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LTNR > SEC Filings for LTNR > Form 8-K on 30-Apr-2014All Recent SEC Filings

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Form 8-K for LOTON, CORP


30-Apr-2014

Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition


Item 1.01 Entry into a Material Definitive Agreement

Merger Agreement

On April 28, 2014, Loton, Corp., a Nevada corporation (the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among the Company, Loton Acquisition Sub I, Inc., a Delaware corporation ("Acquisition Sub") and KoKo (Camden) Holdings (US), Inc. ("KoKo Parent"), a Delaware corporation and wholly-owned subsidiary of JJAT Corp. ("JJAT"), a Delaware corporation wholly-owned by Robert Ellin, the Company's Chief Executive Officer, Director and controlling shareholder ("Mr. Ellin"), and his affiliates (the "Merger"). As a result of the Merger, KoKo Parent became a wholly-owned subsidiary of the Company, and the Company's primary business became that of KoKo Parent and its subsidiaries, KoKo (Camden) Limited, a private limited company registered in England and Wales ("KoKo UK") which owns 50% of OBAR Camden Holdings Limited, a private limited company registered in England and Wales ("OCHL") which in turn wholly-owns its operating subsidiary OBAR Camden Limited, a private limited company registered in England and Wales ("OCL"). Upon the closing of the Merger, pursuant to the terms of the Merger Agreement, KoKo Parent's former sole shareholder, JJAT Corp., received 29,000,000 shares of Loton, Corp common stock ("Company Common Stock"), or approximately 73.9% of the shares of the Company outstanding post-merger. The shares of Company Common Stock were issued pursuant to Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933. The shares are unregistered, restricted stock bearing a restrictive legend.

The material terms of the Merger Agreement are described more fully in Item 2.01 of this Current Report on Form 8-K. The information therein is hereby incorporated into this Item 1.01 by reference.

Variation to Shareholder Agreement

On April 25, 2014, the Company entered into a Variation to Shareholder Agreement with Olly Bengough, an individual residing in the United Kingdom ("Bengough") and KoKo Parent, described more fully in Item 2.01 of this Current Report on Form 8-K under the heading "The OCHL Shareholders Agreement" (the "Variation Agreement") pursuant to which Mr. Bengough agreed, subject to Mr. Bengough's receipt of satisfactory tax clearances under the tax laws of the United Kingdom, to transfer all shares of OCHL held by him to the Company in exchange for 29,000,000 shares of Company Common Stock, or approximately 42.5% of the shares of the Company outstanding post-exchange (including giving effect to the Merger described above) with the result that upon closing of that transaction, OCHL would become a wholly-owned subsidiary of our wholly-owned subsidiary, KoKo UK. The shares of Company Common Stock would be issued pursuant to Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933. The shares would be unregistered, restricted stock bearing a restrictive legend.



Item 2.01 Completion of Acquisition or Disposition of Assets.

The Merger and Related Transactions

As described in Item 1.01 above, on April 28, 2014, the Company acquired KoKo Parent and its wholly-owned subsidiary, KoKo UK which owns 50% of the capital stock of OCHL. OCHL wholly-owns OCL, a music and entertainment company whose principal business is the operation of a live music venue and nightclub known as KOKO located in Camden, London. The following sets forth information about the agreements and events relating to the acquisition.

The Share Purchase Agreement and Minority Share Purchase Agreement

On February 13, 2014, KoKo UK entered into a Share Purchase Agreement (the "Share Purchase Agreement") with Alex Rutherford, an individual residing in the United Kingdom (the "Seller"), pursuant to which KoKo UK acquired 47.475% of the outstanding ordinary shares of OCHL owner of OCL, for 1,104,250 at the closing and 1,318,250 in deferred consideration, subject to working capital adjustments. The closing of the Share Purchase Agreement occurred on February 13, 2014. The deferred consideration was paid on April 28, 2014, and the working capital adjustment is expected to be paid shortly.

On February 13, 2014, KoKo UK entered into a Share Purchase Agreement (the "Minority Share Purchase Agreement") with Hugh Doherty and Laurence Seymour, each an individual residing in the United Kingdom (collectively, the "Minority Sellers"), pursuant to which (i) KoKo UK, and, at KoKo UK's direction, JJAT, each acquired 2.525% of the outstanding ordinary shares and 50% of the outstanding deferred shares of OCHL for an aggregate of 255,002 paid by KoKo UK, and (ii) Oliver Bengough agreed to purchase from JJAT its 2.525% of the outstanding ordinary shares and the outstanding deferred shares of OCHL on April 24, 2014 (the "Bengough Minority Share Purchase Agreement"). The closing of the Minority Share Purchase Agreement and the Bengough Minority Share Purchase Agreement occurred on April 28, 2014 and, at that time, Mr. Bengough purchased from JJAT its 2.525% of the outstanding ordinary shares and the outstanding deferred shares of OCHL. Mr. Bengough purchased the shares from JJAT for a promissory note in the principal amount of 127,501 (the "Bengough Promissory Note"). All debt owed from KoKo UK to JJAT (approximately $1,533,333) was converted to equity in KoKo UK effective April 25, 2014, and JJAT indirectly owned 100% of KoKo UK on such date.

The Share Purchase Agreement and the Minority Share Purchase Agreement include certain representations, warranties and covenants made by KoKo UK and KoKo UK's obligations of performance thereunder are guaranteed by Trinad Capital Master Fund, Ltd., a fund controlled by Mr. Ellin ("Trinad Capital"), Mr. Bengough and OCL. The assertions embodied in the representations and warranties were made solely for purposes of the Share Purchase Agreement and Minority Share Purchase Agreement, directly, and are not intended to provide factual, business, or financial information about Loton, OCHL, OCL or any other party to the Share Purchase Agreement or Minority Share Purchase Agreement. The guarantees under each agreement were made solely for purposes of such agreement and are not intended to guarantee any obligations other than as reflected in the terms thereof. Moreover, some of those representations and warranties (i) may not be accurate or complete as of any specified date, (ii) may be subject to a contractual standard of materiality different from those generally applicable to . . .



Item 3.02 Unregistered Sales of Equity Securities.

Reference is made to the disclosures set forth in Items 1.01 and 2.01 of this Current Report on Form 8-K, which disclosures are incorporated by reference into this Item 3.02.



Item 5.01 Changes in Control of Registrant.

Reference is made to the disclosures set forth in Items 1.01 and 2.01 of this Current Report on Form 8-K, which disclosures are incorporated by reference into this Item 5.01. Other than the transactions and agreements described such Items, our officers and directors know of no arrangements that may result in a change in control of the Company at a subsequent date.



Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with the Acquisition, Oliver Bengough has been appointed to the Board of Directors of the Company and as the Company's Interim Chief Executive Officer, effective May 1, 2014. Reference is made to the disclosures set forth in Item 2.01 of this Current Report on Form 8-K, relating to Mr. Bengough which disclosures are incorporated by reference into this Item 5.02.



Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
Year.

On April 25, 2014, the stockholders of the Company voted, following the recommendation of the Board of Directors, to amend the bylaws of the Company to allow corporate action by written consent of the Board of Directors and to provide for expanded indemnification of the Company's directors under the laws of the State of Nevada. The stockholders also adopted a form of indemnification agreement for the Company's directors.

The First Amendment to the Bylaws of the Company are attached hereto as Exhibit 3.3 and the Form of Indemnification Agreement is attached hereto as Exhibit 10.14 and incorporated herein by reference.



Item 5.06 Change in Shell Company Status.

We have determined that, as the result of the closing of the Merger Agreement as described above under Item 2.01 of this Current Report on Form 8-K, we have ceased to be a shell company as that term is defined in Rule 12b-2 promulgated under the Exchange Act. Reference is made to the disclosures set forth in Item 2.01 of this Current Report on Form 8-K, which disclosures are incorporated by reference into this Item 5.06.



Item 9.01 Financial Statements and Exhibits.

Reference is made to the shares of OCHL acquired under the Merger Agreement, as described in Item 2.01, which is incorporated herein by reference. As a result of the closing of the Merger Agreement, our primary operations consist of the business and operations of OCHL. Accordingly, we are presenting the financial statements of OCHL for the nine months ended December 31, 2013 and 2012, and for the fiscal years ended March 31, 2013 and 2012 after giving effect to the acquisition of OCHL by the Company.

(a) Financial statements of business acquired.

The audited financial statements of OCHL as of and for the fiscal years ended March 31, 2013 and 2012, and the unaudited financial statements of OCHL for the nine months ended December 31, 2013 and 2012, including the notes to such financial statements, are incorporated herein by reference to Exhibits 99.1 and 99.2 of this Current Report on Form 8-K.

(b) Pro forma financial information.

The unaudited pro forma financial information of the Company and its 50%-owned subsidiary OCHL are incorporated herein by reference to Exhibit 99.3 of this Current Report on Form 8-K.

(c) Shell company transactions.

Reference is made to the disclosure set forth in Items 9.01(a) and 9.01(b), which disclosure is incorporated herein by reference.

(d) Exhibits.

 Exhibit     Description

   2.1       Agreement and Plan of Merger, dated April 28, 2014, by and among the
             Company, Loton Acquisition Sub I, Inc. and KoKo Camden Holdings
             (US), Inc. *

   3.1       Articles of Incorporation of the Company (previously filed as
             Exhibit 3.1 to the Registrant's Registration Statement on Form S-1,
             filed with the SEC on June 1, 2010, and incorporated herein by
             reference).

   3.2       Bylaws of the Company (previously filed as Exhibit 3.2 to the
             Registrant's Registration Statement on Form S-1, filed with the SEC
             on June 1, 2010, and incorporated herein by reference).

   3.3       Amendment to Bylaws of the Company dated April 24, 2014*

   4.1       Senior Promissory Note, dated April 28, 2014 between OCHL as
             Promisor and JJAT as Payee*

   4.2       Promissory Note, dated April 28, 2014 between OCHL as Promisor and
             the Company as Payee*

   4.3       Form of Warrant, dated September 23, 2011 issued to Trinad
             Management, LLC (previously filed as Exhibit 10.1 to the
             Registrant's Current Report on Form 8-K, filed with the SEC on
             September 28, 2011, and incorporated herein by reference).

   4.4       Form of Note, dated April 2, 2012, issued by Loton, Corp to Trinad
             Master Fund, Ltd. (previously filed as Exhibit 10.3 to the
             Registrant's Annual Report on Form 10-K, filed with SEC on August
             15, 2012, and incorporated herein by reference).

   4.5       Form of Note, dated June 21, 2012, issued by Loton, Corp to Trinad
             Master Fund, Ltd. (previously filed as Exhibit 10.3 to the
             Registrant's Annual Report on Form 10-K, filed with SEC on August
             15, 2012, and incorporated herein by reference).

   10.1      Share Purchase Agreement relating to OCHL, dated February 13, 2014
             among Alex Rutherford and KoKo (Camden) Limited and certain
             Guarantors.*

   10.2      Share Sale Agreement relating to shares in OBAR Camden Holdings
             Limited, dated February 13, 2014 among Hugh Doherty and Laurence
             Seymour and KoKo (Camden) Limited and certain Guarantors.*

   10.3      Shareholders Agreement, dated February 12, 2014, in relation to OCHL
             between Oliver Bengough and KoKo (Camden) Limited and Robert Ellin
             and OCHL and Trinad Capital Master Fund Limited.*

   10.4      Deed of Reimbursement, dated February 2014 amongst KoKo (Camden)
             Limited, Alex Rutherford, Oliver Bengough, Hugh Doherty and Laurence
             Seymour and Mint Group Holdings Limited.*

   10.5      Deed of Subordination, dated February 2014 amongst Alex Rutherford,
             Hugh Doherty and Laurence Seymour and KoKo (Camden) Limited and
             Trinad Capital Master Funds, Ltd. and JJAT Corp.*

   10.6      Variation to Shareholders Agreement, dated April 24, 2014, among
             Oliver Bengough, Koko (Camden) Limited, Robert Ellin, Trinad Capital
             Master Fund LTD, Obar Camden Holdings Limited, Obar Camden Limited,
             JJAT Corp. and the Company*

   10.7      Share Purchase Agreement relating to certain shares of Obar Camden
             Holdings Limited dated April 24, 2014 between JJAT Corp and Oliver
             Bengough*

   10.8      Share Charge in respect of Ordinary Shares of Obar Camden Holdings
             Limited, dated April 24, 2014 between Oliver Bengough and JJAT
             Corp.*

   10.9      Promissory Note, dated April 24, 2014 between Oliver Bengough as
             Promisor and KoKo (Camden) Limited as Payee.*

  10.10      Promissory Note, dated April 24, 2014 between Oliver Bengough as
             Promisor and JJAT Corp. as payee.*

  10.11      Reimbursement Agreement, effective as of January 29, 2014, between
             JJAT Corp. and Loton, Corp (previously filed as Exhibit 10.2 to the
             Registrant's Current Report on Form 8-K, filed with the SEC on March
             6, 2014 and incorporated herein by reference). *

  10.12      Termination of Reimbursement Agreement, dated April 25, 2014 by and
             between JJAT Corp. and Loton, Corp.*

  10.13      Contribution Agreement, dated April 24, 2014 between JJAT Corp. and
             KoKo (Camden) Holdings (US), Inc.*

  10.14      Form of Director Indemnification Agreement*

  10.15      Form of Securities Purchase Agreement, dated September 11 and
             September 20, 2012, between the Company and certain investors
             (previously filed as Exhibit 10.1 to the Registrant's Quarterly
             Report on Form 10-Q, filed with the SEC on December 12, 2012, and
             incorporated herein by reference).

  10.16      Form of Restricted Stock Agreement (previously filed as Exhibit 10.4
             to the Registrant's Quarterly Report on Form 10-Q, filed with the
             SEC on March 21, 2013, and incorporated herein by reference).

  10.17      Form of Advisory Board Agreement (previously filed as Exhibit 10.5
             to the Registrant's Quarterly Report on Form 10-Q, filed with the
             SEC on March 21, 2013, and incorporated herein by reference)

  10.18      Form of Consulting Agreement (previously filed as Exhibit 10.6 to
             the Registrant's Quarterly Report on Form 10-Q, filed with the SEC
             on March 21, 2013, and incorporated herein by reference).

  10.19      Secured Convertible Note Purchase Agreement, dated as of March 25,
             2013, between the Company and Penzance, LLC, d/b/a Acheven, LLC
             (previously filed as Exhibit 10.12 to the Registrant's Annual Report
             on Form 10-K, filed with the SEC on July 29, 2013).

  10.20      Secured Convertible Note, dated as of March 25, 2013, between the
             Company and Penzance, LLC, d/b/a Acheven, LLC (previously filed as
             Exhibit 10.13 to the Registrant's Annual Report on Form 10-K, filed
             with the SEC on July 29, 2013).

  10.21      Security Agreement, dated as of March 25, 2013, among Penzance, LLC,
             Investors and the Company (previously filed as Exhibit 10.14 to the
             Registrant's Annual Report on Form 10-K, filed with the SEC on July
             29, 2013).

  10.22      Form of Promissory Notes dated May 13, May 23, June 17 and July 3,
             2013 (previously filed as Exhibit 10.1 to the Registrant's Current
             Report on Form 8-K, filed with the SEC on July 29, 2013, and
             incorporated herein by reference)

  10.23      Form of Note Extension Agreement dated July 15, 2013 (previously
             filed as Exhibit 10.2 to the Registrant's Current Report on Form
             8-K, filed with the SEC on July 29, 2013, and incorporated herein by
             reference)

  10.24      Securities Purchase Agreement, dated August 28, 2013 between Sandor
             Capital Master Fund and the Company (previously filed as Exhibit
             10.1 to the Registrant's Quarterly Report on Form 10-Q, filed with
             the SEC on September 16, 2013, and incorporated herein by reference)

  10.25      Advisory Board Consulting Agreement, dated August 30, 2013
             (previously filed as Exhibit 10.2 to the Registrant's Quarterly
             Report on Form 10-Q, filed with the SEC on September 16, 2013, and
             incorporated herein by reference)

  10.26      Employment Agreement effective as of October 1, 2013 between Barry
             Regenstein and Loton, Corp. (previously filed as Exhibit 10.1 to the
             Registrant's Current Report on Form 8-K, filed with the SEC on
             November 6, 2013, and incorporated herein by reference).

  10.27      Advisory Board Agreement, effective as of October 1, 2013, by and
             between Barry Regenstein and Loton, Corp. (previously filed as
             Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed
             with the SEC on November 6, 2013, and incorporated herein by
             reference).

  10.28      Stock Purchase Agreement, dated as of September 19, 2013 (previously
             filed as Exhibit 10.3 to the Registrant's Quarterly Report on Form
             10-Q, filed with the SEC on December 16, 2013, and incorporated
             herein by reference).

  10.29      Stock Purchase Agreement, dated as of October 7, 2013 (previously
             filed as Exhibit 10.4 to the Registrant's Quarterly Report on Form
             10-Q, filed with the SEC on December 16, 2013, and incorporated
             herein by reference)

  10.30      Stock Purchase Agreement, dated as of October 8, 2013 (previously
             filed as Exhibit 10.5 to the Registrant's Quarterly Report on Form
             10-Q, filed with the SEC on December 16, 2013, and incorporated
             herein by reference)

  10.31      Stock Purchase Agreement, dated as of October 30, 2013 (previously
             filed as Exhibit 10.6 to the Registrant's Quarterly Report on Form
             10-Q, filed with the SEC on December 16, 2013, and incorporated
             herein by reference)

   21.1      List of Subsidiaries*

   99.1      Consolidated Financial Statements of OBAR Camden Holdings Limited as
             of and for the year ended March 31, 2013 and March 31, 2012*

   99.2      Consolidated Financial Statements of OBAR Camden Holdings Limited as
             of and for the nine months ended December 31, 2013 and 2012*

   99.3      Pro Forma Combined Financial Information of Loton, Corp. as of
             January 31, 2014 and April 30, 2013*

*Filed Herewith

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report are as follows:

(1) Financial Statements and Report of Independent Registered Public Accounting Firm

(2) Financial Statement Schedules

None required.

(3) Exhibits:

The exhibit list required by this item is incorporated by reference to the Exhibit Index included in this Current Report on Form 8-K.

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