B. Riley FCC supplem

SUPPLEMENT submitted by B. Riley Financial, Inc.

Supplement

2018-04-30

This document pretains to ITC-T/C-20171213-00222 for Transfer of Control on a International Telecommunications filing.

IBFS_ITCTC2017121300222_1384661

Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) magicJack VocalTec Ltd. ) Transferor ) ) and ) ) B. Riley Financial, Inc. ) Transferee ) ) Joint Application for Consent to Transfer ) Control of Domestic and International ) Authorizations Pursuant to Section 214 of the ) Communications Act of 1934, As Amended ) JOINT APPLICATION TO TRANSFER CONTROL OF DOMESTIC AND INTERNATIONAL SECTION 214 AUTHORIZATIONS Pursuant to Section 214 of the Communications Act of 1934, as amended (“the Act”), 1 and Sections 63.04, 63.18, and 63.24 of the Commission’s rules, 2 magicJack VocalTec Ltd. (“MJVT” or “Transferor”) and B. Riley Financial, Inc. (“B. Riley” or “Transferee”) (the “Applicants”) request the Commission’s consent to transfer control of certain of MJVT’s indirect wholly-owned subsidiaries – namely, YMax Communications Corp. (“YMax”), magicJack SMB, Inc. (“MJSMB”), and Broadsmart Global, Inc. (“Broadsmart”) (collectively, the “Licensees”) – from MJVT to B. Riley. YMax holds international and domestic Section 214 authority, and MJSMB and Broadsmart hold international Section 214 authority. As further 1 47 U.S.C. § 214. 2 47 C.F.R. §§ 63.04, 63.18, and 63.24.

described below, the proposed transfer of control will serve the public interest by providing additional managerial expertise and access to capital to the Licensees, which will in turn enhance their ability to offer their services and better compete in the communications marketplace. Pursuant to Section 63.04(b), this Joint Application is being filed concurrently with the International Bureau and the Wireline Competition Bureau. The Applicants also request streamlined processing of the Joint Application pursuant to Sections 63.03(b) and 63.12 of the Commission’s rules. 3 I. DESCRIPTION OF THE PARTIES A. MJVT and the Licensees MJVT (FRN: 0027030683) is a publicly traded (NASDAQ: CALL) company that is incorporated under the laws of Israel. MJVT and its subsidiaries are a vertically integrated group of companies that offers Voice-over-Internet-Protocol (“VoIP”) services and related equipment. MJVT is the inventor of the magicJack device, which plugs into the USB port on a computer or into a power adapter and high-speed Internet source, providing users with calling services for home, business, and travel. Also available are magicJack mobile apps, which are applications that allow users to make and receive telephone calls through their smartphones or devices. YMax (FRN: 0013563077), a Delaware corporation, is a wholly-owned direct subsidiary of YMax Corporation (“YMax Corp.”), a Delaware corporation that in turn is a wholly-owned direct subsidiary of MJVT. YMax gives owners of the magicJack device the option of getting a phone number for the device to receive calls or porting their existing number and thereby enjoy related features of the service. YMax also offers customers the option to purchase international minutes on a prepaid platform. YMax holds an international Section 214 authorization and is 3 47 C.F.R. §§ 63.03(b), 63.12. 2

authorized to operate as a competitive local exchange carrier and long distance carrier in all states except New Hampshire in addition to the District of Columbia. Broadsmart (FRN: 0025715012) and MJSMB (FRN: 0025239153), both Florida corporations, are wholly-owned direct subsidiaries of YMax Corp. Broadsmart, an interconnected VoIP provider, makes available hosted Unified Communication as a Service (“UCaaS”) offerings and hardware and network equipment focusing on medium-to-large, multi- location enterprise customers. MJSMB offers interconnected VoIP services to small business customers. Although Broadsmart and MJSMB hold international Section 214 authorizations, they currently do not provide any domestic or international telecommunications services. B. B. Riley B. Riley (FRN: 0027041722) is a publicly traded (NASDAQ: RILY), diversified financial services company which takes a collaborative approach to the capital raising and financial advisory needs of public and private companies and high net worth individuals. Headquartered in Los Angeles with offices in major U.S. financial markets, B. Riley consists of over 900 employees whose cross-platform expertise is mobilized to provide a myriad of financial solutions. B. Riley operates through several wholly-owned subsidiaries, including B. Riley Principal Investments, LLC (“BRPI”), which engages in proprietary investments in other businesses. B. Riley executives have substantial experience in the communications industry. Through BRPI, B. Riley owns United Online, which offers Internet access services to consumers under the NetZero and Juno brands, as well as email, Internet security, web hosting services, and other communications-related services. II. DESCRIPTION OF THE TRANSACTION On November 9, 2017, MJVT, B. Riley, and B. Riley’s wholly-owned indirect subsidiary B. R. Acquisition Ltd. (“Merger Sub”) entered into an Agreement and Plan of Merger 3

(“Agreement”). Pursuant to the Agreement, Merger Sub will merge with and into MJVT, with MJVT as the surviving corporation. At the time of the transaction, the currently issued and outstanding shares of MJVT will be cancelled and converted into the right of each shareholder to receive a cash payment. As a result of the transaction, MJVT will become a wholly-owned, direct subsidiary of BRPI, and MJVT and the Licensees will become wholly-owned, indirect subsidiaries of B. Riley through YMax Corp., MJVT, and BRPI. 4 For the Commission’s reference, organization charts illustrating the current and post-closing corporate structure of the Licensees as described herein are provided as Exhibit A. III. PUBLIC INTEREST STATEMENT The proposed transaction will serve the public interest. The change in ultimate control of the Licensees will occur at the parent level and will not involve the assignment of operating authority, assets, or customers. MJVT and YMax will be able to draw upon the managerial and communications experience of B. Riley’s management team, with decades of financial and managerial experience, including in the communications field. The operational and customer- facing teams of the Licensees will continue to manage their day-to-day operations and businesses following completion of the transaction. The Licensees thus will continue to be operated by highly experienced, well-qualified personnel. MJVT and the Licensees also will benefit from improved access to capital, enhancing their competitive position in the communications services space. 4 Immediately upon closing, B. Riley may undertake an internal corporate reorganization pursuant to which YMax Corp. would become a wholly-owned direct subsidiary of BRPI (instead of remaining a wholly-owned direct subsidiary of MJVT). The Licensees would continue to be wholly-owned, indirect subsidiaries of B. Riley and BRPI through YMax Corp., without any intervening ownership by MJVT. MJVT would continue as a separate, wholly- owned subsidiary of BRPI. This reorganization is illustrated in Exhibit A. 4

Immediately after closing, the Licensees will continue to provide competitive and innovative services to existing customers at the same rates, terms, and conditions and in the same geographic areas as currently provided. Any future changes in the rates, terms, or conditions of service will be undertaken in response to market conditions and consistent with any applicable federal and state requirements. The transaction will be transparent to customers and is not expected to result in the discontinuance, reduction, loss or impairment of service to any customer. The proposed transaction also will not harm competition. B. Riley and the Licensees do not currently compete in the provision of any telecommunications offerings. The transaction thus will not reduce the number of service providers in any market. IV. INFORMATION REQUIRED BY 47 C.F.R. § 63.18 AND THE IBFS SECTION 214 MAIN FORM The Applicants submit the following information, pursuant to 47 C.F.R. § 63.18 and the IBFS Section 214 Main Form, in support of their request for consent to transfer control of the Licensees, which hold international Section 214 authority, to B. Riley: A. Contact Information – Answer to Question 10 (Section 63.18(c)-(d)) Correspondence concerning this Joint Application should be directed to: For Transferor and the Licensees: For Transferee: Thomas Fuller Alan N. Forman EVP & Chief Financial Officer Executive Vice President & General Counsel magicJack VocalTec Ltd. B. Riley Financial, Inc. 560 Village Blvd., Suite 120 299 Park Avenue, 7th Floor West Palm Beach, FL 33409 New York, NY 10171 561.459.5224 (tel.) 212.409.2420 (tel.) thomas.fuller@magicJack.com aforman@brileyfin.com with copies to: with copies to: Bennett L. Ross William F. Maher Daniel Brooks Jennifer L. Kostyu 5


Document Created: 2018-04-30 13:45:18
Document Modified: 2018-04-30 13:45:18
© 2024 FCC.report
This site is not affiliated with or endorsed by the FCC