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): July 2, 2020
CCUR Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-37706 | 04-2735766 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 6470 East Johns Crossing, Suite 490, Duluth, Georgia | 30097 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (770) 305-6434
Not Applicable
(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 communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbols | Name on exchange which registered |
| None |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 8.01. | Other Events |
On July 2, 2020 (the “Effective Date”), CCUR Holdings, Inc. (the “Company”) entered into a letter of intent (the “LOI”) proposing to provide a secured loan of up to $10 million to SeaChange International, Inc. (“SeaChange”). Among other things, the proposed loan would be fully secured by a first lien on assets of SeaChange, have a term of one year with two options to extend the term for an additional six months, and carry an interest rate of ten percent (10%) per annum on the outstanding principal amount of the loan. Upon closing of the loan, SeaChange would pay a three percent (3%) commitment fee to the Company with the option to pay up to fifty percent (50%) of the fee in SeaChange common stock and a two percent (2%) fee upon the exercise of any six month extension of the loan term. The LOI is binding subject to several closing conditions including the negotiation of definitive loan documents and final approval of the Company’s Board of Directors. The LOI will expire sixty (60) days from the Effective Date unless extended by mutual agreement of the parties.
As two of its members have relationships involving SeaChange, the Company’s board of directors is presently evaluating the nature of those relationships prior to approving any documentation related to the transactions proposed in the LOI. More specifically, Company director Robert Pons also sits on the board of directors of SeaChange, and has thus recused himself from any deliberations by the Company’s board of directors relating to the LOI and the transactions proposed thereby. In addition, TAR Holdings, LLC, an entity over which Karen Singer holds sole voting and dispositive power, owns 16.6% of SeaChange’s outstanding common stock, according to that certain Schedule 13D/A filed with the Securities and Exchange Commission by Ms. Singer on August 12, 2019. Ms. Singer is the sister-in-law of Company director, Steven Singer. Accordingly, Mr. Singer has also recused himself from any deliberations by the Company’s board of directors relating to the LOI and the transactions proposed thereby.
The foregoing description of the LOI does not purport to be complete and is qualified in its entirety by reference to the full text of the LOI, which is furnished as Exhibit 99.1 hereto.
The information contained in this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The furnishing of the information in this Current Report on Form 8-K is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information contained in this Current Report on Form 8-K constitutes material investor information that is not otherwise publicly available.
The Securities and Exchange Commission encourages registrants to disclose forward-looking information so that investors can better understand the future prospects of a registrant and make informed investment decisions. This Current Report on Form 8-K and exhibits may contain these types of statements, which are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and which involve risks, uncertainties and reflect the Company’s judgment as of the date of this Current Report on Form 8-K. Forward-looking statements may relate to, among other things, operating results and are indicated by words or phrases such as “expects,” “should,” “will,” and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this Current Report on Form 8-K. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented within.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
|
Exhibit No. |
Description |
| 99.1 | Letter between CCUR Holdings, Inc. and SeaChange International, Inc. dated July 2, 2020. |
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.
| Date: July 9, 2020 | CCUR HOLDINGS, INC. | |
| By: | /s/ Igor Volshteyn | |
| Name: Igor Volshteyn Title: Chief Operating Officer and President | ||
Exhibit 99.1
CCUR HOLDINGS, INC.
July 2, 2020
Yossi Aloni
Chief Executive Officer
SeaChange International, Inc.
500 Totten Pond Road, Suite 400
Waltham, MA 02451
Dear Yossi:
CCUR Holdings, Inc. (“CCUR”) is pleased to provide you with this financing proposal to enhance the liquidity profile of SeaChange International, Inc.
As previously discussed, CCUR is interested in providing a First Lien Senior Secured Term Loan (“the Loan”) in an amount of up to $10,000,000. Please find an outline of the key terms below. We look forward to working with you and your team.
Summary of Terms:
| Borrower(s): |
SeaChange International, Inc. (“SeaChange”)
|
| Guarantors: |
All material U.S. subsidiaries to the extent allowed
|
| Lender: |
CCUR Holdings, Inc.
|
| Maximum Credit: |
Up to $10,000,000 First Lien Senior Secured Term Loan
|
| Use of Proceeds: |
Funds will be used for general corporate purposes and working capital
|
|
Collateral:
|
As collateral for the Loan, the Borrower and Guarantors will pledge all available domestic assets of each Borrower and Guarantor and will pledge one-third of the shares for each of the U.S. entities direct foreign subsidiaries; the parties agreed that SeaChange will not have to create or perfect the pledges under any foreign laws
|
| Borrowing Base: |
The Borrowing Base shall be calculated based on eligible cash and eligible accounts receivables
|
|
Term:
|
Initial term of one year from the closing of the Loan, which may be extended, only on Borrower’s request and with CCUR’s agreement, for up to two (2) six-month periods
|
| Interest Rate: |
The interest rate shall equal ten percent (10%) per annum on the outstanding principal amount of the Loan; interest shall be payable quarterly in arrears in cash
|
| Commitment Fee: |
Borrower shall pay a one-time commitment fee of three percent (3%) of the Loan amount, in cash or up to fifty percent (50%) in SeaChange common stock at SeaChange’s discretion, to Lender upon the signing of definitive loan documents |
CCUR Holdings, Inc. | 6470 East Johns Crossing | Ste 490 | Duluth, GA 30097
| Extension Fee: |
Each six month extension shall carry a fee equal to two percent (2%) of the Loan amount
|
| Expense Reimbursement: |
The Borrower agrees to pay all reasonable, customary, documented, and out-of-pocket fees and expenses incurred by the Lender in connection with the Loan as Lender may reasonably request from time to time, up to a maximum of $15,000 for this letter of intent and initial loan documentation
|
|
Representations & Warranties:
|
Standard representations and warranties for a transaction of this nature
|
| Conditions to Close: |
Subject to completion of definitive loan documents that will include standard and customary terms used in similar financing arrangements and the absence of any material changes in SeaChange’s business
|
| Covenants: |
No extraordinary covenants outside of standard and customary covenants used in similar financing arrangements shall be necessary
|
| Events of Default: |
Standard events of default for a transaction of this nature, including but not limited to non-payment, cross-default, insolvency, misrepresentation and unlawfulness
|
| Closing Date: |
Within forty-five (45) days of SeaChange’s request to draw down on the Loan or at a mutually agreeable earlier date
|
| Third Party Beneficiaries: |
Nothing herein is intended or shall be construed to confer upon any person or entity other than the parties and their successors or assigns, any rights or remedies under or by reason of this letter of intent |
If SeaChange is in agreement with these terms and conditions, CCUR will proceed with preparing the loan documents outlining the final terms and conditions.
Your execution of this proposal will signify your agreement to pay all costs, fees and expenses incurred by CCUR in connection with the proposed Loan and this proposal whether or not the proposed Loan is approved or closed, including all legal and due diligence expenses, subject to the cap specified above.
This letter of intent is binding subject to the completion of definitive loan documents and that, ultimately, the final form of our agreement will be set forth conclusively in a legal contract signed by all parties. This is also subject to final approval by our Board of Directors, which will be sought simultaneously with the signing of definitive loan documents. This letter of intent shall expire sixty (60) days from July 2, 2020, but may be extended for additional periods if mutually agreed by CCUR and SeaChange.
CCUR Holdings, Inc. | 6470 East Johns Crossing | Ste 490 | Duluth, GA 30097
No public disclosure or announcement shall be made concerning this letter or the transactions contemplated herein without prior consent of the other party, except as otherwise required by any law or regulation or any regulatory authority, which shall include, but is not limited to, the Securities and Exchange Commission, NASDAQ stock exchange and OTC Market. Such consent shall not be unreasonably withheld or delayed. During the term of this letter, the parties shall continue to abide by the terms of the Mutual Confidentiality Agreement dated June 22, 2020 executed by the parties.
This letter and the terms herein shall be governed by and construed and enforced in accordance with the laws of Delaware. Each of the parties hereby submits to the exclusive jurisdiction of the courts in Delaware. Neither party will be entitled to incidental, consequential or punitive damages with respect to any claims related to this letter.
IN WITNESS WHEREOF, the undersigned has duly executed this Term Sheet as of the date below.
|
AGREED TO AND ACCEPTED BY:
SeaChange International, Inc.
By: /s/Yossi Aloni Name: Yossi Aloni Title: Chief Executive Officer Date: 7/2/20 |
AGREED TO AND ACCEPTED BY:
CCUR Holdings, Inc.
By: /s/ Igor Volshteyn Name: Igor Volshteyn Title: President and COO Date: 7/2/20 |
CCUR Holdings, Inc. | 6470 East Johns Crossing | Ste 490 | Duluth, GA 30097