Merger Agreement

9 Months Ended

Sep. 30, 2015

Merger Agreement [Abstract]

Merger Agreement

NOTE 14: MERGER AGREEMENT

On September 2, 2015, the Company, entered into an Agreement and Plan of Merger (the Merger Agreement) with MBS Holdings, Inc., a Delaware corporation (Parent), and Arrow Merger Subsidiary, Inc., a New York corporation and a wholly-owned subsidiary of Parent (Merger Sub), pursuant to which Merger Sub will merge with and into the Company (the Merger), with the Company surviving the Merger as a wholly-owned subsidiary of Parent.

At the time that the Merger becomes effective (the Effective Time), (i) each issued and outstanding common share of the Company, par value $0.01 per share (the Common Stock), other than certain excluded shares, will be converted automatically into the right to receive $4.70 in cash (the Common Stock Merger Consideration), and (ii) each issued and outstanding 5% Series Preferred Share of the Company, par value $100 per share, will be converted automatically into the right to receive $100 all in cash, plus any accrued but unpaid dividends through the Closing Date (as defined in the Merger Agreement).

Completion of the Merger is subject to various closing conditions, including, among others, (a) the affirmative vote of at least seventy percent (70%) of the outstanding shares of Common Stock entitled to vote at a special shareholders meeting ("Shareholders' Meeting") in favor of adopting the Merger Agreement and approving the Merger, (b) the receipt of required regulatory approvals and consents, and (c) the absence of any law, injunction, judgment, order, decree or ruling restraining or prohibiting consummation of the Merger. Each party's obligation to consummate the Merger is also subject to certain additional conditions, which include the accuracy of the other party's representations and warranties and the other party's compliance with its covenants and obligations in all material respects (in each case, as contained in the Merger Agreement).

Shareholders of the Company have been asked to vote on the adoption of the Merger Agreement and the approval of the Merger at the Shareholders' Meeting that is currently scheduled for November 16, 2015.

For the nine months ended, the Company incurred $0.9 million of costs associated with the pending Merger. These costs are presented in selling, general and administrative expenses in the statements of operations.

If the proposal to adopt the Merger Agreement is not approved by the Shareholders, or if the Merger is not consummated for any other reason, under specified circumstances, Alteva will be required to pay Parent (a) a termination fee of $873,000, or (b) the lesser of $750,000 and Parents documented out-of-pocket transaction fees and expenses actually incurred in connection with the transactions contemplated in the Merger Agreement.