Item 8.01. Other Events
In a Form 8-K dated June 10, 2022, Electro-Sensors, Inc. ("ELSE" or
"Electro-Sensors") announced that it had entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Mobile X Newco, Inc., a Delaware
corporation and wholly owned subsidiary of ELSE (the "Merger Sub"), and Mobile X
Global, Inc., a Delaware corporation ("Mobile X") (together with ELSE and Merger
Sub, the "Parties"), pursuant to which Merger Sub will merge with and into
Mobile X, with Mobile X surviving the merger as a wholly owned subsidiary of
ELSE (the "Merger"). Mobile X Global, Inc. is a new entrant in the global mobile
industry founded by Peter Adderton. Mobile X plans to launch a new mobile brand
called Mobile X in the U.S. in 2022, enabled by a network access agreement with
a major carrier.
The June 10, 2022 Form 8-K contained a description of the Merger Agreement, as
well as other agreements. Electro-Sensors, Inc. stated that the description of
the Merger Agreement in the Form 8-K did not purport to be complete and was
qualified in its entirety by reference to the Merger Agreement filed as Exhibit
2.1 to the Form 8-K and incorporated into the Form 8-K by reference.
The Form 8-K also reported that in connection with the Merger Agreement, a
third-party institutional investor had entered into a commitment letter with
Mobile X to provide equity financing of up to $20.0 million upon closing of the
Merger in the form of convertible preferred stock. This commitment was subject
to diligence and definitive agreements satisfactory to the third-party
institutional investor, including an agreement for a $50.0 million equity line
of credit to be provided by the investor. By its terms, the commitment letter
originally would terminate on October 31, 2022.
Mobile X has informed Electro-Sensors that on September 20, 2022, Mobile X and
the third-party institutional investor entered into an amendment to the
commitment letter extending the commitment letter expiration date to January 31,
2023. The other terms and conditions of the commitment letter were not changed
and remain in effect.
Important Information and Where to Find It
A full description of the terms of the transaction will be provided in a proxy
statement/prospectus/consent solicitation statement included in a Form S-4
Registration Statement that Electro-Sensors will file with the SEC.
ELECTRO-SENSORS URGES INVESTORS, SHAREHOLDERS AND OTHER INTERESTED PERSONS TO
READ, WHEN AVAILABLE, THE PROSPECTUS/PROXY STATEMENT/CONSENT SOLICITATION
STATEMENT AS WELL AS OTHER DOCUMENTS FILED WITH THE SEC BECAUSE THESE DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION ABOUT ELECTRO-SENSORS, MOBILE X GLOBAL, AND
THE PROPOSED TRANSACTIONS. When final, the definitive proxy statement will be
mailed to Electro-Sensors' shareholders as of a record date to be established
for voting on the proposed transaction, and a definitive consent solicitation
statement will be sent to the MobileX shareholders. Shareholders will also be
able to obtain a copy of the documents (when available), without charge, by
directing a request to: Electro-Sensors, Inc., 6111 Blue Circle Drive,
Minnetonka, MN 55343. These documents, once available, can also be obtained,
without charge, at the SEC's website (www.sec.gov).
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Participants in the Solicitation
Electro-Sensors, Inc., Mobile X Global, Inc., and their respective directors and
executive officers may be considered participants in the solicitation of proxies
by Electro-Sensors, Inc. in connection with the proposed transaction.
Information about the directors and executive officers of Electro-Sensors, Inc.
is set forth in its Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, and its 2022 Proxy Statement, which were filed with the SEC
on March 31, 2022. Information regarding the persons who may, under SEC rules,
be deemed participants in the solicitation of proxies from Electro-Sensors'
shareholders in connection with the proposed merger will be included in the
definitive proxy statement/prospectus that Electro-Sensors intends to file with
the SEC.
Non-Solicitation
This Form 8-K does not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be unlawful prior to
the registration or qualification under the securities laws of that
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended, or an exemption therefrom.
Forward Looking Statements
This Form 8-K includes, or may be deemed to include, certain forward-looking
statements concerning Electro-Sensors, Mobile X Global and the proposed
transactions within the meaning of the Private Securities Litigation Reform Act
of 1995, including, but not limited to, statements regarding future financial
performance, future growth, and the development of future products and services;
the benefits of the proposed transactions, including anticipated growth and
synergies; the combined company's plans, objectives and expectations and
intentions; the expected timing of the proposed transactions; and future
acquisitions. These statements are based on current expectations or beliefs and
are subject to uncertainty and changes in circumstances. There can be no
guarantee that the proposed transactions described in this Form 8-K will be
completed, or that they will be completed as currently proposed, or at any
particular time. Actual results may vary materially from those expressed or
implied by the statements here due to changes in economic, business, competitive
or regulatory factors, and other risks and uncertainties affecting the operation
of Electro-Sensors as well as the business of Mobile X Global. Many of these
risks, uncertainties and contingencies related to Electro-Sensors are presented
in Electro-Sensors' Annual Report on Form 10-K and, from time to time, in
Electro-Sensors' other filings with the SEC. These and other risks related to
the business of Mobile X Global will be presented in the proxy
statement/prospectus/consent solicitation statement to be filed with the SEC.
The information here should be read considering these risks and the following
considerations: the ability of the merger parties to obtain definitive
investment documents and close on the equity investments necessary to complete
the merger, even with the extension of the commitment letter described above;
the ability of MobileX to successfully launch its business, attract subscribers,
and achieve the levels of customer service, revenues and costs that it currently
expects; the ability of the combined company to successfully maintain a Nasdaq
Capital Market listing; the ability of the combined company to successfully
access the capital markets to finance expansion and acquisitions; the ability of
the combined company to identify and acquire appropriate acquisition targets and
successfully integrate these companies into its operations; the ability of the
combined company to achieve synergies between its legacy sensor business and its
new MobileX business; the conditions to the closing of the merger may not be
satisfied or an event, change or other circumstance could occur that could give
rise to the termination of the merger agreement; the merger may involve
unexpected costs, liabilities or delays, resulting in the merger not being
consummated within the expected time period; risks that the announced merger may
disrupt current Electro-Sensors plans and operations or that the business or
stock price of Electro-Sensors may suffer as a result of uncertainty surrounding
the merger; the outcome of any legal proceedings related to the merger; and
Electro-Sensors or Mobile X Global may be adversely affected by other economic,
business, or competitive factors.
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