Item 1.01 Entry into a Material Definitive Agreement
Acquisition of 1-2-3.tv Group
On
The purchase price for the enterprise value of the 1-2-3.tv Group is
The Purchase Agreement provides that the Sellers may receive additional
consideration from the Subsidiary, if earned, in the form of earn-out payments
in the amount of up to
The Purchase Agreement contains customary representations, warranties and covenants by each of the parties. The Purchase Agreement also provides that the parties will indemnify each other for certain liabilities arising under the Purchase Agreement, subject to various limitations, including, among other things, thresholds, caps and time limitations. The Subsidiary has obtained representation and warranty insurance that provides exclusive coverage for certain breaches of, and inaccuracies in, representations and warranties made by Sellers in the Purchase Agreement, subject to exclusions, deductibles and other terms and conditions.
The closing of the Acquisition is subject to certain closing conditions,
including German and Austrian regulatory approvals and the completion of a
financing in the amount of not less than
This description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The Purchase Agreement is described herein to provide investors with information regarding the terms of the Acquisition. The representations, warranties and covenants contained in the Purchase Agreement were made solely for the purposes of the Purchase Agreement; were made only as of specified dates and do not reflect subsequent information; were made solely for the benefit of the parties thereto; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures that modify, qualify and create exceptions to such representations, warranties and covenants; were made for the purposes of allocating risk between the parties thereto instead of establishing matters of fact; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties, their affiliates or their respective businesses. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Purchase Agreement, which subsequent . . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Concurrent with the closing of the Acquisition, the Subsidiary expects to enter
into the Vendor Loan Agreement with certain Sellers (the "Lenders") pursuant to
which a portion of the purchase price for the Acquisition will be paid in the
form of the Vendor Loan. The Vendor Loan has a
The Company's and the Subsidiary's obligations under the Vendor Loan are secured
by the assets of
Amounts due under the Vendor Loan may be accelerated upon an Event of Default (as defined in the Vendor Loan), such as a sale of the Subsidiary or its assets and the occurrence of bankruptcy, if not otherwise waived or cured.
The Vendor Loan contains covenants and conditions, including, among other things, restrictions on the Company's and the Subsidiary's ability to incur additional senior indebtedness.
3
This description of the form of Vendor Loan does not purport to be complete and is qualified in its entirety by reference to the form of Vendor Loan, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
On
Item 8.01 Other Events
Description of 1-2-3.tv Group Business
The 1-2-3.tv Group is a digitally-driven home shopping and inspirational
e-commerce specialist with a unique omnichannel live and automated auction
offering. The 1-2-3.tv Group caters primarily to the television retailing
markets in
Founded in 2004, the 1-2-3.tv Group now has over 120 employees across its two
locations in Grünwald and Braunschweig,
Following consummation of the acquisition, instead of the 1-2-3.tv Group
pursuing the traditional geographic expansion of entering more European
television retailing marketplaces, the Company plans to use 1-2-3.tv Group's
expertise and proprietary technologies to enter the inspirational e-commerce
market in
The 1-2-3.tv Group generated net revenues of
4 Risk Factor Updates
As part of the filing of this Current Report on Form 8-K, the Company intends to
supplement its risk factors, including those contained in Part I, Item 1A of the
Company's Annual Report on Form 10-K for the year ended
Public Offering Press Release
On
Pro Forma Senior Debt Net Leverage Ratio Calculations
A calculation of our pro forma senior debt net leverage ratio as of
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
· The historical consolidated audited financial statements of 123tv Beteiligungs
GmbH as of and for the years endedDecember 31, 2020 andDecember 31, 2019 are filed as Exhibit 99.2 and incorporated herein by reference. The attached financial statements of 123tvBeteiligungs GmbH have been prepared in accordance with generally accepted accounting principles inGermany ("German GAAP"). Accounting principles generally accepted inGermany depart materially from accounting principles generally accepted inthe United States of America ("U.S. GAAP"). The notes to the financial statements provide a summary of the nature and amounts of significant differences between German GAAP andU.S. GAAP. The audit of these 123tvBeteiligungs GmbH financial statements was conducted in accordance withU.S. generally accepted auditing standards.
· The historical financial statements of 123tv
the six months endedJune 30, 2021 are filed as Exhibit 99.3 and incorporated herein by reference. The attached financial statements of 123tvBeteiligungs GmbH have been prepared in accordance with German GAAP. Accounting principles generally accepted inGermany depart materially fromU.S. GAAP. The notes to the financial statements provide a summary of the nature and amounts of significant differences between German GAAP andU.S. GAAP.
(b) Pro Forma Financial Information
The following unaudited pro forma condensed combined financial information of
· Unaudited pro forma condensed combined balance sheets as of
· Unaudited pro forma condensed combined statements of operations for the year
ended
· Unaudited pro forma condensed combined statements of operations for the six
months endedJuly 31, 2021 (d) Exhibits
The following exhibits are being filed with this Current Report on Form 8-K:
5 Exhibit No. Description 2.1 Sale and Purchase Agreement Relating to 1-2-3.tv Group, datedSeptember 22, 2021 betweenEmotion Invest GmbH & Co. KG ,BE Beteiligungen Fonds GmbH & Co. geschlossene Investmentkommanditgesellschaft, Iris Capital Fund II, SCUR-Alpha 1359GmbH and the Company 10.1 Form of Vendor Loan Agreement among SCUR-Alpha 1359GmbH (to be renamed iMedia&123tvHolding GmbH ) (as borrower),iMedia Brands, Inc. and1-2-3.tv GmbH (as guarantors) andEmotion Invest GmbH & Co. KG ,BE Beteiligungen Fonds GmbH & Co. geschlossene Investmentkommanditgesellschaft and Iris Capital Fund II 10.2 Loan and Security Agreement, datedJuly 30, 2021 , by and among theiMedia Brands, Inc. , as the lead borrower, certain of its subsidiaries party thereto as borrowers,Siena Lending Group LLC and the other financial institutions party thereto from time to time,Siena Lending Group LLC , as agent, andVVI Fulfillment Center, Inc. ,EP Properties, LLC andPortal Acquisition Company , as guarantors (incorporated by reference to Exhibit 10.1 on Form 8-K filed onAugust 5, 2021 ) 10.3 First Amendment and Consent Agreement, dated as ofSeptember 20, 2021 , by and amongiMedia Brands, Inc. , certain of its subsidiaries party thereto as borrowers,Siena Lending Group LLC , as agent, andVVI Fulfillment Center, Inc. ,EP Properties, LLC andPortal Acquisition Company , as guarantors 23.1 Consent ofMazars GmbH & Co. KG 99.1 Press Release datedSeptember 22, 2021 related to acquisition 99.2 The historical audited financial statements of 123tv BeteiligungsGmbH for the years endedDecember 31, 2020 and 2019 99.3 Financial Statements of 123tvBeteiligungs GmbH for the six months endedJune 30, 2021 andJune 30, 2020 99.4 Unaudited pro forma condensed combined balance sheet as ofJuly 31, 2021 and unaudited pro forma condensed combined statements of operations for the six months endedJuly 31, 2021 and for the year endedJanuary 31, 2021 99.5 Risk Factors 99.6 Press Release datedSeptember 22, 2021 related to senior note offering 99.7 Calculation of pro forma senior debt net leverage ratio as ofJuly 31, 2021 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This Current Report on Form 8-K, including any exhibits filed or furnished
herewith, may contain certain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Any statements contained
herein that are not statements of historical fact, including statements
regarding the expected impact of COVID-19 on television retailing are
forward-looking. The Company often use words such as anticipates, believes,
estimates, expects, intends, seeks, predicts, hopes, should, plans, will and
similar expressions to identify forward-looking statements. These statements are
based on management's current expectations and accordingly are subject to
uncertainty and changes in circumstances. Actual results may vary materially
from the expectations contained herein due to various important factors,
including (but not limited to): the Company's ability to complete a public
offering of debt securities on terms favorable to the Company, the Company's
ability to integrate and operate the business of 1-2-3.tv Group and
international operations in general, variability in consumer preferences,
shopping behaviors, spending and debt levels; the general economic and credit
environment, including COVID-19; interest rates; seasonal variations in consumer
purchasing activities; the ability to achieve the most effective product
category mixes to maximize sales and margin objectives; competitive pressures on
sales and sales promotions; pricing and gross sales margins; the level of cable
and satellite distribution for the Company's programming and the associated fees
or estimated cost savings from contract renegotiations; the Company's ability to
establish and maintain acceptable commercial terms with third-party vendors and
other third parties with whom the Company has contractual relationships, and to
successfully manage key vendor and shipping relationships and develop key
partnerships and proprietary and exclusive brands; the ability to manage
operating expenses successfully and the Company's working capital levels; the
ability to remain compliant with the Company's credit facilities covenants;
customer acceptance of the Company's branding strategy and its repositioning as
a video commerce Company; the ability to respond to changes in consumer shopping
patterns and preferences, and changes in technology and consumer viewing
patterns; changes to the Company's management and information systems
infrastructure; challenges to the Company's data and information security;
changes in governmental or regulatory requirements; including without
limitation, regulations of the
6
© Edgar Online, source