Cartesian, Inc. (NASDAQ:CRTN) Files An 8-K Entry into a Material Definitive Agreement

Cartesian, Inc. (NASDAQ:CRTN) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01. Entry into a Material Definitive Agreement.

On April 17, 2017, Cartesian, Inc. (the Company) entered into a
letter agreement (the Letter Agreement) with Andrew Jim Kelley
Glasspool, Stephen Mark Upton, Mobiflux, Gary Marshall, Lionel
Tranchard and Jean-Marc Racine (collectively, the Sellers). The
Letter Agreement relates to the prior acquisition by the Company
of Farncombe France SARL and Farncombe Technology Limited
(collectively, the Farncombe Entities) from the Sellers to the
Share Purchase Agreement dated July 22, 2015 (the Purchase
Agreement) among the Company and the Sellers. The letter
agreement is effective as of April 4, 2017.
Under the Purchase Agreement, the purchase consideration for the
capital stock of the Farncombe Entities included, in addition to
consideration payable at Closing, cash payable after Closing upon
determination of the net working capital of the Farncombe
Entities (the Deferred Consideration) and the contingent right of
Sellers to receive additional cash and shares of Company common
stock to an earn-out (the Earn-Out) based upon the performance of
the Farncombe Entities after Closing. The aggregate amount
potentially payable to the Earn-Out consisted of cash in an
amount up to 719,483 pounds sterling (approximately US$0.9
million based on an exchange rate of 1.000 = US$1.255 as of April
17, 2017) and up to 461,055 shares of Company common stock.
In the Letter Agreement, the parties agreed to a final
determination of the Deferred Consideration, to which the Company
agreed to pay to Sellers an additional amount equal to any amount
received by the Company following the date of the Letter
Agreement in respect of repayment of a loan of 50,000
(approximately US$53,000 based on an exchange rate of 1.000 =
US$1.063 as of April 17, 2017) made to a third party by Farncombe
Technology Limited prior to the closing under the Purchase
Agreement. The parties also agreed that the Earn-Out target was
expected to be achieved, and that the Company would pay 50% of
the Earn-Out consideration described above to the Sellers no
later than July 31, 2017. The Company also agreed in separate
agreements that performance-based awards granted to two of the
Sellers as employees of the Company based upon achievement of the
Earn-Out would be paid in full.
The foregoing description of the Letter Agreement, which is
attached hereto as Exhibit 2.1 and incorporated by reference
herein, does not purport to be complete and is qualified in its
entirety by reference to the Letter Agreement.
Item 3.02. Unregistered Sales of Equity Securities.
The information contained in Item 1.01 is hereby incorporated by
reference into this Item 3.02.
The shares of Company common stock to be issued to the Earn-Out
have not been registered under the Securities Act of 1933, as
amended (Securities Act), in reliance on the exemption in
Regulation S promulgated under the Securities Act and on the
private offering exemption of Section 4(a)(2) of the Securities
Act. The Company is issuing the shares of its common stock in a
private offering to a limited number of Sellers who the Company
believes are sophisticated, are located outside of the United
States and are not “U.S. Persons.” The Sellers agreed in the
Purchase Agreement to customary restrictions on resale under
applicable securities laws and additional resale restrictions
specified in the Purchase Agreement.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
Exhibit
No.
Description
2.1
Letter Agreement, effective April 4, 2017, among
Cartesian, Inc. and the Sellers referenced therein.
99.1
Press Release dated April 19, 2017.


About Cartesian, Inc. (NASDAQ:CRTN)

Cartesian, Inc., formerly The Management Network Group, Inc., is a provider of professional services and technical solutions to the communications, digital media and technology sectors. The Company has three segments: the North America segment, the EMEA segment and the Strategic Alliances segment. The North America and EMEA segments include the Company’s operational, technology and software consulting services inside of North America and outside of North America, respectively. Both the segments offer management consulting, custom developed software and technical services. The Strategic Alliances segment includes the Company’s around the world commercial activities undertaken with third-party service or solutions providers. It provides a portfolio of consulting services and managed solutions to clients in the communications, media and technology industries, including technical consultancy; revenue and cost management; technology solutions, and investment advisory services.

Cartesian, Inc. (NASDAQ:CRTN) Recent Trading Information

Cartesian, Inc. (NASDAQ:CRTN) closed its last trading session 00.000 at 0.775 with 14,206 shares trading hands.

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