuant to the terms of the Acquisition Agreement, the Company has
agreed to appoint Mr. Arthur Kidson to the Company's Board of Directors
until the Company's next annual general meeting. In addition, the Company
has agreed to invite Mr. Nigel Tattersal to attend all meetings of the
Company's board of directors as a observer until the Company's next annual
general meeting. Messrs. Kidson and Tattersal are both principals of
RiverBend. Mr. Kidson graduated from the University of South Africa and is
a chartered accountant, having held various management positions in South
Africa with Coopers and Lybrand and PricewaterhouseCoopers. Mr. Tattersal
is also a chartered accountant and South African business executive and is
the founder and managing director of RiverBend.
The Company and Great Owl shall each be entitled to appoint an equal
number of directors to the board of directors of Ayrshire until such time
as the Company exercises the Option.
Copies of the Acquisition Agreement and the ancillary agreements
related thereto are filed herewith as Exhibits 10.1 10.6, respectively,
and are incorporated herein by reference. The summary of the transaction
set forth above is qualified in its entirety by reference to such exhibits.
About RiverBend
---------------
RiverBend is a leading provider of on-line university degrees and
other learning services to corporations and individuals in South Africa.
Founded in 1998, RiverBend operates through the following operating
subsidiaries that have developed a holistic approach to technology-enabled
learning, education and training:
- e-Degree, a provider of corporate learning solutions (including
online degrees from some of South Africa's most respected
universities) that is owned by Riverbend, Price Waterhouse
Coopers and a South African media group
- Learning Advantage, a provider of customized learning solutions
to corporations, and
- Reusable Objects, a developer of leading-edge learning software.
These RiverBend subsidiaries serve major corporate customers in South
Africa and consider themselves leaders in South Africa's initiative to
increase employment and competitiveness by expanding and improving adult
basic education and training.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
The financial statements required by this item are not filed
herewith but shall be filed by an amendment to this Current Report on
Form 8-K not later than 60 days after the date this report was
required to be filed.
(b) Pro Forma Financial Information
The pro forma financial information required by this item is not
filed herewith but shall be filed by an amendment to this Current
Report on Form 8-K not later than 60 days after the date this report
was required to be filed.
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(c) Exhibits
10.1 Acquisition Agreement dated September 1, 2003 between Great
Owl Limited, a British Virgin Islands company, and Trinity
Learning Corporation
10.2 Escrow Agreement dated September 1, 2003 by and among Great
Owl Limited, Trinity Learning Corporation, and Reed Smith of
London as escrow agent
10.3 Deed of Pledge dated September 1, 2003 by Trinity Learning
Corporation, a Utah corporation, to Great Owl Limited, a
British Virgin Islands company
10.4 Warranties of Seller under the Acquisition Agreement dated
September 1, 2003 between Great Owl Limited, a British
Virgin Islands company, and Trinity Learning Corporation
10.5 Warranties of Purchaser under the Acquisition Agreement
dated September 1, 2003 between Great Owl Limited, a British
Virgin Islands company, and Trinity Learning Corporation
10.6 Convertible Promissory Note dated September 1, 2003, issued
by Trinity Learning Corporation, a Utah corporation, to
Great Owl Limited, a British Virgin Islands company
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: September 16, 2003 By: /s/ Douglas Cole
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Douglas Cole,
Chief Executive Officer
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