UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Amendment No. 2)

Under the Securities Exchange Act of 1934

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

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CUSIP No. 460981301	13D/A	Page 4 of 7

Explanatory Note:  This filing constitutes Amendment No. 2 to the Schedule 13D filed with the Securities and Exchange Commission on November 25, 2015 by Loeb Holding Corp. ("LHC") and Thomas L. Kempner, as amended by Amended No. 1 filed on January 19, 2016 (collectively, as amended, the "Schedule 13D").  Except as described herein, the information contained in the Schedule 13D has not been updated or amended.  Capitalized terms used but not defined herein have the meanings ascribed thereto in the Schedule 13D.

Item 4.  Purpose of Transaction.

Item 4 is amended and restated in its entirety as follows:

All of the securities reported herein were acquired for investment purposes and/or as compensation for, and in connection with, Mr. Kempner's position with the Issuer.

LHC is the founding principal investor for the Issuer and its predecessors. Mr. Kempner has served on the Board of Directors of the Issuer since its inception, and serves on the Executive Committee of the Issuer. Mr. Bruce L. Lev is a Managing Director of LHC and also serves on the Board of Directors of the Issuer. As such, the Reporting Persons take, and will continue to take, an active role in communication with the Issuer's management and Board of Directors about a broad range of operational and strategic matters.  The Reporting Persons may take positions and/or make proposals with respect to, or with respect to potential changes in, the operations, management, the certificate of incorporation and bylaws, Board of Directors composition, ownership, capital or corporate structure, dividend policy, potential acquisitions or sales involving the Issuer or certain of the Issuer's businesses or assets, strategy and plans of the Issuer as a means of enhancing stockholder value, or may change their intention with respect to any and all matters referred to in this Item 4, and, as part of their ongoing communications, the Reporting Persons encourage the Issuer to consider a wide variety of alternatives, which may include a transaction in which the Reporting Persons may participate.  The Reporting Persons intend to review their investment in the Issuer on a continuing basis and may from time to time in the future express their views to and/or meet with management, the Board of Directors, other stockholders or third parties, including lenders, potential acquirers, service providers and financing sources, and/or formulate plans or proposals regarding the Issuer, its assets or its securities. Such proposals or positions may include one or more plans that relate to or would result in any of the actions set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D.  Additionally, the Reporting Persons, in their capacity as stockholders of the Issuer, review and intend to continue to review, on an ongoing basis, their investment in the Issuer. Depending on the factors discussed below and subject to applicable law and the policies of the Issuer, the Reporting Persons may from time to time acquire additional securities of the Issuer or otherwise dispose of some or all of their securities of the Issuer. Any transactions that the Reporting Persons may pursue may be made at any time and from time to time without prior notice and will depend upon a variety of factors, including, without limitation, current and anticipated future trading prices of the securities of the Issuer, the financial condition, results of operations and prospects of the Issuer, general economic, financial market and industry conditions, other investment and business opportunities available to the Reporting Person, tax and estate planning considerations and other factors.

The descriptions in Item 6 of the LHC Subscription Agreement and of the Offering are incorporated herein by reference.

On October 27, 2016, the Reporting Persons delivered a letter to the Special Committee of the Board of Directors pursuant to which the Reporting Persons proposed a possible business transaction with Loeb Holding Corporation and the Issuer relating to the Issuer's Pet Health Monitoring Business.  The foregoing description of the October 27, 2016 letter is qualified in its entirety by reference to the full text of the letter, a copy of which is attached as Exhibit 99.1 hereto and is incorporated by reference herein.

Other than as described above in this Item 4, the Reporting Persons have no present plan or proposal relating to or that would result in any of the transactions or changes listed in Items 4(a) through 4(j) of Schedule 13D. However, as part of the ongoing evaluation of this investment and investment alternatives, the Reporting Persons may consider such matters and, subject to applicable law and the policies of the Issuer, may formulate a plan with respect to such matters, and, from time to time, may hold discussions with or make formal proposals to management or the Board of Directors of the Issuer (including the independent or disinterested members of the Board of Directors), other stockholders of the Issuer or other third parties regarding such matters.

 

Item 5.  Interest in Securities of the Issuer.

Item 5 is amended and restated in its entirety as follows:

(a)–(b)

The aggregate percentage of Common Stock reported by each person named herein is based upon 23,703,613 shares of Common Stock issued and outstanding, which is the sum of (1) 23,683,613 shares of Common Stock as reported in the Issuer's Quarterly Report on Form 10-Q, filed with the SEC on August 9, 2016 and (2) 20,000 shares of Common Stock which Mr. Kempner has, or will within 60 days of October 27, 2016 have, the right to acquire upon the exercise of stock options which are fully vested, the vesting of RSUs or otherwise.

The Reporting Persons may be deemed to beneficially own an aggregate of 9,735,390 shares of Common Stock (the "Shares").

The Shares beneficially owned by the Reporting Persons represent an aggregate of approximately 41.1% of the outstanding shares of Common Stock.

9,680,541 shares of Common Stock are beneficially owned directly by LHC.  25,750 shares of Common Stock are beneficially owned by Thomas L. Kempner. 20,000 shares of Common Stock are issuable to Mr. Kempner within 60 days of October 27, 2016 upon the exercise of stock options which are fully vested, the vesting of RSUs or otherwise. Mr. Kempner's spouse owns 9,099 shares of which he disclaims beneficial ownership, except to the extent of his pecuniary interest. Mr. Kempner is the beneficial owner of 62.878% of the voting stock of Loeb Holding Corporation and disclaims beneficial ownership of shares of Common Stock held by LHC, except to the extent of his pecuniary interest.

By reason of these relationships, each Reporting Person may be deemed to share the power to vote or direct the vote and to dispose or direct the disposition of the Shares beneficially owned by such Reporting Person as indicated above.

Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission that any of the Reporting Persons is the beneficial owner of the Common Shares referred to herein (other than those shares identified as directly held thereby) for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose, and such beneficial ownership is expressly disclaimed. Each Reporting Person expressly disclaims any assertion or presumption that it and the other persons on whose behalf this statement is filed constitute a "group."

 

Item 7.  Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following Exhibit:

SIGNATURE

After reasonable 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 October 28, 2016

 

	Loeb Holding Corporation
	By:	/s/ Bruce L. Lev
		Name:	Bruce L. Lev
		Title:	Managing Director
	/s/ Thomas L. Kempner
	Thomas L. Kempner

 

 

EXHIBIT INDEX

Exhibit No.	Description
99.1	Letter to the Special Committee of the Board of Directors, dated October 27, 2016

 

                                       

 

Exhibit 99.1

 

[Loeb Holding Corporation Letterhead]

October 27, 2016

Mr. Thomas G. Amato
on behalf of the Special Committee of Intersections Inc.
3901 Stonecroft Boulevard
Chantilly, VA 20151

Dear Tom:

Loeb Holding Corporation ("LHC" or "we") hereby proposes a possible business transaction between LHC and Intersections Inc. (the "Company") relating to the Company's Pet Health Monitoring Segment (the "Voyce Business").  We believe that this proposal will immediately address the significant potential liquidity challenges currently faced by the Voyce Business and support the Company's objective to separate the Company's businesses on a tax efficient basis, while removing the capital dependency of the Voyce Business from the Company's other businesses. We believe that the Company will be in a much stronger position following this transaction, with the balance sheet and financial flexibility to execute its growth strategy and grow its earnings.

We are prepared (a) to immediately loan (the "Bridge Loan") $2.0 million to the Company's subsidiary, i4c Innovations Inc. ("i4c"), so that i4c could meet its immediate cash needs while providing the Special Committee with sufficient time to evaluate our proposal, and (b) to acquire 100% of the equity of i4c on or before January 15, 2017 for a price of $1.00 and the assumption of mutually agreed related obligations plus the right for the Company to receive 10% of the pre-tax profits of the Voyce Business for the next five years (or 10% of the sale proceeds if the Voyce Business is sold within the next 12 months), up to $25 million in the aggregate.  The Bridge Loan would bear interest at a rate of 10% per annum, would be on a secured subordinated basis as may be required by the Company's lender, and would be immediately due and payable upon, among other customary events, the Company entering into an alternative transaction for the Voyce Business.  As additional consideration for the transaction, upon making the Bridge Loan, the Company will issue to us warrants to purchase 2,500,000 shares of common stock at the current market price.

In addition, in order to guarantee that stockholder value is being maximized, our proposal contemplates a customary evaluation process for the Voyce Business for a period following the execution of our agreement.  As we understand the Company and its investment banker are actively seeking a strategic partner for the Voyce Business and believe there could be other parties who are interested in making an investment in the Voyce Business, we would expect, and our proposal is expressly conditioned upon, the Special Committee and its legal and financial advisors working with the Company's existing investment banker. We are eager to move ahead expeditiously and believe it is essential for both the Company and for i4c to do so.

As part of our proposed transaction, we would expect that the Company would retain all of the deferred tax assets (approximately $14.0 million) and other tax related attributes relating to the Voyce Business, and we understand that this transaction might also create an after tax positive benefit for the Company related to certain assets that are written off for GAAP purposes but not for tax purposes.  In addition, we would expect that the Company would continue to provide i4c at no cost with certain agreed upon transition services for up to 12 months and occupancy of the current space used by the Voyce Business until the expiration of the current lease, provided that such obligation shall convert to a paid lease (at the stated rent) in the event of a third-party financing of i4c in excess of $10.0 million. We would expect that each party would be responsible for its own costs and expenses with respect to the transaction, provided that the Company would be obligated to reimburse us for our costs and expenses if the Special Committee recommends an alternative transaction or the Company breaches our agreement.

We believe this transaction will require the consent of, among others, the Company's lender, and we are prepared to start working together immediately with the Special Committee, the Company and management to negotiate mutually satisfactory definitive documents as promptly as reasonably practicable, due to the need to close the transaction before i4c requires further additional capital.

This proposal does not constitute a legal offer or a binding agreement between us. Such an agreement, if any, would be subject to completion of mutual, customary due diligence for a transaction of this nature and negotiation of definitive transaction documents, the terms and conditions of which would have to be approved by the boards of directors of both LHC and the Company. We will not move forward with the transaction unless the transaction is approved by a special committee of the board of directors of the Company that is comprised entirely of directors that are independent of LHC. We do not believe our proposal would require approval from the Company's stockholders. If the special committee of the board of directors of the Company does not approve the proposed transaction, the transaction would not proceed. Please be aware that this proposal is an expression of interest only and is not legally binding, and we reserve the right to withdraw or modify our proposal at any time and for any purpose. Please also note that we believe we will need to file an amendment to our beneficial ownership report on Schedule 13D disclosing the submission of this letter to the extent required by applicable SEC rules.

We believe our proposal presents a compelling opportunity for all of the Company's stockholders and look forward to your response. We are, and will remain, the single, largest stockholder of the Company and are personally committed to overseeing the successful separation of the Voyce Business from the Company. We are available at your convenience to discuss any aspect of the proposed transaction.

	Sincerely,
	/s/ Bruce L. Lev
	Bruce L. Lev Managing Director