The following constitutes the Schedule 13D filed by the undersigned (the “Schedule 13D”).
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Item 1.
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Security and Issuer.
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This statement relates to the Common Stock, $0.0001 par value per share (the “Shares”), of Rightside Group, Ltd., a Delaware corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 5808 Lake Washington Blvd. NE, Suite 300, Kirkland, Washington 98033.
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Item 2.
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Identity and Background.
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(a) This statement is filed by Daniel M. Negari and Michael R. Ambrose. Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is a party to that certain Joint Filing Agreement, as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.
(b) The address of the principal office of each of the Reporting Persons is 2121 E. Tropicana Avenue, Suite 2, Las Vegas, Nevada 89119.
(c) The principal occupation of Mr. Negari is serving as the Chief Executive Officer of XYZ.COM LLC (“XYZ”). The principal occupation of Mr. Ambrose is serving as the Chief Operating Officer of XYZ.
(d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) No Reporting Person has, during the last five years, been 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 violation with respect to such laws.
(f) Messrs. Negari and Ambrose are citizens of the United States of America.
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Item 3.
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Source and Amount of Funds or Other Consideration.
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The Shares directly owned by Mr. Negari were purchased with personal funds (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted. The aggregate purchase price of the 511,885 Shares directly owned by Mr. Negari is approximately $4,502,881, including brokerage commissions.
The Shares directly owned by Mr. Ambrose were purchased with personal funds (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted. The aggregate purchase price of the 469,157 Shares directly owned by Mr. Ambrose is approximately $4,072,282, including brokerage commissions.
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Item 4.
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Purpose of Transaction.
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The Reporting Persons purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of Shares at prices that would make the purchase or sale of Shares desirable, the Reporting Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.
The Reporting Persons have engaged and intend to continue to engage in discussions with the Issuer’s management and board of directors (the “Board”) regarding means to maximize shareholder value, including filling the current vacancy on the Board with Mr. Negari and developing a high level strategy to bring improved vision and accountability to the Issuer. The Reporting Persons have formed a group in connection with such discussions.
No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in additional communications with management and the Board of the Issuer, engaging in discussions with stockholders of the Issuer and others about the Issuer and the Reporting Persons’ investment, making proposals to the Issuer concerning changes to the capitalization, ownership structure, Board structure (including Board composition) or operations of the Issuer, purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares, or changing their intention with respect to any and all matters referred to in Item 4.
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Item 5.
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Interest in Securities of the Issuer.
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The aggregate percentage of Shares reported owned by each person named herein is based upon 18,987,303 Shares outstanding as of November 4, 2015, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 10, 2015.
(a) As of the close of business on the date hereof, Mr. Negari directly owned 511,885 Shares, constituting approximately 2.7% of the outstanding Shares.
As of the close of business on the date hereof, Mr. Ambrose directly owned 469,157 Shares, constituting approximately 2.5% of the outstanding Shares.
An aggregate of 981,042 Shares, constituting approximately 5.2% of the Shares outstanding, are reported in this Schedule 13D.
The Reporting Persons, as members of a “group” for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.
(b) Mr. Negari has the sole power to vote and dispose of the Shares directly owned by him.
Mr. Ambrose has the sole power to vote and dispose of the Shares directly owned by him.
(c) No Reporting Person has engaged in any transactions in the securities of the Issuer during the past 60 days.
(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.
(e) Not applicable.
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Item 6.
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Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
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On November 19, 2015, 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 the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached hereto as Exhibit 99.1 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.
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Item 7.
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Material to be Filed as Exhibits.
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99.1
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Joint Filing Agreement, dated November 19, 2015.
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: November 30, 2015
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/s/ Daniel M. Negari
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Daniel M. Negari
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/s/ Michael R. Ambrose
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Michael R. Ambrose
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