KUBIENT, INC. Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement and Transaction
On
At the effective time of the Merger (the "Effective Time"): (a) each share of Adomni's common stock (the "Adomni Common Stock") and each share of Adomni's preferred stock (the "Adomni Preferred Stock" and together with Adomni Common Stock, the "Adomni Capital Stock") outstanding immediately prior to the Effective Time, excluding any dissenting shares, will be automatically converted solely into the right to receive a number of shares of the Company's common stock ("Company Common Stock") equal to the exchange ratio described below; and (b) each option or other right to purchase shares of Adomni Capital Stock (each a "Adomni Option") that is outstanding and unexercised immediately prior to the Effective Time under Adomni's 2017 Stock Plan (the "Adomni Plan"), whether or not vested, will be converted into and become an option to purchase Company Common Stock, and the Company will assume the Adomni Plan and each such Adomni Option in accordance with the terms of the Adomni Plan and the terms of the stock option agreement by which such Adomni Option is evidenced (but with changes to such documents as the Company and Adomni mutually agree are appropriate to reflect the assumption of the Adomni Options by the Company to purchase shares of Company Common Stock). The number of shares of Company Common Stock subject to each Adomni Option assumed by the Company will be determined by multiplying (A) the number of shares of Adomni Common Stock that were subject to such Adomni Option, as in effect immediately prior to the Effective Time, by (B) the exchange ratio, and rounding the resulting number down to the nearest whole number of shares of Company Common Stock, and the per share exercise price for the Company Common Stock issuable upon exercise of each Adomni Option assumed by the Company will be determined by dividing (A) the per share exercise price of Adomni Common Stock subject to such Adomni Option, as in effect immediately prior to the Effective Time, by (B) the exchange ratio and rounding the resulting exercise price up to the nearest whole cent. Any restriction on the exercise of any Adomni Option assumed by the Company will continue in full force and effect and the term, exercisability, vesting schedule, accelerated vesting provisions, and any other provisions of such Adomni Option will otherwise remain unchanged. The exchange ratio is defined as (rounded to four decimal places) the quotient obtained by dividing (i) (A) the Purchase Price (as defined in the Merger Agreement) divided by (B) the number of Company Outstanding Shares (as defined in the Merger Agreement) by (ii) the Parent 30-Day VWAP (as defined in the Merger Agreement).
--------------------------------------------------------------------------------
The equityholders of Adomni immediately before the Merger are expected to own approximately 74% of the aggregate number of outstanding shares of Company Common Stock immediately after the consummation of the Merger (the "Closing"), and the equityholders of the Company immediately before the Merger are expected to own approximately 26% of the aggregate number of outstanding shares of Company Common Stock immediately after the Closing.
As additional consideration for the contemplated transactions set forth in the
Merger Agreement, the Company shall deposit a certain number of shares of
Company Common Stock with an exchange agent sufficient to make payments in the
following amounts: (a) if the audited net revenues of the combined business of
the Company and Adomni for the fiscal year ending
Following the Closing, Jonathan Gudai ("Gudai") will serve as the Company's
Chief Executive Officer and
The Merger Agreement contains a customary "no-shop" provision under which neither the Company nor Adomni is permitted to: (a) solicit any alternative acquisition proposals; (b) furnish any non-public information to any person in connection with or in response to any alternative acquisition proposal; (c) engage in any negotiations or discussions with any person with respect to any alternative acquisition proposal; (d) approve, endorse or recommend any alternative acquisition proposal; or (e) execute or enter into any agreement relating to any alternative acquisition proposal. The "no-shop" provision is subject to certain exceptions that permit the board of directors of the Company to comply with its fiduciary duties, which, under certain circumstances, would enable the Company to provide information to, and enter into discussions or negotiations with, third parties in response to any alternative acquisition proposals.
The Merger Agreement contains customary representations, warranties and covenants made by Adomni and the Company, including covenants relating to obtaining the requisite approvals of the stockholders of Adomni and the Company, indemnification of directors and officers, and Adomni's and the Company's conduct of their respective businesses between the date of signing the Merger Agreement and the Closing.
--------------------------------------------------------------------------------
In connection with the Merger, the Company will prepare and file a registration
statement on Form S-4 (the "Registration Statement"), in which a proxy statement
will be included as a prospectus (the "Proxy Statement") and seek the approval
of the Company's stockholders with respect to certain actions, including (a) the
issuance of Company Common Stock that represents (or are convertible into) more
than 20% of the shares of Company Common Stock outstanding immediately prior to
the Closing to the Adomni stockholders in connection with the Merger and related
transactions; and (b) the change of control of the Company resulting therefrom,
in each case pursuant to
The Closing is subject to satisfaction or waiver of certain conditions
including, among other things, (a) the required approvals by the parties'
stockholders; (b) the accuracy of the representations and warranties, subject to
certain materiality qualifications; (c) compliance by the parties with their
respective covenants, subject to materiality qualifications; (d) no law or order
preventing the Merger and related transactions; (e) the closing of
a pre-closing financing in which the aggregate proceeds to Adomni are not less
than
The Merger Agreement contains certain customary termination rights, including,
among others, (a) the right of either the Company or Adomni to terminate the
Merger Agreement if the Company's stockholders fail to adopt and approve the
Company Stockholder Matters; (b) the right of either party to terminate the
Merger Agreement if the other party's board of directors changes or withdraws
its recommendation in favor of the transactions; (c) the right of either party
to terminate the Merger Agreement if the Merger has not occurred by
Upon termination of the Merger Agreement by the Company or Adomni in certain
limited circumstances, a termination fee of
--------------------------------------------------------------------------------
The Merger Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company or Adomni. The Merger Agreement contains representations, warranties and covenants that the Company and Adomni made to each other as of specific dates. The assertions embodied in those representations, warranties and covenants were made solely for purposes of the Merger Agreement among the Company, Adomni and Merger Sub and may be subject to important qualifications and limitations agreed to by the Company and Adomni in connection with negotiating its terms, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Merger Agreement. Moreover, the representations and warranties may be subject to a contractual standard of materiality that may be different from what may be viewed as material to investors or security holders, or may have been used for the purpose of allocating risk between the Company and Adomni rather than establishing matters as facts. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures. For the foregoing reasons, no person should rely on the representations and warranties as statements of factual information at the time they were made or otherwise.
Promissory Note
Concurrently with the execution and delivery of the Merger Agreement, Adomni, as
borrower, issued to the Company, as lender, a secured promissory note (the
"Adomni Note") dated as of
Voting Agreements
Concurrently with the execution of the Merger Agreement, certain officers, directors and stockholders of Adomni (the "Adomni Supporting Stockholders") entered into voting agreements in favor of the Company covering approximately 63% of the outstanding shares of Adomni Capital Stock relating to the Merger (the "Adomni Voting Agreements"). The Adomni Voting Agreements provide, among other things, that the Adomni Supporting Stockholders will vote all of the shares of Adomni Capital Stock held by them (a) in favor of adopting the Merger Agreement and approving the Merger, the Contemplated Transactions (as defined in the Merger Agreement), the Company Stockholder Matters (as defined in the Merger Agreement), and the other actions and transactions contemplated by the Merger Agreement (b) against approval of any proposal made in opposition to, or in competition with, the Merger Agreement or the consummation of the Merger and (c) against any acquisition proposal involving a third party.
--------------------------------------------------------------------------------
Lock-Up Agreements . . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 2.1* Agreement and Plan of Merger and Reorganization, datedMay 24, 2023 , by and among the Company, Merger Sub and Adomni. 10.1 Form of Company Voting Agreement, datedMay 24, 2023 , by and between Adomni and each of the parties named in each agreement therein. 10.2 Secured Promissory Note, datedMay 24, 2023 , by and between the Company and Adomni. 10.3 Stock Pledge Agreement, datedMay 24, 2023 , by and among the Company, Jonathan Gudai andJonathan Fine . 10.4 Form of Lock-Up Agreement. * Schedules and exhibits to the Merger Agreement (other than the schedule of defined terms) have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
--------------------------------------------------------------------------------
© Edgar Online, source
