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 Forte's common stock (the "Forte Common Stock") and each share of Forte's preferred stock (the "Forte Preferred Stock" and together with Forte Common Stock, the "Forte Capital Stock") outstanding immediately prior to the Effective Time, excluding any dissenting shares but including any shares of Forte Capital Stock issued pursuant to the Pre-Closing Financing (as defined below) 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 Forte Capital Stock (each a "Forte Option") that is outstanding and unexercised immediately prior to the Effective Time under Forte's 2018 Equity Incentive Plan (the "Forte Plan"), whether or not vested, will be converted into and become an option to purchase Company Common Stock, and the Company will assume the Forte Plan and each such Forte Option in accordance with the terms of the Forte Plan and the terms of the stock option agreement by which such Forte Option is evidenced (but with changes to such documents as the Company and Forte mutually agree are appropriate to reflect the assumption of the Forte Options by the Company to purchase shares of Company Common Stock). The number of shares of Company Common Stock subject to each Forte Option assumed by the Company will be determined by multiplying (A) the number of shares of Forte Common Stock that were subject to such Forte 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 Forte Option assumed by the Company will be determined by dividing (A) the per share exercise price of Forte Common Stock subject to such Forte 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 Forte 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 Forte Option will otherwise remain unchanged.
The equityholders of Forte immediately before the Merger (inclusive of investors
in the Pre-Closing Financing) are expected to own approximately 74.5% 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 25.5% of
the aggregate number of outstanding shares of Company Common Stock immediately
after the Closing on a fully-diluted treasury stock method basis, subject to
certain assumptions, including, but not limited to, (x) the proceeds of the
Pre-Closing Financing being equal to at least
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Following the Closing,
The Merger Agreement contains customary representations, warranties and covenants made by Forte and the Company, including covenants relating to obtaining the requisite approvals of the stockholders of Forte and the Company, indemnification of directors and officers, and Forte'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 (i) the amendment of the Company's certificate of incorporation to effect a reverse stock split of all outstanding shares of Company Common Stock at a reverse stock split ratio in the range of 1-for-8 to 1-for-12 (or as otherwise mutually agreed to by the Company and Forte) for the purpose of maintaining compliance with Nasdaq listing standards, (ii) unless mutually agreed between the parties otherwise, the sale, transfer, license, assignment or divestment of certain of the Company's assets and (iii) 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 Forte stockholders in connection with the Merger and related transactions and the change of control of the Company resulting therefrom, in each case pursuant to the Nasdaq rules (the "Company Stockholder Matters").
The Closing is subject to satisfaction or waiver of certain conditions
including, among other things, (i) the required approvals by the parties'
stockholders, (ii) the accuracy of the representations and warranties, subject
to certain materiality qualifications, (iii) compliance by the parties with
their respective covenants, (iv) no law or order preventing the Merger and
related transactions, (v) the closing of the Pre-Closing Financing in which the
aggregate proceeds to Forte are not less than
Item 7.01 Regulation FD Disclosure.
Representatives of the Company presented to investors on
The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished pursuant to Item 7.01 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this item of this report.
Item 8.01 Other Events. Press Release
On
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, without
limitation, statements related to the anticipated consummation of the proposed
transactions, and other statements that are not historical facts. Any statements
contained in this communication that are not statements of historical fact may
be deemed to be forward-looking statements. Forward-looking statements may be
identified by the use of words referencing future events or circumstances such
as "expect," "intend," "plan," "anticipate," "believe," "will," and similar
expressions and their variants. These forward-looking statements are based upon
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There can be no assurance that
Important Additional Information Will be Filed with the
In connection with the proposed transactions between Forte and
You may obtain free copies of the registration statement, proxy statement and
all other documents filed or that will be filed with the
Participants in the Solicitation
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No offer or Solicitation
This report will not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities in connection with the proposed merger shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 2.1 Agreement and Plan of Merger and Reorganization, datedFebruary 19, 2020 , by and among the Company, Merger Sub and Forte. 10.1 Form of Company Support Agreement, datedFebruary 19, 2020 , by and between Forte and each of the parties named in each agreement therein. 10.2 Form of Forte Support Agreement, datedFebruary 19, 2020 , by and between the Company and each of the parties named in each agreement therein. 10.3 Form of Lock-Up Agreement, datedFebruary 19, 2020 , by each of the parties named in each agreement therein. 99.1 Slide Presentation and Script, datedFebruary 20, 2020 . 99.2 Joint Press Release of the Company and Forte, datedFebruary 19, 2020 , incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 8-K filed onFebruary 20, 2020 . * Schedules and exhibits to the Merger Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to theSecurities and Exchange Commission upon request.
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