UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
magicJack Vocaltec, Ltd.
(Name of Issuer)
Class A Common stock
(Title of Class of Securities)
0001005699
(CUSIP Number)
Spencer Grimes
Twinleaf Management, LLC
131 Brookwood Lane,
New Canaan, CT 06840
(203) 594-1441
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 20, 2017
(Date of Event which Requires
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 ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box [ ].
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all
exhibits. See ss.240.13d-7 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 the
disclosures provided in a prior cover page.
The information required in 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 ("Act") 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).
1 Names of Reporting Persons
Twinleaf Management, LLC
2 Check the Appropriate Box if a Member of a Group
(a) [ ]
(See instructions) (b) [X]
3 SEC USE ONLY
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4 Source of Funds (See Instructions) OO
5 Check if Disclosure of Legal Proceeding is Required
Pursuant to Items 2(d) or 2(e)
6 Citizenship or Place of Organization Connecticut, USA
7 Sole Voting Power 0
8 Shared Voting Power 809,526
9 Sole Dispositive Power 0
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10 Shared Dispositive Power 809,526
11 Aggregate Amount Beneficially Owned by each Reporting
Person
809,526
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (see instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
5.0%
14 Type of Reporting Person (See Instructions)
IA
As of June 20, 2017 Twinleaf Management, LLC is the
beneficial owner of 809,526 shares of Class A Common
Stock of magicJack Vocaltec, Ltd. The shares are allocated
across nine (9) discretionary client accounts (the
"Client Accounts"). Such clients have the right to
receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, such securities. No such
client contains an interest relating to more than five
percent (5%) of the class of securities.
1 Names of Reporting Persons
Spencer Grimes, Managing Member of Twinleaf Management,
LLC
2 Check the Appropriate Box if a Member of a Group
(a) [ ]
(See instructions) (b) [X]
3 SEC USE ONLY
|
4 Source of Funds (See Instructions) OO
5 Check if Disclosure of Legal Proceeding is Required
Pursuant to Items 2(d) or 2(e)
6 Citizenship or Place of Organization USA
7 Sole Voting Power 0
8 Shared Voting Power 809,526
9 Sole Dispositive Power 0
10 Shared Dispositive Power 809,526
|
11 Aggregate Amount Beneficially Owned by each Reporting
Person
809,526
12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (see instructions) [ ]
13 Percent of Class Represented by Amount in Row (11)
5.0%
14 Type of Reporting Person (See Instructions)
IN/HC
* As of June 20, 2017 Twinleaf Management, LLC is the
beneficial owner of 809,526 shares of Class A Common Stock
of magicJack Vocaltec, Ltd. The shares are allocated across
nine (9) discretionary client accounts (the "Client
Accounts"). Such clients have the right to receive or the
power to direct the receipt of dividends from, or the
proceeds from the sale of, such securities. No such client
contains an interest relating to more than five percent (5%)
of the class of securities. Spencer Grimes is the Managing
Member of Twinleaf Management, LLC and as a result possesses
the power to vote and dispose or direct the disposition
of all the shares referred to above, thus may be deemed to
beneficially own a total of 5.0% shares of Class A Common Stock.
Item 1. Security and Issuer
The title of the class of equity security to which this
statement on Schedule 13D relates is the Class A Common Stock
of magicJack VocalTec, Ltd., a company organized under
the laws of the State of Israel (the "Issuer"). The
Issuer's principal place of business is 2 Haomanut Street,
2nd Floor, Poleg Industrial Area, Netanya, Israel, 42504.
Item 2. Identity and Background
(a) This Schedule 13D is being filed by Twinleaf
Management, LLC, a Connecticut limited liability company,
and by Spencer Grimes, a United States Citizen and Managing
Member of Twinleaf Management, LLC (together, the "Reporting
Persons").
(b) The principal business address for each of the
Reporting Persons is:
Twinleaf Management, LLC
131 Brookwood Lane,
New Canaan, CT 06840
Spencer Grimes is the Managing Member of
Twinleaf Management, LLC. Each of the Reporting Persons
is party to that certain Joint Filing Agreement, as
further described in Item 6. Accordingly, the Reporting
Persons are hereby filing a joint Schedule 13D.
(c) The principal business of Twinleaf Management, LLC is
the performance of investment management and advisory
services. The principal business of Spencer Grimes is serving
as the Managing Member of Twinleaf Management, LLC.
(d) None of the Reporting Persons have, during the last
five years, been convicted in a criminal proceeding
(excluding traffic violations or similar
misdemeanors).
(e) None of the Reporting Persons have, during the
last five years, been a party to a civil proceeding
of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding 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 violations
with respect to such laws.
(f) Twinleaf Management, LLC is a Connecticut
limited liability company, and Spencer
Grimes is a United States Citizen.
Item 3. Source and Amount of Funds or Other
Consideration
The shares to which this statement relates were
acquired by the Reporting Persons on behalf
the clients for which Twinleaf Management, LLC
serves as investment advisor, using client capital.
The aggregate dollar amount used to purchase the
shares to which this statement relates is $6,171,632.
Item 4. Purpose of Transaction
The shares covered by this statement were
originally acquired in the ordinary course of business
solely for investment purposes and not for the
purposes of participating in or influencing the
management of the Issuer.
On June 20, 2016, the Reporting Persons determined it was
in the best interests of the Client Accounts that Spencer
Grimes communicate with the Issuer regarding ways to increase
shareholder value. The communication, a letter emailed to the
board of the Issuer, is included as Exhibit B below.
In addition, as investors in the Issuer, the Reporting
Persons have had and may continue to have general discussions
with representatives of the Issuer regarding various matters
relating to the business and operations of the Issuer.
The Reporting Persons have also had and may continue to have
conversations with other stockholders of the Issuer. In the
course of such conversations with members of management,
the board of directors and other stockholders, the Reporting
Persons may suggest actions that could result in, among other
things: (a) the acquisition by the Reporting Persons of
additional securities of the Issuer, or the disposition of
securities of the Issuer; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation,
involving the Issuer or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Issuer or any
of its subsidiaries; (d) changes in the present board of
directors or management of the Issuer; (e) a material change
in the present capitalization or dividend policy of the Issuer;
(f) any other material change in the Issuer's business or
corporate structure; (g) changes in the Issuer's certificate
of incorporation or bylaws or other actions which may
impede the acquisition of control of the Issuer by any person;
(h) causing any class of the Issuer's securities to be
delisted from a national securities exchange or to cease
to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association; (i)
a class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended; or (j)
any action similar to those enumerated above.
In addition, the Reporting Persons also intend to review the
investment in the Issuer on a continuing basis. Depending on
various factors, including, without limitation, the Issuer's
financial position and strategic direction, the outcome of
the discussions and actions referenced above, actions taken
by the Issuer's board of directors, changes to the
composition of the board of directors, price levels of the
Class A Common Stock and other securities, other investment
opportunities available to the Reporting Persons, conditions
in the securities market and general economic and industry
conditions, the Reporting Persons may in the future take such
actions with respect to the investment in the Issuer as they
deem appropriate including, without limitation, (i)
purchasing additional securities of the Issuer in open market
or privately negotiated transactions; (ii) selling all or part
of the securities of the Issuer owned by such Reporting
Person in open market or privately negotiated transactions;
and/or (iii) one or more combinations of the foregoing. Any
open market or privately negotiated purchases or sales,
acquisition recommendations or proposals or other transactions
may be made at any time without prior notice
Item 5. Interest in Securities of the Issuer
(a) The aggregate percentage of Shares reported owned by each
person named herein is based on 16,041,017 shares of Class A
Common Stock outstanding as of April 10, 2017 which is the total
number of shares of Common Stock outstanding as reported in the
Issuer's Quarterly Report on Form 10-Q, filed with the
Securities and Exchange Commission on May 10, 2017. As of the
close of business on the date hereof, Twinleaf Management, LLC,
as the investment advisor to nine (9) discretionary client
accounts, may be deemed to beneficially own the 809,526 shares
of Class A Common Stock spread across the Client Accounts.
Spencer Grimes, as the Managing Member of Twinleaf Management, LLC,
may be deemed to beneficially own the 809,526 shares of magicJack
Vocaltec Ltd's Class A Common Stock spread across the Client
Accounts.
(b) The Reporting Persons possess the shared power to vote and to
direct the disposition of the securities held by the Reporting
Persons.
(c) The Reporting Persons conducted the following transactions on
the in the past sixty (60) days. All of the following
transactions were conducted on the open market and effectuated by
Twinleaf Management, LLC for the benefit of the Client
Accounts:
5/17/2017 1265 $6.80
5/26/2017 500 $6.60
5/31/2017 800 $6.40
6/9/2017 6600 $7.35
6/12/2017 20949 $7.38
6/13/2017 500 $7.30
6/14/2017 100 $7.10
6/15/2017 158 $7.00
6/16/2017 18132 $7.10
6/19/2017 33458 $7.30
6/20/2017 13200 $7.29
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(d) The Client Accounts of Twinleaf Management, LLC have the
right to receive or the power to direct the receipt of
dividends from, or proceeds from the sale of, the Shares.
No such client owns more than five percent (5%) of the Class A
Common stock nor any other class of stock of the Issuer.
(e) Not Applicable
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
On June 20, 2017, the Reporting Persons entered into a
Joint Filing Agreement in which the Reporting Persons agreed
to the joint filing on behalf of each of them of statements on
Schedule 13D with respect to securities of the Issuer,
to the extent required by applicable law. A copy of this
agreement is attached hereto as Exhibit A and is incorporated
herein by reference.
Other than as described herein, there are no contracts,
arrangements, understandings or relationships among the
Reporting Persons, or between the Reporting Persons and
any other person, with respect to the securities of
the Issuer.
SIGNATURE
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.
June 20, 2017
TWINLEAF MANAGEMENT, LLC
/s/ Spencer Grimes
----------------------------------------
Spencer Grimes
Managing Member, Twinleaf Management, LLC
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SPENCER GRIMES
/s/ Spencer Grimes
-----------------------------------------
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Item 7. Material to Be Filed as Exhibits
EXHIBIT A
JOINT FILING AGREEMENT DATED JANUARY 20, 2017
In accordance with Rule 13d-1(k)(1)(iii) under the Securities
Exchange Act of 1934, as amended, the persons named below agree
to the joint filing on behalf of each of them of a Statement
on Schedule 13D (including additional amendments thereto) with
respect to the shares of Class A Common Stock of magicJack
Vocaltec, Ltd. This Joint Filing Agreement shall be filed as
an Exhibit to such Statement.
June 20, 2017
TWINLEAF MANAGEMENT, LLC
/s/ Spencer Grimes
-----------------------------------------
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Spencer Grimes
Managing Member, Twinleaf Management, LLC
SPENCER GRIMES
s/ Spencer Grimes
--------------------------------------
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Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (See 18 U.S.C. 1001)
EXHIBIT B
LETTER TO MAGICJACK VOCALTEC, LTD'S BOARD
June 20, 2017
Mr. Izhak Gross, Chairman
Mr. Don Carlos Bell III, President and CEO
Mr. Richard Harris, Director
Mr. Alan Bradley Howe, Director
Ms. Tali-Yaron Elder, Director
magicJack Vocaltec Ltd.
12 Haomanut Street, 2nd Floor
Poleg Industrial Area, Netanya, Israel 42504
VIA EMAIL TO MR. BELL
Dear magicJack Board of Directors:
The accompanying Form 13D filed with the SEC presents an
opportunity to provide our views on recent developments
at our company and to offer suggestions aimed at delivering
value for long-suffering shareholders. At this critical
juncture, we hope that you, our partially
reconstituted board of directors, will provide superior
governance and oversight than did your predecessors.
As indicated in our filing, client accounts managed by
Twinleaf Management LLC own 809,526 shares or just over
5% of the company's outstanding equity. Having made our
first ill-timed purchase of magicJack stock in summer
2013, our perspective is perhaps deeper than that
of most shareholders. So is our frustration.
In light of our company's preliminary proxy statement dated
June 12, 2017, certain proposals requiring shareholder vote
and the ongoing strategic review process formally announced
in March, we submit the following:
We are encouraged by Mr. Bell's assertiveness in remaking the
company and board. With regard to his proposed compensation
package, we are seeking more disclosure around the metrics
in the change of control provision so that it is fully
aligned with shareholder interests. The unique situation that
Mr. Bell inherited upon becoming CEO in March - namely the
presence of multiple unsolicited bids for the company,
as disclosed in the February proxy statement - demands
thoughtful structuring of compensation to absolutely
reward outperformance but avoid further leakage away from
shareholders.
With regard to the proposal to raise your own compensation as
board members, we will vote AGAINST. A 50 per cent decline
in the company's stock price over the past four years should
provide sufficient evidence of vast corporate underperformance
that should not be rewarded. True, there are some recent
additions to our board but if any member feels that his or her
board compensation is inadequate relative to stock price
performance, I will gladly seek board nomination as your
replacement.
With regard to the strategic review, we hope that you aim to
expeditiously conclude the process. It doesn't take a genius
to recognize that companies with chronic revenue declines
and a history of strategic blunders are not often worth more
tomorrow than they are today. If indeed there is a bona fide
offer for our company at $9.50 per share, we'd like to see it
signed to binding agreement and announced. Look no further
than the current stock price for an indication that investors
are highly skeptical.
If our board is unable to achieve that result, we urge you not
to reveal such an unsatisfactory outcome to the market without
a concurrent and immediate plan to return substantial cash to
shareholders. Failure to neither sell the company nor return
capital will further damage credibility among investors and
inflict more pain on beleaguered shareholders. A high-margin,
no-growth business - if combined with aggressive cost controls
and prudent capital allocation - need not necessarily be the
poor investment that magicJack has been.
Sincerely,
Spencer Grimes
Managing Partner
Twinleaf Management LLC
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