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

 

SCHEDULE 13D/A

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED

PURSUANT TO § 240.13d-2(a)

(Amendment No. 2)

 

Under the Securities Exchange Act of 1934

 

(Name of Issuer)

 

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires the Filing of this Statement)

 

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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: o

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) 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 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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Explanatory Note

 

This Amendment No. 2 amends and supplements the Schedule 13D filed with the Securities and Exchange Commission on February 22, 2016, as amended on July 21, 2016 (together, the “Schedule 13D”), by Vajra Fund III, LLC, a Delaware limited liability company, Vajra Asset Management, LLC, a Delaware limited liability company and Michael Brodsky (together, collectively referred to herein as the “Reporting Persons”).  The Schedule 13D relates to the Common Stock, par value $0.001 of Angie’s List, Inc., a Delaware corporation (the “Issuer”).

 

Item 4.                                                         Purpose of Transaction.

 

Item 4 of the Schedule 13D is hereby amended by adding the following:

 

On October 13, 2016, Vajra Fund III, LLC sent a letter (the “Letter”) to the Board of Directors of the Issuer (the “Board”), supporting the resignation of each of Mr. John H. Chuang, former Chairman of the Board, and Mr. Steven M. Kapner, former member of the Board (as disclosed in the Issuer’s Form 8-K filed with the Securities and Exchange Commission on October 7, 2016) and the reduction in the size of the Board from 12 to 10 members.  Vajra Fund III, LLC had initially proposed the resignation of Messrs. Chuang and Kapner and the reduction in the size of the Board in a letter dated July 21, 2016 sent by Vajra Fund III, LLC to the Board.  Vajra Fund III, LLC also expressed support for the appointment of Mr. Thomas Evans as Chairman of the Board.

 

In addition, in the Letter Vajra Fund III, LLC asked that the Issuer eliminate the policy that allows Board members to pledge the Issuer’s securities as collateral to secure or guarantee indebtedness and the Issuer’s staggered board election policy.

 

A copy of the Letter is attached hereto as Exhibit 3 and is incorporated herein by reference.

 

Other than as discussed above, none of the Reporting Persons currently has any other plans or proposals that would result in or relate to any of the transactions or changes listed in Items 4(a) through 4(j) of Schedule 13D.  However, as part of their ongoing evaluation of investment and investment alternatives, the Reporting Persons may consider such matters and, subject to applicable law, may formulate a plan with respect to such matters or make formal proposals to management or the board of directors of the Issuer, other stockholders of the Issuer or other third parties regarding such matters.  The Reporting Persons reserve the right to acquire additional securities of the Issuer in the open market, in privately negotiated transactions (which may be with the Issuer or with third parties) or otherwise, to dispose of all or a portion of their holdings of securities of the Issuer, to engage in any hedging or similar transaction with respect to the securities or to change their intention with respect to any or all of the matters referred to in this Item 4.

 

Item 7.                                                         Materials to be Filed as Exhibits.

 

Exhibit 1                                               Joint Filing Agreement dated as of February 22, 2016 (previously filed as an exhibit to the Schedule 13D filed on February 22, 2016).

 

Exhibit 2                                               Letter from Vajra Fund III, LLC to the Board of Directors of Angie’s List, Inc. dated July 21, 2016 (previously filed as an exhibit to Amendment No. 1 to the Schedule 13D filed on July 21, 2016).

 

Exhibit 3                                               Letter from Vajra Fund III, LLC to the Board of Directors of Angie’s List, Inc. dated October 13, 2016.

 

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SIGNATURES

 

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.

 

Date: October 13, 2016

 

VAJRA FUND III, LLC

 

By:	Vajra Asset Management, LLC, its manager
By:	/s/ Michael Brodsky
Name:	Michael Brodsky
Title:	Managing Member
VAJRA ASSET MANAGEMENT, LLC
By:	/s/ Michael Brodsky
Name:	Michael Brodsky
Title:	Managing Member
MICHAEL BRODSKY
/s/ Michael Brodsky

 

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Exhibit 3

 

 

October 13, 2016

 

Angie’s List, Inc.

1030 E. Washington Street

Indianapolis, IN 46202
Attention: Members of the Board of Directors

 

Re: Corporate Governance Issues

 

Dear Members of the Board of Directors:

 

Vajra Fund III, LLC, a shareholder of Angie’s List, Inc. (the “Company”) that beneficially owns 5,322,563 shares of the Company’s common stock as of the date of this letter, which represents approximately 9.1% of all outstanding shares of the Company, is writing to you to share our views on the recent changes to the composition of the Board of Directors of the Company (the “Board”).

 

1.              Our view of recent actions

 

We view the recent resignations of Mr. John H. Chuang, former the Chairman of the Board, and Mr. Steven M. Kapner, former member of the Board, as positive developments from the perspective of the Company’s shareholders. As you know, our letter to the Board dated July 21, 2016 actively sought those resignations among other changes. Messrs. Chuang and Kapner, who beneficially own nearly 20% of the Company’s outstanding shares, had pledged nearly all of their Company holdings to secure various debt obligations. We believe those pledges exposed the Company and its shareholders to needless and unreasonable risk.

 

We are also pleased by the recent reduction of the Board size from 12 directors to 10 and we wholeheartedly approve of the appointment of Mr. Thomas Evans as Chairman of the Board, an experienced and pragmatic business leader. As we pointed out previously, a 12-member board was too large for a business the size of the Company. Oversized boards often lack sufficient accountability and make poor decisions. We are happy to see that the Board’s size has been reduced.

 

2.              Additional actions needed

 

While our advocacy appears to have led to both the resignation of Messrs. Chuang and Kapner and a reduction in the size of the Board, we continue to urge the following additional changes to the Company’s corporate governance practices, which we believe will further restore confidence in the Board, protect shareholder value and help to realize the Company’s excellent business prospects.

 

 

a)             The Company should eliminate the policy that allows Board members to pledge the Company’s securities as collateral to secure or guarantee indebtedness.

 

Although the recent Board resignations addressed the immediate issue of shares of the Company pledged by Messrs. Chuang and Kapner, the Company should take the additional step required to prevent a recurrence of this type of issue. The policy that allows the pledging of Company shares by members of its Board should be changed immediately and that change should be communicated to all investors.

 

b)             The Company should eliminate its policy of electing Board members on a staggered basis.

 

We continue to believe the Company’s policy providing for staggered Board elections supports entrenchment of directors and shields them from accountability to the Company’s shareholders. Eliminating staggered Board elections would improve the responsiveness of Board members to the Company’s shareholders and hold such Board members accountable for poor decision-making. The Company should provide that each member of the Board serves a one-year term and stands for re-election every year.

 

3.              The Company’s excellent business prospects

 

We invested in the Company because we are very optimistic about the prospects of the Company. By opening up features of its website to members free of charge, the Company has the opportunity to monetize the significant traffic attracted organically by its well-known brand and sterling reputation — a competitive advantage enjoyed by no other business in this market today.  Simply put, no competitor can match the brand value of the Company.

 

As management has reported, the Company receives approximately 100 million unique visits annually, and for many years the vast majority of that Internet traffic has been bouncing off the pay wall un-monetized.  Going forward, these home-owning consumers will be converted into qualified leads with well-established economic value.  We also think the Company is on the right track by presenting a set of compelling paid membership offers to inbound consumers who want premium access and services, thereby allowing the Company to preserve and grow its membership revenue line even after the pay wall is gone.

 

Most importantly, we believe that of the more than half a million non-participating service providers who currently benefit from the Company without paying, many will choose to engage as participating members with the new platform.  This development will boost revenue and profitability while assisting service providers to better serve the Company’s members.

 

 

Continued execution of management’s ambitious business plan will likely lead to a variety of strategic opportunities. As a result of the recent changes to the Board, the Company is now in a better position to evaluate and capture such opportunities as they arise.

 

Thank you.

 

Vajra Fund III, LLC

 

 

/s/ Michael Brodsky

 

 

Michael Brodsky

Managing Partner