Item 1.01 Entry into a Material Definitive Agreement.
On February 7, 2020, in connection with Franchise Group, Inc.'s (the "Company")
repurchases of Vitamin Shoppe, Inc.'s outstanding 2.25% Convertible Senior Notes
due 2020 (the "VSI Convertible Notes"), certain investors (each, an "Investor"
and, collectively, the "Investors") provided the Company with an aggregate of
approximately $65,925,422.32 of equity financing in order for Valor Acquisition,
LLC, a subsidiary of the Company, to fund the repurchase or redemption of the
VSI Convertible Notes and to make interest payments on the VSI Convertible Notes
that are not so repurchased or redeemed until their maturity and to also fund
general, working capital and cash needs of the Company, in cash by wire transfer
of immediately available funds, through purchases of shares of common stock of
the Company at $12.00 per share under the Equity Commitment Letter, dated August
7, 2019, between the Company and Tributum, L.P. (as amended, the "ECL"), and
$23.00 per share in connection with a separate private placement of shares of
common stock (collectively, the "Equity Financing") pursuant to certain
subscription agreements (each, a "Subscription Agreement") entered into by each
Investor with the Company. Pursuant to the ECL, Tributum, L.P. assigned certain
of its obligations thereunder to provide a portion of such Equity Financing to
the Investors and certain other investors. The foregoing summary is subject to,
and qualified in its entirety by, the full text of the forms of Subscription
Agreement, which are incorporated herein by reference to Exhibit 10.1 to this
Current Report on Form 8-K.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure set forth under Item 1.01 of this Current
Report on Form 8-K concerning the issuance of shares of the Company's common
stock in connection with the Equity Financing, which entitled the Investors to
receive, in the aggregate, approximately 3,877,964.65 shares of the Company's
common stock (the "Equity Securities").
The Company relied on an exemption from registration for the issuances and sales
described above pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of
the United States Securities Act of 1933, as amended (the "Securities Act"),
because the foregoing issuances and sales did not involve a public offering, the
Investors are "accredited investors" and/or had access to similar documentation
and information as would be required in a registration statement under the
Securities Act and the Investors acquired the Equity Securities for investment
only and not with a view towards, or for resale in connection with, the public
sale or distribution thereof. The Equity Securities were offered without any
general solicitation by the Company or its representatives. No underwriters or
agents were involved in the foregoing issuances and sales and the Company paid
no underwriting discounts or commissions. The Equity Securities issued and sold,
are subject to transfer restrictions, and the certificates evidencing each
Equity Security, if any, will contain an appropriate legend stating that such
Equity Security has not been registered under the Securities Act and may not be
offered or sold absent registration or pursuant to an exemption therefrom. The
Equity Securities were not registered under the Securities Act and such Equity
Securities may not be offered or sold in the United States absent registration
or an exemption from registration under the Securities Act and any applicable
state securities laws.
To the extent required, the information set forth in Item 1.01 to this Current
Report on Form 8-K is incorporated herein by reference.
Item 8.01 Other Events.
On February 7, 2020, the Company completed the repurchase of approximately $60.4
million in aggregate principal amount of the outstanding VSI Convertible Notes
for an aggregate purchase price of approximately $60.6 million, which includes
accrued interest. Following such repurchase, approximately $59,000 in aggregate
principal amount of the VSI Convertible Notes remain outstanding. The VSI
Convertible Notes have a maturity date of December 1, 2020. Upon the maturity of
the VSI Convertible Notes that remain outstanding, the Company will use a
portion of the remaining funds from the Equity Financing to redeem such
outstanding VSI Convertible Notes pursuant to and in accordance with the terms
of the Indenture, dated as of December 9, 2015, by and between Vitamin Shoppe,
Inc. and Wilmington Trust, National Association.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is filed with this Current Report on Form 8-K:
10.1 Forms of Subscription Agreement
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