Item 1.01. Entry into a Material Definitive Agreement
In connection with the consummation of the acquisition by A-Mark Precious
Metals, Inc., a Delaware corporation (the "Company"), of JM Bullion, Inc., a
Delaware corporation ("JMB"), disclosed in Item 2.01 below, the Company entered
into the employment agreement with Mr. Michael Wittmeyer (the "Wittmeyer
Employment Agreement"), the lock-up agreements and the registration rights
agreement described in Item 1.01 of the Current Report on Form 8-K filed by the
Company on February 11, 2021 (the "February 11, 2021 Form 8-K"). The description
of these agreements is incorporated by reference from the February 11, 2021 Form
8-K. The text of these agreements are included as exhibits to the Stock Purchase
Agreement (the "Stock Purchase Agreement") among the Company and the other
former stockholders of JMB (the "Other JMB Stockholders"), dated February 8,
2011, filed as Exhibit 2.1 to the February 11, 2021 Form 8-K.
Item 2.01. Completion of Acquisition or Disposition of Assets
On March 19, 2021, the Company consummated the acquisition (the "JMB
Acquisition") of the approximately 79.47% of the issued and outstanding shares
of JMB that it did not previously own, in accordance with the terms of the Stock
Purchase Agreement. JMB is an e-commerce retailer of gold, silver, copper,
platinum and palladium products. The Company acquired the shares from the Other
JMB stockholders.
Mr. Gregory Roberts, the chief executive officer of the Company, has served on
the board of JMB since 2017. In addition to owning approximately 20.53% of the
shares of JMB prior to the JMB Acquisition, the Company was a supplier of
product to JMB, and also provided certain logistical services to JMB.
For purposes of the JMB Acquisition, the JMB business was valued at $174.0
million, which value was arrived at in arms-length negotiations between the
Company and the Other JMB Stockholders. This implied a value of approximately
$138.3 million for the approximately 79.47% of JMB that the Company did not
previously own. The adjusted preliminary purchase price was $136.8 million,
consisting of $106.5 million in cash and $30.3 million in common stock of the
Company. In accordance with the Stock Purchase Agreement, the cash portion of
the purchase price was reduced by 20.53% of the amount of a cash redemption made
by JMB to its stockholders (excluding the Company) immediately prior to the
closing of the JMB Acquisition. Taking into account this reduction, along with
certain other adjustments specified in the Stock Purchase Agreement, the total
amount paid at closing consisted of $82.3 million of cash and $30.3 million of
the Company's common stock, valued as of the signing of the Stock Purchase
Agreement. The Company financed the cash portion of the purchase price with cash
on hand and from net proceeds from the Company's public offering of common
stock, which closed on March 8, 2021.
A copy of the press release announcing the consummation of the JMB Acquisition
is attached hereto as Exhibit 99.1.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Effective upon the closing of the JMB Acquisition, Mr. Wittmeyer, the chief
executive officer of JMB and a significant stockholder of JMB prior to the
closing, and Mr. Kendall J. Saville, the chairman of the board and a significant
stockholder of JMB prior to the closing, were appointed to the Company's Board
of Directors. These appointments were made pursuant to the Stock Purchase
Agreement, which provides that the Other JMB Stockholders have the right to
designate two directors to the Company's Board. Mr. Saville is an independent
director who will serve on the Audit Committee of the Board.
At the closing of the JMB Acquisition, the Company made a cash payment to Mr.
Wittmeyer of $19.7 million and issued to Mr. Wittmeyer 323,787 shares of the
Company's common stock in consideration for his shares of JMB, and paid to Mr.
Saville $8.6 million and issued to Mr. Saville 140,853 shares of the Company's
common in consideration for his shares of JMB. Mr. Wittmeyer and Mr. Saville may
be entitled to additional cash payments if cash is released to the Other JMB
Stockholders from escrow in accordance with the terms of the Stock Purchase
Agreement.
Also at the closing of the JMB Acquisition, JMB and Mr. Wittmeyer entered into
the Wittmeyer Employment Agreement.
Effective March 19, 2021, the Company also appointed Ms. Monique Sanchez to the
Company's Board of Directors. Ms. Sanchez is an independent director who will
serve on the Audit Committee and the Nominating and Governance Committee of the
Board.
In connection with their appointments, the Compensation Committee of the Board
granted to each of Mr. Saville and Ms. Sanchez options to acquire 3,000 shares
of common stock of the Company, at an exercise price of $39.74 per share,
vesting ratably over three years, and with a maximum term of ten years.
Item 8.01. Other Events
On March 8, 2021, the Company and the Other JMB Stockholders entered into a
letter agreement with respect to the Stock Purchase Agreement. Under the terms
of the letter agreement, the Other JMB Stockholders agreed to jointly and
severally indemnify
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the Company against approximately 79.47% of any liabilities arising out of an
intrusion into JMB's systems that occurred in the first half of 2020, including
a related complaint, to the extent the liabilities of JMB exceed insurance
proceeds (net of costs). After the application of any available insurance
proceeds, the obligations of the Other JMB Stockholders will be satisfied out of
the transaction escrow, to the extent then available, and thereafter, by the
Other JMB Stockholders. The Company anticipates that any such liabilities of JMB
will be covered by insurance and views the letter agreement as precautionary
only.
Item 9.01. Financial Statements and Exhibits
(a) Financial statements of businesses or funds acquired:
Reference is made to the Company's Registration Statement on Form S-3, File No.
333-249060, as amended (the "Form S-3 Registration Statement"), for certain
financial statements of JMB.
(b)Pro forma financial information:
Reference is made to the Form S-3 Registration Statement for certain pro forma
financial information related to the JMB Acquisition.
(d) Exhibits:
Exhibit Description
99.1 Press Release of A-Mark Precious Metals, Inc., dated March 19, 2021.
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