UNITED STATES
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 30, 2014
SIBLING GROUP HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
TEXAS | 000-28311 | 76-0270334 |
(State or other jurisdiction of | (Commission File Number) | (IRS Employer |
1355 Peachtree Street, Suite 1150, Atlanta, GA 30309 |
(Address of principal executive offices) |
(404) 551-5274
(Registrant’s telephone number, including area code)
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 communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
Item 1.01 - Entry into a Material Definitive Agreement.
Item 2.01 - Completion of Acquisition or Disposition of Assets.
On March 30, 2013, Sibling Group Holdings, Inc., (the “Company”, “we”, “us”, “our”), through its wholly owned subsidiary, BLSCH Acquisition, LLC signed a Closing Terms Addendum (the “Closing Addendum”) to the previously disclosed Asset Purchase Agreement between the BLSCH Acquisition, LLC and BLENDEDSCHOOLS.NET, an unrelated third party (“Blended Schools”) dated November 25, 2013. Under the terms of the Closing Addendum, we closed on the purchase of assets of Blended Schools effective as of May 30, 2014. Blended Schools provides online curriculum with 192 master courses for the K-12 marketplace, all Common Core compatible; a complete hosted course authoring and learning management system (LMS) environment featuring both Blackboard and Canvas; the new Language Institute, with online courses in Arabic, Chinese, Spanish, French, Japanese, Latin, Russian, German and Hindi, all oriented to meet today's ESL requirements. The Blendedschools.net staff provides online, and on-site training for Blended Learning training methods, conversion planning, and implementation.
Under the terms of the Closing Addendum, we agreed to pay the $550,000 purchase price for the assets by assuming $446,187 of Blended Schools’ debt, agreeing to pay up to an additional $50,000 in debt or payment to Blended Schools if the amount of its debts do not exceed $446,187 and by payment of $53,813 in cash on or before June 6, 2014. Included in the debts we assumed is a $100,372 bank line of credit that we are obligated to pay off if we are unable to obtain the lender’s consent to an assignment by June 15, 2014. In addition, we agreed to pay certain other debts of Blended Schools as provided for in the Asset Purchase Agreement.
The foregoing description of the Closing Addendum does not purport to be complete and is qualified in its entirety by the Closing Addendum, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 which is incorporated herein by reference.
Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information required by this Item 2.03 is included under Item 1.01 of this Current Report on Form 8-K.
Item 7.01 - Regulation FD Disclosure.
On May 30, 2014 the Company issued a press release regarding the Blended Schools transaction. The press release is attached hereto as Exhibit 99.1 and incorporated herein by this reference.
The information contained in the press release attached hereto is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 - Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
The financial information that is required pursuant to this Item will be filed by amendment not later than 71 calendar days after the date that this initial report on Form 8-K is required to be filed.
(d) Exhibits
No. |
| Description |
| Closing Terms Addendum between BLSCH Acquisition, LLC and BLENDEDSCHOOLS.NET, dated May 30, 2014. | |
| Press Release of Sibling Group Holdings, Inc. dated May 30, 2014 (furnished herewith). |
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 thereunto duly authorized.
| Sibling Group Holdings, Inc. | |
|
|
|
Date: May 30, 2014 | By: | /s/ Dave Saba |
|
| Dave Saba, President |
Exhibit 10.1
CLOSING TERMS ADDENDUM
The following are closing terms related to completing the asset purchase under the terms of the Asset Purchase Agreement between BLSCH Acquisition, LLC (“Purchaser”) and Blendedschools.net (“Seller) dated November 25, 2013 (the “Agreement”):
1. All defined terms below shall have the same meaning as the defined terms in the Agreement unless otherwise provided.
2. The Closing Date shall be treated as of May 30, 2014 (the “Closing Date”).
3. Seller will provide Purchaser with access to Seller’s books and records after the Closing Date to allow Purchaser to complete an audit of Seller’s financial statements in order to allow Purchaser to report Seller’s financial results to the SEC. Seller agrees to provide Purchaser with full access to all documents needed for the timely completion of the audit. The Purchaser will assume all expenses associated with this audit.
4. Seller shall retain its cash balance of $235,015.95 as of May 30, 2014 (the “Retained Cash”). Additionally, Purchaser shall wire to an account designated by Seller the sum of $53,812.97 on or before June 6, 2014. Said amount, plus the $50,000.00 Additional Reserve Amount discussed in Sections 7 and 8, represent the balance of the Purchase Price owed to Seller.
5. Purchaser shall assume in full and shall promptly satisfy the following debts of Seller owed as of the Closing Date (the “Assumed Liabilities”):
Description |
| Amount |
Accounts Payable per previously provided schedule |
| $ 278,890.90 |
Babst Calland (Estimated) |
| 3,250.00 |
May Vacation for Seller Employees |
| 1,942.53 |
IU Salaries & Vacation to 5/31 |
| 23,370.75 |
IU Monthly Invoice for May (Estimated.) |
| 38,361.29 |
Kish Bank Line of Credit |
| 100,371.56 |
TOTAL |
| $ 446,187.03 |
Purchaser will provide Seller with proof of satisfaction of said debts immediately upon payment of each debt. Seller provides no warranties or representations that the Kish Bank Line of Credit can be assumed by Purchaser. Purchaser agrees to obtain written approval from Kish Bank to assume in full Seller’s Line of Credit on or before June 15, 2014, and to provide documentation of said approval to Seller by said date. In the event Seller cannot obtain approval from Kish Bank to assume Seller’s Line of Credit, Purchaser shall pay the then current amount due on the Line of Credit in full on or before June 30, 2014, and said Line of Credit shall be immediately closed. Seller agrees it will not use the Line of Credit from the Closing Date forward. The listing of the Assumed Liabilities above shall not be deemed to limit or supersede the assumption of other liabilities as required under Section 1.3 of the Asset Purchase Agreement.
6. Purchaser agrees to indemnify and hold Seller harmless from the Assumed Liabilities set forth above in accordance with the terms of Section 7.3 of the Asset Purchase Agreement.
7. Seller shall be entitled to object to any claim by a creditor included in the Assumed Liabilities and Purchaser will obtain Seller’s consent prior to satisfying obligations to any such creditor. If the actual amount of the Assumed Liabilities as of the Closing Date paid by Purchaser is less than $446,187.03,
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Purchaser shall remit to Seller an amount equal to the difference between the Assumed Liabilities in the amount of $446,187.03 and the amount actually paid by Purchaser to satisfy in full those Assumed Liabilities. In the event that Purchaser is required to pay more than $446,187.03 for the Assumed Liabilities listed above (the “Excess Assumed Liabilities”), the Excess Assumed Liabilities up to $50,000.00 (the “Additional Reserve Amount”) shall be paid by Purchaser upon mutual agreement of Purchaser and Seller that said debt is valid and due.
8. Upon mutual written agreement of Purchaser and Seller that said debt is valid and due, Purchaser shall pay any debts of Seller due as of the Closing Date, but not listed as an Assumed Liability in Paragraph 5 above, which amount, along with the Excess Assumed Liabilities, does not exceed the Additional Reserve Amount. The balance of the Additional Reserve Amount, after payment of any debts required to be paid under Sections 7 and 8, shall be paid in full by Purchaser to Seller no later than ninety (90) days after the Closing Date.
9. Purchaser and Seller agree to execute all necessary documents to complete the asset sale, including, but not limited to, the Bill of Sale and service contract whereby Purchaser shall provide services on behalf of Seller for contracts in which consents to assignment have not been obtained as of the Closing Date. All necessary documents shall be executed on or before June 2, 2014.
10. In the event of a conflict between the terms of the Asset Purchase Agreement and this agreement, the terms of this agreement shall be deemed to control. Otherwise, the terms of the Asset Purchase Agreement remain in full force and effect.
11. As of the day following the Closing Date, Purchaser’s designated representative shall be entitled to operate all aspects of the Seller’s business and maintain possession and control over the Purchased Assets and shall be entitled to all revenues and responsible for satisfaction of all expense of the Seller’s business as represented by the Purchased Assets.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date first above written.
BLSCH Acquisition, LLC By:/s/ Maurine A. Findley Print Name: Maurine A. Findley Its: Chief Financial Officer Date: 5/29/14 | Blendedschools.net By: /s/ C. Gregory Hoover Print Name: C. Gregory Hoover Its: President Date: 5/30/14 |
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Exhibit 99.1
SIBLING GROUP FINALIZES BLENDED SCHOOLS NETWORK TRANSACTION
Expansion of Marketing, Sales and Offerings Represent Key Opportunity
ATLANTA, GA May 30, 2014 (Marketwired via COMTEX) Sibling Group Holdings, Inc. (OTCQB: SIBE), (www.siblinggroup.com ) (the “Company”) announced today that it has finalized the acquisition of Blended Schools Network ( www.blendedschools.net , “BSN”), with agreement from both companies Board of Directors. BSN will operate as an independent business unit, and be a key element of Sibling Group’s K-12 strategy for high quality content development, professional development, and for emerging educational technologies.
Blended Schools Network was founded in 2002 by Pennsylvania school superintendents in order to bring high quality online learning to all students. Currently, BSN serves over 160 school districts and has over 300,000 course enrollments for this past school year, and has historically generated around $3M in annual revenues. They have developed over 190 online courses, 15,000 lessons, 12,000 videos and over 8,000 modules.
Dave Saba, Sibling Group Holdings President, commented, “Industry experts have projected that by 2019, 50 percent of all high school courses will be delivered online*, and BSN’s positioning in this market should give us solid growth potential. Moreover, with other acquisitions under consideration, it can be strongly leveraged, for increased scale and market presence.”
Leaders from both organizations have worked closely together over the last six months to position BSN for substantial growth. BSN has already experienced success through expansion into new states like Nevada, California, Wisconsin, Ohio and New Jersey, and is focused on expanding potential national partnerships for distribution of both student-facing content and teacher professional development.
“We are very excited to be able to take this incredible resource for teachers and students and bring it to so many more schools in the U.S. and around the world,” stated Saba. “Building a high performing lifelong learning company around this exceptional team of education professionals is the perfect next step for Sibling Group Holdings and sets the tone for long term success.”
The BSN team is already working to re-launch Sibling’s Special Education, and Social Emotional Learning products under the BSN brand. BSN is also working with Sibling experts on bringing a Childhood Development Associate certification product to market in 2014.
* Source - Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns by Clayton Christensen, Curtis W. Johnson andMichael B. Horn
About Sibling Group Holdings, Inc:Sibling Group Holdings, Inc. (OTCQB: SIBE) (www.siblinggroup.com) intends to acquire, on a global basis, advanced technology and education management operations in order to enhance and accelerate the delivery of 21st century learning. By accessing funding from the public capital markets and melding them into a unified strategy, Sibling seeks to accelerate the improvement of education across the globe. The results: better educated children and adults, a sustainable and cost effective instructional model and reduced dependence on governmental funding. Our current operations include professional development for the teaching profession and educational technology offerings including classroom management tools. The Company's executive offices are in Atlanta, Georgia.
Blended Schools Network will be an independent business unit of Sibling Group Holdings, Inc., and will continue to operate providing online curriculum with 192 master courses for the K-12 marketplace, all Common Core compatible; a complete hosted course authoring and learning management system (LMS) environment featuring both Blackboard and Canvas; the new Language Institute, with online courses in Arabic, Chinese, Spanish, French, Japanese, Latin, Russian, German and Hindi, all oriented to meet today's ESL requirements. The Blendedschools.net staff provides online, and on-site training for Blended Learning training methods, conversion planning, and implementation. For more information, go to www.blendedschools.net , or call Sheri Border, at 814-542-2501 x181, or by email at sborder@blendedschools.net.
Safe Harbor:
This press release may contain forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Sibling Group Holdings, Inc. is subject to risks detailed from time to time in its publicly filed documents available at www.sec.gov. Sibling Group Holdings, Inc. does not undertake to update any forward-looking statements that it may make to conform to actual results. All current and potential shareholders are asked to read all filings for the Company at the Securities and Exchange Commission web site, www.SEC.gov.
Contact:
Alexandra Langheinrich
Email: Alexandra@wallstreetnewscast.com
Phone: (201) 355-6946