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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): January 3, 2019
(January 3, 2019)
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Issuer Direct Corporation
(Exact name of registrant as specified in its charter)
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Delaware
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1-10185
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26-1331503
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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500 Perimeter Park, Suite D, Morrisville, North Carolina
27560
(Address of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (919)
481-4000
N/A
(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))
Indicate
by check mark whether the registrant
is an emerging growth company as defined in in Rule 405 of
the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of
this chapter).
Emerging
growth company ☐
If an
emerging growth company, indicate by checkmark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Item 1.01 Entry into a Material Definitive Agreement.
On
January 3, 2019 (the “Closing Date”), Issuer Direct
Corporation, a Delaware corporation (the “Company”)
entered into an Asset Purchase Agreement (the “Purchase
Agreement”) with Onstream Media Corporation, a Florida
corporation (the “Seller”), whereby the Company
purchased certain assets related primarily to customer accounts,
intellectual property, fixed assets and assumed certain existing
contractual obligations related primarily to data processing and
storage, bandwidth and facility leases relating to the webcasting
business of the Seller (collectively, the
“Business”).
Under
the terms of the Purchase Agreement and on the Closing Date, the
Company paid the Seller a cash payment of $2,787,627 (the
“Cash Payment”). The Cash Payment is not subject to any
escrow conditions.
The
Purchase Agreement and the transaction contemplated thereby are not
subject to approval by the shareholders of the Company. The
Purchase Agreement contains standard representations and warranties
regarding the Seller and the Business and certain limited
representations and warranties regarding the Company. The Purchase
Agreement also contains indemnification provisions for the benefit
of the Company and the Seller. Neither the Company nor the Seller
shall be liable for more than $2,000,000 under the indemnification
provisions except in the case of fraud or willful misconduct. The
Seller and the Seller’s Chief Executive Officer and Chief
Financial Officer agreed to 5-year non-compete provisions as part
of the Purchase Agreement, subject to the exceptions set forth
below.
In
connection with the Purchase Agreement, the Company and the Seller
entered into two reseller agreements whereby the Seller shall
continue to utilize certain technology relating to the Business
with respect to portions of the Seller’s operations and
business which the Seller will be retaining after the Effective
Date. The reseller agreements each have five-year terms and may be
extended for an unlimited number of one-year terms thereafter. The
Company will receive 35% of all revenue generated from these
reseller agreements for the first two years and then receive 50% of
all revenue for the final three years and during any extension of
the term of the reseller agreements. The Seller’s performance
under the terms of these reseller agreements will not be violations
of the non-competition requirements set forth above. Also in
connection with the Purchase Agreement, the Company agreed to
exclusively use the Seller’s teleconferencing service for a
period of five years which may be extended for an unlimited number
of one-year terms thereafter for a discounted pricing
rate.
This
summary of certain terms of the Purchase Agreement does not purport
to be complete and is subject to, and qualified in its entirety by,
the full text of the Purchase Agreement, a copy of which is
attached hereto as Exhibit 10.1 and is hereby incorporated into
this Current Report on Form 8-K (this “Form 8-K”) by
reference.
The
Purchase Agreement has been included solely to provide investors
and security holders with information regarding its terms. It is
not intended to be a source of financial, business or operational
information, or to provide any other factual information, about the
Company, the Seller or their respective subsidiaries or affiliates.
The representations, warranties and covenants contained in the
Purchase Agreement are made only for purposes of the Purchase
Agreement and are made as of specific dates; are solely for the
benefit of the parties (except as specifically set forth therein);
may be subject to qualifications and limitations agreed upon by the
parties in connection with negotiating the terms of the Purchase
Agreement; and may be subject to standards of materiality and
knowledge applicable to the contracting parties that differ from
those applicable to investors or security holders. Investors and
security holders should not rely on the representations, warranties
and covenants or any description thereof as characterizations of
the actual state of facts or condition of the Company, the Seller
or any of their respective subsidiaries or affiliates. Moreover,
information concerning the subject matter of the representations,
warranties and covenants may change after the date of the Purchase
Agreement, as applicable, which subsequent information may or may
not be fully reflected in public disclosures.
Item 2.01. Completion of Acquisition or Disposition of
Assets.
The information set forth in Item 1.01of this Form 8-K is
incorporated herein by reference in its entirety.
Item 8.01. Other Events.
On January 3, 2019, the Company issued a press release announcing
the entry into the Purchase Agreement and the acquisition of the
Business. A copy of the press release is filed as
Exhibit 99.1 hereto and incorporated herein by reference in its
entirety.
Item 9.01. Financial Statements and
Exhibits.
(a) Financial statements of business
acquired.
(b) Pro forma
financial information.
Any financial statements and pro forma financial information
required by this Item will be filed by amendment to this Form 8-K
within 75 calendar days from the date that this Form 8-K must be
filed with the Securities and Exchange Commission.
(d) Exhibits
Asset Purchase
Agreement dated January 3, 2019 between Issuer Direct Corporation
and Onstream Media Corporation (schedules and exhibits identified
in the Purchase Agreement have been omitted pursuant to Item 601b.2
of Regulation S-K).
Press
release issued by Issuer Direct Corporation on January 3,
2019.
SIGNATURES
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.
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Issuer
Direct Corporation
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Date: January 3,
2019
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By:
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/s/ Brian R.
Balbirnie
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Brian R.
Balbirnie
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Chief Executive
Officer
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