Item 2.01 Completion of Acquisition or Disposition of Assets.
On July 16, 2020, Turning Point Brands, Inc. ("TPB") completed its previously
announced merger (the "Merger") with Standard Diversified Inc. ("SDI") in
accordance with the terms of the Agreement and Plan of Merger and
Reorganization, dated as of April 7, 2020 (the "Merger Agreement") by and among
TPB, SDI, and Standard Merger Sub, LLC, a wholly owned subsidiary of TPB
("Merger Sub"). Pursuant to the terms described in the Merger Agreement, SDI
merged with and into Merger Sub, with Merger Sub surviving the Merger as a
wholly owned subsidiary of TPB.
Subject to the terms and conditions of the Merger Agreement, at the effective
time of the Merger, each share of SDI's Class A Common Stock and SDI's Class B
Common Stock (collectively, the "SDI Common Stock") issued and outstanding
immediately prior to the effective time of the Merger (the "Effective Time") was
converted into the right to receive 0.52095 shares of TPB's Voting Common Stock
("TPB Common Stock"). As a result of the Merger, the SDI Common Stock, which
traded under the symbol, "SDI", has ceased trading on, and is being delisted
from, the NYSE American.
Immediately after the Merger, there were approximately 19,221,796 shares of TPB
Common Stock outstanding. Immediately after the Merger, (i) SDI's stockholders
as of immediately prior to the Effective Time owned approximately 41.27% of the
outstanding TPB Common Stock and approximately 41.27% of the voting power of TPB
and (ii) Standard General L.P. ("SG") (including affiliated individuals and
entities), the largest stockholder of SDI prior to the Merger, beneficially
owned approximately 33.52% of the outstanding TPB Common Stock and approximately
33.52% of the voting power of TPB. David Glazek is the Chairman of the Board of
Directors of TPB and a Partner of SG, and was a member of the Board of Directors
of SDI prior to the Merger. Arnold Zimmerman is a member of the Board of
Directors of TPB and was a member of the Board of Directors and a stockholder of
SDI prior to the Merger. Gregory H.A. Baxter is a member of the Board of
Directors of TPB and was the Executive Chairman, the Interim Chief Executive
Officer and a stockholder of SDI prior to the Merger.
In connection with the completion of the Merger, SG agreed to indemnify TPB with
respect to certain claims relating to Maidstone Insurance Company, an entity
that was previously owned by SDI and subsequently disposed of to the New York
State Department of Financial Services.
The shares of TPB Common Stock issuable to the former stockholders of SDI were
registered with the SEC on a Registration Statement on Form S-4 (File No.
333-238313), as amended.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Merger Agreement that was filed as Exhibit 2.1 to TPB's Current Report on Form
8-K filed with the SEC on April 8, 2020, and incorporated herein by reference.
Item 5.01 Changes in Control of Registrant.
The information set forth in Item 2.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 5.01.
Item 8.01 Other Events.
On July 16, 2020, TPB and SDI issued a joint press release announcing the
closing of the Merger. The joint press release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Number Description of Exhibit
99.1 Joint Press Release, dated July 16, 2020 (filed herewith)
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