SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 3, 2012 (November 27, 2012)
(Exact name of Registrant as Specified in its Charter)
10801 Mastin, Suite 920, Bldg # 8
Overland Park, Kansas 66210
(Address of principal executive offices, Zip code)
(Registrant’s telephone number, including area code)
(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):
This Form 8-K and other reports filed by Ceelox, Inc., a Nevada corporation (the “Registrant”) from time to time with the Securities and Exchange Commission (collectively the “Filings”) contain or may contain forward-looking statements and information based upon the beliefs of, and currently available to, the Registrant’s management as well as estimates and assumptions made by the Registrant’s management. When used in the Filings the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” or the negative of these terms and similar expressions and variations thereof as they relate to the Registrant or the Registrant’s management identify forward-looking statements. Such statements reflect the current view of the Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other risk factors relating to the Registrant’s industry, the Registrant’s operations and results of operations and any businesses that may be acquired by the Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Although the Registrant believes that the expectations reflected in the forward-looking statements contained in the Registrant’s Filings are reasonable, the Registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Registrant does not intend to update any of the forward-looking statements contained herein to conform these statements to actual results.
Item 1.01 Entry into a Material Definitive Agreement.
On November 27, 2012, the Company entered into an asset purchase agreement (“Agreement” or “Asset Sale”) with AllCom, a Nevada corporation (“AllCom” or “Seller”). The Company has agreed to purchase all of the assets (“Purchased Assets”) of AllCom (“Acquisition”) in exchange for the issuance of that number of shares of Common Stock such that, following such issuance, the Seller shall own forty-eight percent (48%) of all the issued and outstanding shares of Common Stock of the Company as of the closing date of the Acquisition, (the “Closing Purchase Price”).
In addition to the Purchase Price, the Company has also agreed to loan (the “Loan”) to Seller an aggregate of $1,800,000 (“Loan Amount”) prior to the closing of the Acquisition. The Seller shall use the Loan Amount in order to ensure the delivery of the Purchased Assets to the Company free and clear of all liens (other than permitted liens) in accordance with the terms and conditions of the Agreement. The Loan Amount shall be paid to Seller as follows:
(i) On or before March 31, 2013, in order to fund the Loan, the Company shall be obligated to pay to the Seller at least fifteen percent (15%) of the net proceeds actually received by the Company pursuant to the closing of any debt or equity financing; provided, however, that the Seller shall not be entitled to any amounts, in the aggregate, exceeding the Loan Amount.
(ii) If prior to the closing of the Acquisition the funded amount of the Loan is less than one million eight hundred thousand dollars ($1,800,000), then, at closing of the Acquisition, the Buyer shall pay to the Seller an amount equal to the shortfall.
The Loan shall be evidenced by a promissory note (“Note”) that shall become due and payable on the one-year anniversary date of the closing of the Acquisition. The Note shall be secured by that number of shares of Common Stock representing the Purchase Price with a value equal to the Loan Amount. For purposes hereof, the shares of Common Stock representing the Closing Purchase Price shall initially be valued at $0.25 per share. Such share value shall be reassessed every quarter following the issuance of the Note based on the thirty (30) day volume weighted average price of the Company’s common stock (“VWAP”) measured as of the end of such quarter, and the number of shares of Common Stock by which the Note is secured shall be adjusted accordingly; provided, however, that at no time shall the share value be less than $0.25 per share. The Seller will pledge as security, a maximum of seven million two hundred thousand (7,200,000) shares of the Company’s Common Stock received as part of the Purchase Price. Notwithstanding the foregoing, the number of shares will adjusted based on the quarterly review as described above. As long as any balance on the Note remains outstanding, the Seller may not sell any shares of Common Stock representing the Closing Purchase Price to a third party without first offering such shares to the Company in accordance with the terms of the Agreement.
The Loan Amount may also be satisfied by the Seller if, on or prior to the closing of the Acquisition, the Seller (x) enters into a contract with a third party whereby it will receive a down payment and/or revenue sharing in at least an amount equal to the Loan Amount, or (y) receives a loan in the minimum amount of one million eight hundred thousand dollars ($1,800,000) from a third party, subject to such terms and conditions as agreed between the Seller and such third party (a “Third Party Loan”).
The Issuer shall be obligated to issue to the Seller as additional consideration, those shares of Common Stock of the Company set forth below (the “Earn-out Purchase Price,” and together with the Closing Purchase Price and the Loans (if any), the “Purchase Price”):
The Company will not assume any liabilities of the Seller in connection with the Acquisition.
The closing of the Acquisition is expected to occur on March 31, 2013, or as soon as reasonably practicable following the satisfaction or waiver of all of the conditions precedent to Closing (other than conditions with respect to actions that will take place at the Closing itself), including among other conditions as more fully set forth in the Agreement receipt by the Seller of an amount equal to the Loan Amount (whether in connection with the issuance of the Note or otherwise), the closing of the transaction contemplated by the Send Global Purchase Agreement entered into by and between the Company, Send Global and ITEKNIK on October 25, 2012 as previously reported on Form 8-K on October 31, 2012, and the Company shall have raised funds pursuant to the closing of a financing(s) providing the Company with at least $4,000,000 in proceeds, or at such other date, time and place as the Seller and the Company shall mutually agree in writing. The Auditors shall have completed the Audit of Seller and there shall be no material deviation from what is shown in the Financial Statements, which shall be solely determined by the Auditors. The cost for the Audit will be underwritten by the Company.
Neither the Seller nor any of its affiliates, nor any of their respective representatives, shall (a) make any offer or proposal to any third party to, directly or indirectly, (i) sell or otherwise transfer any Purchased Assets or (ii) effect any recapitalization, refinancing, restructuring, merger, consolidation or other business combination involving the Seller’s business or the Purchased Assets (any of the foregoing hereinafter referred to as an “Alternative Proposal”), (b) solicit or encourage the initiation of (including by way of furnishing or providing access to information) any
inquiries or proposals regarding any Alternative Proposal, (c) have any discussions with or provide any non-public information or data to any third party that would encourage, facilitate or further any effort or attempt to make or implement an Alternative Proposal or (d) enter into any agreement with respect to any Alternative Proposal made by any third party. Seller and its affiliates have also agreed to cease any discussions with any third-party relating to the foregoing.
Seller has agreed not to solicit any of the Company’s employees or compete with the Company for a period of three years after the closing of the Acquisition.
For a period of eighteen (18) months from the closing of the Acquisition, Seller has agreed not to sell any shares of Common Stock representing the Purchase Price, to a third party without first offering to sell such shares to the Company by delivering to the Company written notice of the proposed sale.
After the closing of the Acquisition, each of the Company and the Seller shall have the right to appoint to the Board of Directors of the Company (the “Board”) two (2) directors, and the parties shall use commercially reasonable efforts to cause such appointments to be effected as promptly as practicable following the Closing. In addition, the parties hereby agree that, as promptly as practicable following the Closing, the majority of the directors chosen by the Company and Seller shall nominate an individual to be appointed to the Board as an independent director. For the avoidance of doubt, as a condition to any appointment, all directors shall meet the qualification requirements to be a director under the current policies and procedures of the Company.
At the closing of the Acquisition, or as soon as reasonably practicable thereafter, the Company shall enter into employment agreements with four individuals, each of which are currently employees of AllCom.
The Agreement may be terminated and the Acquisition abandoned at any time prior to the Closing Date:
For a more complete description of the terms of the Agreement see Exhibit 99.1 attached hereto.
Item 9.01. Financial Statements and Exhibits.
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.