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): August 30, 2005
Dial Thru International Corporation
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(Exact name of Registrant as specified in its charter)
Delaware 0-22636 75-2461665
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation Identification No.)
17383 Sunset Boulevard, Suite 350
Los Angeles, California 90272
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (310) 566-1700
Not Applicable
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(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))
Item 1.01 Entry into a Material Definitive Agreement
On August 30, 2005, Dial Thru International, Corporation (the "Company")
entered into a binding letter of intent to acquire certain assets,
including but not limited to the customer base (collectively, the "Assets"),
of Integrated Communications, Inc, a Delaware corporation that is an
international long distance carrier providing Voice over Internet Protocol
services to retail customers in the United States, and wholesale services to
customers worldwide ("Integrated"). In consideration for the acquisition of
the Assets, the Company will issue to Integrated:
(a) up to an aggregate of 1,500,000 shares of the Company's
common stock to be issued as follows: (i) 750,000 shares of
common stock within five days of the closing, provided that
Integrated's total monthly gross revenue from its retail and
wholesale customer base prior to the closing date is in excess
of $300,000 per month with a minimum gross margin of $40,000;
and (ii) 750,000 shares immediately following the 12-month
anniversary of the closing date (the "Earn-Out Shares") if (A)
aggregate retail revenue for the Company's Integrated division
(the "Division") for the 12-month period following the closing
date is in excess of $1,500,000 with a related gross margin of
$350,000, and (B) aggregate wholesale revenue for the Division
for the 12-month period following the closing date exceeds
$2,100,000 with a related gross margin of not less than
$130,000; provided, however, that if the gross revenue targets
are not achieved by the Division, then the number of Earn-Out
Shares will be proportionately reduced based on the actual
revenue and margin amounts achieved by the Division; and
(b) warrants to purchase up to 1,000,000 shares of the Company's
common stock as follows: 250,000 warrants to be issued each
quarter, the exercise price to be determined on the grant date,
provided that retail and wholesale revenue and gross margin
increase by a minimum of 25% each quarter, as measured against
the immediately preceding quarter.
The Company will grant piggy-back registration rights to Integrated, whereby
the Company will register the stock issued in connection with the
acquisition if the Company files any registration statement after the
closing date, subject to customary conditions and limitations.
The closing date is expected to occur no later than September 30, 2005,
unless postponed by mutual consent of the parties. The acquisition is
subject to the execution of a definitive acquisition agreement with mutually
acceptable terms and is subject to customary closing conditions. In the
event Integrated terminates the letter of intent prior to the execution of a
definitive agreement, it must pay the Company a break-up fee in the amount
of $100,000 cash. However, Integrated will not be required to pay a break-up
fee if the letter of intent is terminated prior to the execution of a
definitive agreement due to a breach of the letter of intent by the Company
or for any reason beyond the control of either party. Furthermore, if the
Company is not able to raise approximately $1,000,000 within 90 days of the
signing of the Letter of Intent, Integrated shall have the right to
terminate the Letter of Intent without paying the break-up fee.
Item 7.01 Regulation FD Disclosure.
On September 6, 2005, the Company issued a press release ("Press Release")
announcing the signing of a binding letter of intent to acquire certain
assets and the customer base of Integrated Communications. A copy of the
Press Release is attached as Exhibit 99.2 and is incorporated by reference
herein.
Item 9.01. Financial Statements and Exhibits.
c) Exhibits
Exhibit Number Description
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99.1 Letter of Intent to acquire Integrated Communications, Inc.
99.2 Press release dated September 6, 2005
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.
Dial Thru International Corporation
Date: September 6, 2005 By: /s/ Allen Sciarillo
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Allen Sciarillo
Chief Financial Officer, Secretary,
(Principal Accounting Officer and
Principal Financial Officer) and Director