The Reporting Person previously filed Amendment No. 1 with respect to the reportable event occurring on August 16, 2011. This Amendment corrects the Reporting Person’s beneficial ownership percentage reflected in Amendment No. 1 and brings current the information contained in the Schedule 13D.
Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D relates is the Common Stock of the Company. The principal executive offices of the Company are located at 17855 North Dallas Parkway, Suite 400, Dallas, Texas 75287.
Item 2. Identity and Background.
The name of the person filing this statement is VSS-Cambium Holdings III, LLC, a Delaware limited liability company (the “Reporting Person”). The address of the principal office of the Reporting Person is c/o Veronis Suhler Stevenson, 55 East 52nd Street, 33rd Floor, New York, New York 10055. The Reporting Person is a holding company principally engaged in the business of holding and investing in the Company’s equity securities.
Set forth in Schedule A annexed hereto, which is incorporated herein by reference, is the information required by Item 2 of Schedule 13D for each executive officer and controlling person of the Reporting Person as of the date hereof.
During the past five years, neither the Reporting Person nor, to the knowledge of the Reporting Person, any person named in Schedule A hereto, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the past five years, neither the Reporting Person nor, to the knowledge of the Reporting Person, any person named in Schedule A hereto, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person or entity was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On December 8, 2009, the effective time of the Mergers defined and described in Item 4 hereof (the “Effective Time”), the Reporting Person purchased 3,846,154 shares of Common Stock from the Company for an aggregate purchase price of $25 million, using funds from the working capital of the Reporting Person.
In connection with the Cambium Merger (as such term is defined in Item 4 hereof), which was consummated on December 8, 2009, the Reporting Person, as the sole stockholder of VSS-Cambium Holdings II Corp., a Delaware corporation (“Cambium”), immediately prior to the Mergers, received the following consideration in exchange for the 24,209,264 shares of common stock of Cambium that were issued and outstanding immediately prior to the Mergers: (i) 20,491,870 shares of Common Stock; (ii) a warrant to purchase shares of Common Stock; and (iii) certain subscription, preemptive and other rights pursuant to the terms of a stockholders agreement entered into in connection with the Mergers. See Item 6 of this Schedule 13D for additional information regarding the issuance of this consideration and the stockholders agreement.
As described in Item 5 of this Schedule 13D, the Reporting Person exercised in full the subscription right referenced in the preceding paragraph as of August 16, 2011. All funds used to purchase the Subscription Shares (as such term is defined in Item 5 hereof) on behalf of the Reporting Person came from the capital contributions of certain of its members.
Item 4. Purpose of Transaction.
Immediately prior to the mergers described in that certain Agreement and Plan of Mergers, dated as of June 20, 2009 (the “Merger Agreement”), by and among the Company, Voyager Learning Company, a Delaware corporation (“Voyager”), Vowel Acquisition Corp., a Delaware corporation (“Vowel Merger Sub”), Cambium, Consonant Acquisition Corp., a Delaware corporation (“Consonant Merger Sub”), and Vowel Representative, LLC, a Delaware limited liability company (the “Stockholders’ Representative”), the Reporting Person was the sole stockholder of Cambium. Pursuant to the terms of the Merger Agreement, Consonant Merger Sub, a wholly owned subsidiary of the Company, merged with and into Cambium, with Cambium surviving the merger and becoming a wholly owned subsidiary of the Company (the “Cambium Merger”). In addition, pursuant to the terms of the Merger Agreement, Vowel Merger Sub, a wholly owned subsidiary of the Company, merged with and into Voyager, with Voyager surviving the merger and becoming a wholly owned subsidiary of the Company (the “Voyager Merger” and, together with the Cambium Merger, the “Mergers”). The Merger Agreement is described in more detail in Item 6 of this Schedule 13D.
The Reporting Person’s acquisition of the shares of Common Stock in connection with the Mergers and the related transactions described in this Schedule 13D, as well as the Reporting Person’s acquisition of the Subscription Shares (as such term is defined in Item 5 hereof), were for investment purposes. The Reporting Person reviews on a continuing basis its investment in the Company. Based on such review, the Reporting Person determined to exercise its subscription right and acquire the Subscription Shares as described herein. The Reporting Person from time to time may acquire, or cause to be acquired, additional securities of the Company, dispose of, or cause to be disposed, such securities, or formulate other purposes, plans or proposals regarding the Company or any of its securities, in light of market conditions, developments affecting the Company or the industry in which it operates, the business and prospects of the Company, other investment and business opportunities available to the Reporting Person, general stock market and economic conditions, tax considerations and any other factors the Reporting Person may deem relevant.
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The Company is a “Controlled Company,” as defined in Rule 5615(c)(2) of the NASDAQ Global Market, because the Reporting Person holds more than a majority of the outstanding Common Stock of the Company. As a result, the Reporting Person has the ability to determine the outcome of matters submitted to the Company’s stockholders for approval. In addition, the Reporting Person has the ability to control the management, affairs and operations of the Company. See Item 6 of this Schedule 13D for additional information regarding board membership.
Except as described herein (including the matters described in Item 6 hereof, which are incorporated herein by this reference), neither the Reporting Person, nor, to the knowledge of the Reporting Person, any of the persons named in Item 2 hereof or on Schedule A annexed hereto, has any present plan or proposal which relates to, or which would result in, any of events referred to in paragraphs (a) through (j) of Item 4 of Schedule 13D. However, the Reporting Person will continue to review and evaluate the business of the Company and, depending upon any of the factors referred to above, may in the future determine to take one or more of such actions.
Item 5. Interest in Securities of the Issuer.
As of August 16, 2011 and as of the date of filing of this Amendment (the “Filing Date”), the Reporting Person may be deemed to beneficially own 32,181,068 shares of Common Stock, including 596,668 shares of Common Stock issuable upon exercise of a warrant (the “Warrant”) issued to the Reporting Person pursuant to the terms of the Merger Agreement. Thus, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, as of August 16, 2011, and as of the Filing Date, the Reporting Person is deemed to beneficially own 64.2% of the shares of Common Stock deemed issued and outstanding. The foregoing beneficial ownership percentage is based upon 49,517,529 shares of Common Stock issued and outstanding as of August 16, 2011 (which number consists of 42,271,153 shares of Common Stock issued and outstanding as of July 31, 2011, as reported by the Company in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (File No. 001-34575), filed with the Securities and Exchange Commission on August 10, 2011, plus 7,246,376 shares of Common Stock issued by the Company on or about August 16, 2011, in connection with the exercise of the subscription right described in this Schedule 13D). The Warrant may become exercisable for additional shares of Common Stock, in accordance with its terms. See Item 6 of this Schedule 13D for additional information regarding the Warrant.
The Reporting Person has the sole power to vote and dispose of all of the shares of Common Stock beneficially owned by it described herein. No other shares of Common Stock are owned, beneficially or otherwise, by the persons listed on Schedule A annexed hereto.
The Reporting Person exercised in full its subscription right under the Stockholders Agreement (described in Item 6 hereof), and on August 16, 2011, purchased 7,246,376 shares of Common Stock (the “Subscription Shares”) at a purchase price of $2.76 per share, or an aggregate purchase price of $19,999,997.76. The purchase price per share was equal to 90% of the volume-weighted average price of the Common Stock measured over the ten-trading-day period immediately preceding the issuance and sale of the shares of Common Stock, in accordance with the terms of the Stockholders Agreement. The Subscription Shares are included in the 32,181,068 shares of Common Stock deemed to be beneficially owned by the Reporting Person.