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): April 29, 2015
PROPEL MEDIA, INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 000-55360 | 47-2133177 | ||
| (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 April 29, 2015, Propel Media, Inc., formerly known as Kitara Holdco Corp. (“Propel”), entered into a Second Amendment (the “Amendment”) to the Unit Exchange Agreement (the “Exchange Agreement”), dated as of October 10, 2014, by and among Propel, Kitara Media Corp. (“Kitara”), Future Ads LLC (“Future Ads”), and the former members of Future Ads (the “Transferors”).
As previously reported, on January 28, 2015, Propel consummated the transactions contemplated by the Exchange Agreement and by the Agreement and Plan of Reorganization (the “Reorganization Agreement”), dated as of October 10, 2014, by and among Kitara, Propel, and Kitara Merger Sub, Inc. Upon consummation of such transactions, (i) Kitara and Future Ads became wholly-owned subsidiaries of Propel, (ii) the former stockholders of Kitara and certain of the Transferors became stockholders of Propel and (iii) Propel became the new publicly traded company.
The Exchange Agreement provided that the consideration payable to the Transferors was subject to a post-closing adjustment based on the working capital and indebtedness of Future Ads and the working capital of Kitara as of the closing. Propel believes that the adjustment will result in an additional cash payment to certain of the Transferors, although the size of the adjustment has not been finally determined in accordance with the Exchange Agreement.
The Amendment modifies the payment date for the adjustment by extending such date to April 10, 2016, but allows the party paying the adjustment to make the payment prior to such date, if it so elects in its sole discretion. The Amendment also permits the party receiving payment of the adjustment, in its sole discretion, to further defer payment of the adjustment beyond April 10, 2016. The Amendment was entered into by the parties to provide Propel with additional flexibility with respect to its payment obligations during the next twelve months.
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.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit No. | Description | |
| 2.1 | Second Amendment, dated as of April 29, 2015, to the Unit Exchange Agreement, dated as of October 10, 2014, by and among Kitara Media Corp., Propel Media, Inc., formerly known as 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. |
| 2 |
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: May 5, 2015
| PROPEL MEDIA, INC. | ||
| By: | /s/ Robert Regular | |
| Name: Robert Regular | ||
| Title: Chief Executive Officer | ||
| 3 |
EXHIBIT INDEX
| Exhibit No. | Description | |
| 2.1 | Second Amendment, dated as of April 29, 2015, to the Unit Exchange Agreement, dated as of October 10, 2014, by and among Kitara Media Corp., Propel Media, Inc., formerly known as 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. |
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Exhibit 2.1
SECOND AMENDMENT TO
UNIT EXCHANGE AGREEMENT
This Second 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 April 29, 2015, by and between Kitara Media Corp., a Delaware corporation (“Kitara”), Propel Media, Inc., formerly known as 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 previously amended certain provisions of the Exchange Agreement in the First Amendment to Unit Exchange Agreement dated as of December 23, 2014; 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) Section 2.5(c) of the Exchange Agreement is hereby deleted in its entirety and replaced with the following:
“(c) Payment of Post-Closing Adjustment. Following the final determination of the Future Ads Working Capital, the Future Ads Indebtedness and the Kitara Working Capital in accordance with Sections 2.5(a) and 2.5(b), and no later than April 10, 2016 (the “Adjustment Due Date”), the Adjustment Amount shall be determined and paid by wire transfer of immediately available funds to such accounts as may be designated from time to time by the Transferors or Holdco, as applicable; provided, however, that the Adjustment Due Date may be extended by the payee under this paragraph, in the sole discretion of such payee, upon written notice to the payor under this paragraph setting forth such extended Adjustment Due Date. If the Adjustment Amount is a positive number, Holdco shall pay the Adjustment Amount to the Transferors. If the Adjustment Amount is a negative number, the Transferors shall pay the absolute value of the Adjustment Amount to Holdco.”
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.
| PROPEL MEDIA, INC. | ||
| 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/ Robert Regular | |
| Name: | Robert Regular | |
| 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 Second Amendment to Unit Exchange Agreement
| 3 |
| 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 Second Amendment to Unit Exchange Agreement
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