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): December 23, 2014
KITARA MEDIA CORP.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 000-51840 | 20-3881465 | ||
| (State
or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS
Employer Identification No.) |
525 Washington Blvd, Suite 2620, Jersey City, New Jersey 07310
(Address of Principal Executive Offices) (Zip Code)
(201) 539-2200
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(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 (see General Instruction A.2. below):
| ☐ | 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 December 23, 2014, Kitara Media Corp. (“Kitara”) entered into a First Amendment (the “Amendment”) to the Unit Exchange Agreement (the “Exchange Agreement”) with Kitara Holdco Corp., a Delaware corporation and wholly-owned subsidiary of Kitara (“Holdco”), Future Ads LLC, a California limited liability company (“Future Ads”), and the members of Future Ads (the “Transferors”).
As previously reported, on October 10, 2014, Kitara entered into (i) the Exchange Agreement, and (ii) an Agreement and Plan of Reorganization (the “Reorganization Agreement”), by and among Kitara, Holdco, and Kitara Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Holdco. Upon completion of the transactions contemplated by the Exchange Agreement and Reorganization Agreement (the “Transactions”), Holdco will become the new publicly traded company and Kitara and Future Ads will become wholly-owned subsidiaries of Holdco.
Pursuant to the Exchange Agreement, the consideration payable to the Transferors is subject to a post-closing adjustment based on the working capital and indebtedness of Future Ads and the working capital of Kitara. The Amendment modifies the calculation of Future Ads’ working capital for the purposes of the adjustment by including Future Ads’ advertiser deposits less $886,000 as current liabilities.
The foregoing summary of the Amendment is qualified in its entirety by reference to the text of the Amendment, which is attached as an exhibit hereto and is incorporated herein by reference.
Additional Information
In connection with the Transactions, Kitara has filed a preliminary proxy statement/prospectus on Schedule 14A with the Securities and Exchange Commission (the “SEC”). The preliminary proxy statement/prospectus also is included in a registration statement on Form S-4 filed by Holdco. Investors are urged to read the preliminary proxy statement/prospectus and, when it becomes available, definitive proxy statement/prospectus (including all amendments and supplements thereto) before they make any voting or investment decision with respect to the Transactions, because the proxy statement/prospectus contains important information. Investors may obtain free copies of the preliminary proxy statement/prospectus and, when it becomes available, definitive proxy statement/prospectus, as well as other filings containing information about Kitara, Holdco and Future Ads, without charge, at the SEC’s Internet site (www.sec.gov). These documents may also be obtained for free, when they become available, by directing a request to Kitara Merger Corp. or Kitara Holdco Corp. at 525 Washington Blvd, Suite 2620, Jersey City, New Jersey 07310, Attn: Corporate Secretary.
Kitara and its directors and executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Kitara’s stockholders with respect to the Transactions. Information regarding Kitara’s directors and executive officers is available in Kitara’s annual report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 31, 2014. Additional information regarding the interests of such participants in the Transactions is included in the proxy statement/prospectus.
| Item 8.01 | Other Events. |
The special meeting of Kitara stockholders being held to consider and vote upon the Transactions and related matters was adjourned today and will be reconvened on January 6, 2015 at 10:00 a.m., local time, at the offices of Graubard Miller, 405 Lexington Ave., 11th Floor, New York, New York 10174. The special meeting was adjourned because the SEC has not yet completed its review of the proxy statement/prospectus and the registration statement of which it forms a part. A copy of the press release announcing the adjournment is attached to this current report as Exhibit 99.1 and is incorporated herein by reference.
| 2 |
| Item 9.01 | Financial Statements, Pro Forma Financial Information and Exhibits. |
| (d) | Exhibits: |
| Exhibit | Description | |
| 2.1 | First Amendment to Unit Exchange Agreement, dated as of December 23, 2014, by and among Kitara Media Corp., Kitara Holdco Corp., Future Ads LLC, Lowenstein Enterprises Corporation, Family Trust of Jared L. Pobre, U/A DTD 12/13/2004, Newport Holding Trust and Neptune Capital Trust. | |
| 99.1 | Press release dated December 29, 2014. |
| 3 |
SIGNATURE
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.
| Dated: December 29, 2014 | ||
| KITARA MEDIA CORP. | ||
| By: | /s/ Robert Regular | |
| Name: Robert Regular | ||
| Title: Chief Executive Officer | ||
4
Exhibit 2.1
FIRST AMENDMENT TO
UNIT EXCHANGE AGREEMENT
This First Amendment to the Unit Exchange Agreement (this “Amendment”), with respect to the Unit Exchange Agreement (the “Exchange Agreement”), dated as of October 10, 2014, is dated as of December 23, 2014, by and between Kitara Media Corp., a Delaware corporation (“Kitara”), Kitara Holdco Corp., a Delaware corporation (“Holdco”), Future Ads LLC, a California limited liability company (“Future Ads”), Lowenstein Enterprises Corporation (“Lowenstein”), Family Trust of Jared L. Pobre, U/A DTD 12/13/2004 (“Pobre Trust”), Newport Holding Trust (“Newport”) and Neptune Capital Trust (“Neptune” and together with Kitara, Holdco, Future Ads, Lowenstein, Pobre Trust and Newport, the “Parties”).
W I T N E S S E T H:
WHEREAS, the Parties are party to the Exchange Agreement; and
WHEREAS, pursuant to Section 8.3 of the Exchange Agreement, the Exchange Agreement may be amended by a written agreement executed by the Parties; and
WHEREAS, the Parties desire to amend certain provisions of the Exchange Agreement as set forth herein.
NOW THEREFORE, in consideration of the premises and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Amendment to Exchange Agreement.
(a) The definition of “Future Ads Current Liabilities” in Section 1.1 of the Exchange Agreement is hereby deleted in its entirety and replaced with the following:
“Future Ads Current Liabilities” means an amount equal to the following liabilities of Future Ads and its Subsidiaries: (i) accounts payable, (ii) accrued liabilities, (iii) advertiser deposits less $886,000 and (iv) those liabilities listed on Schedule 2.5(b)(i) of the Transferors Disclosure Schedules; provided, however, that the parties acknowledge and agree that no Future Ads Transaction Expenses nor the current portion of deferred rent shall be included for purposes of calculating the Future Ads Current Liabilities.
2. Governing Law. This Amendment shall be governed in all respects in accordance with the provisions of Section 8.9 of the Exchange Agreement.
3. No Other Amendment. Except as amended hereby, the Exchange Agreement shall remain in full force and effect. By executing this Amendment below, each of the Parties certifies that this Amendment has been executed and delivered in compliance with the amendment provisions of the Exchange Agreement.
4. Counterparts. This Amendment may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.
5. Facsimile or Portable Document File Signature. This Amendment may be executed by facsimile or portable document file signature and a facsimile or portable document file signature shall constitute an original for all purposes.
[The remainder of this page is intentionally left blank.]
| 2 |
IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their duly authorized representatives as of the date hereof.
| KITARA HOLDCO CORP. | ||
| By: | /s/ Robert Regular | |
| Name: | Robert Regular | |
| Title: | CEO | |
| KITARA MEDIA CORP. | ||
| By: | /s/ Robert Regular | |
| Name: | Robert Regular | |
| Title: | CEO | |
| FUTURE ADS LLC | ||
| By: | /s/ Jared Pobre | |
| Name: | Jared Pobre | |
| Title: | CEO | |
| LOWENSTEIN ENTERPRISES CORPORATION | ||
| By: | /s/ Jared Pobre | |
| Name: | Jared Pobre | |
| Title: | CEO | |
| FAMILY TRUST OF JARED L. POBRE, U/A | ||
| DTD 12/31/2004 | ||
| By: | /s/ Jared Pobre | |
| Name: | Jared Pobre | |
| Title: | Trustee | |
Signature Page to First Amendment to Unit Exchange Agreement
| NEWPORT HOLDING TRUST | ||
| By: | /s/ David McNair | |
| Name: | David McNair | |
| Title: | Managing Trustee | |
| NEPTUNE CAPITAL TRUST | ||
| By: | /s/ Brian Mason | |
| Name: | Brian Mason | |
| Title: | Managing Trustee | |
Signature Page to First Amendment to Unit Exchange Agreement
Exhibit 99.1
Kitara Media Corp. Adjourns Special Meeting
of Stockholders relating to Proposed
Merger to Allow SEC to Complete Review of Proxy Statement
-- Majority of the holders of the currently
outstanding Kitara common stock have
previously agreed to vote in favor of Proposed Merger
JERSEY CITY, N.J. Dec. 29, 2014 /PRNewswire/ -- Kitara Media Corp. (OTCBB: KITM), a leading digital media and technology company providing video solutions to advertisers, digital marketers and publishers (“Kitara”), today announced that its Special Meeting of Stockholders (the “Special Meeting”) relating to its proposed merger with Future Ads LLC (“Future Ads”) was adjourned to January 6, 2015, at 10:00 a.m., local time, at the offices of its general counsel, Graubard Miller, located at The Chrysler Building, 405 Lexington Avenue, 11th Floor, New York, New York 10174. The Special Meeting was adjourned because the Securities and Exchange Commission (the “SEC”) has not yet completed its review of the proxy statement/prospectus and the registration statement of which it forms a part to be used in connection with the proposed merger.
As previously announced, Kitara entered into (i) a Unit Exchange Agreement, as amended, by and among Kitara, Kitara Holdco Corp., a wholly-owned subsidiary of Kitara (“Holdco”), Future Ads LLC (“Future Ads”), and the members of Future Ads, and (ii) an Agreement and Plan of Reorganization, by and among Kitara, Holdco, and Kitara Merger Sub, Inc., a wholly-owned subsidiary of Holdco. Upon completion of the transactions contemplated by the Unit Exchange Agreement and the Agreement and Plan of Reorganization (the “Transactions”), Holdco will become the new publicly traded company and Kitara and Future Ads will become wholly-owned subsidiaries of Holdco. The parties expect the Transactions to be consummated shortly after the Special Meeting is held.
To finance the Transactions, Kitara has received a fully committed debt facility from a nationally recognized lender that is subject only to the execution of definitive loan documents and satisfaction of closing conditions. The debt facility is expected to be consummated simultaneously with the Transactions.
The record date for determination of stockholders entitled to vote at the Special Meeting, including at the adjournment thereof remains December 2, 2014.
About Kitara Media
Kitara Media is a leading digital media and technology company providing video solutions to advertisers, digital marketers and publishers. With nearly 500 million monthly video ad views, Kitara Media delivers strong engagement for advertisers, high revenues for publishers, as well as improved user experience with PROPEL+, an internally developed proprietary video ad technology platform. Kitara Media owns and operates several online media sites including Healthguru.com and Adotas.com. The company is headquartered in Jersey City, NJ.
About Future Ads
Future Ads is a digital media platform for results-focused online advertising and publisher monetization. Future Ads' innovative, diversified solutions works synergistically to help advertisers and publishers achieve outstanding performance results. Founded in 2001, Future Ads is headquartered in Irvine, CA.
Additional Information
In connection with the Transactions, Kitara has filed a preliminary proxy statement/prospectus on Schedule 14A with the SEC. The preliminary proxy statement/prospectus also is included in a registration statement on Form S-4 filed by Holdco. Investors are urged to read the preliminary proxy statement/prospectus and, when it becomes available, definitive proxy statement/prospectus (including all amendments and supplements thereto) before they make any voting or investment decision with respect to the Transactions, because the proxy statement/prospectus contains important information. Investors may obtain free copies of the preliminary proxy statement/prospectus and, when it becomes available, definitive proxy statement/prospectus, as well as other filings containing information about Kitara, Holdco and Future Ads, without charge, at the SEC’s Internet site (www.sec.gov). These documents may also be obtained for free, when they become available, by directing a request to Kitara Merger Corp. or Kitara Holdco Corp. at 525 Washington Blvd, Suite 2620, Jersey City, New Jersey 07310, Attn: Corporate Secretary.
Kitara and its directors and executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Kitara’s stockholders with respect to the Transactions. Information regarding Kitara’s directors and executive officers is available in Kitara’s annual report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 31, 2014. Additional information regarding the interests of such participants in the Transactions is included in the proxy statement/prospectus.
Forward Looking Statements
This press release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of Kitara's and Future Ads' management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements.
Forward-looking statements are inherently uncertain and subject to a variety of events, factors and conditions, many of which are beyond the control of Kitara and Future Ads and not all of which are known to Kitara or Future Ads, including, without limitation those risk factors described from time to time in Kitara's reports filed with the SEC, including the proxy statement/prospectus. Among the factors that could cause actual results to differ materially are: loss of key advertising customers; inability to acquire new advertising customers; inability to expand video content library; inability to achieve projected results; inability to protect intellectual property; inability to execute acquisition strategy; inability to effectively manage growth; failure to effectively integrate the operations of acquired businesses; competition; loss of key personnel; increases in costs of operations; continued compliance with government regulations; general economic conditions; and the possibility that the Transactions do not close due to the failure to achieve the necessary closing conditions. Most of these factors are outside the control of Kitara and Future Ads and are difficult to predict. The information set forth herein should be read in light of such risks. Neither Kitara nor Future Ads assumes any obligation to update the information contained in this press release except as required by law.
Contact:
Bob Regular
Kitara Media
(201) 539-2200