COGINT, INC. (NASDAQ:COGT) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
The information set forth in Item 1.01 below is incorporated into this Item 1.01.
| Item 1.01 | Termination of a Material Definitive Agreement |
The information set forth in Item 1.01 below is incorporated into this Item 1.01.
| Item 1.01 | Completion of Acquisition or Disposition of Assets. |
On March26, 2018 (the “Distribution Date”), Cogint, Inc. (“Cogint”) completed the previously announced spin-off (the “Spin-off”) of its risk management business from its digital marketing business by way of a distribution of all the shares of common stock (the “Distribution”) of Cogint’s wholly-owned subsidiary, Red Violet, Inc. (“Red Violet”) on a pro rata basis to Cogint’s stockholders of record as of March19, 2018 (the “Record Date”) and certain warrant holders (the “Spin-off Participants”). In the Spin-off, each of the Spin-off Participants received one share of Red Violet common stock for every 7.5 shares of Cogint’s common stock held on the Record Date or to which they were entitled to under their warrant. Cogint distributed a total of 10,266,612 shares of Red Violet common stock to the Spin-off Participants. As a result of the Distribution, Red Violet is an independent public company and the Red Violet common stock will begin regular-way trading on The NASDAQ Capital Market under the symbol “RDVT” on March27, 2018. A Registration Statement on Form 10 relating to the Spin-off was filed by Red Violet with the Securities and Exchange Commission and was declared effective on March15, 2018.
The above description of the Spin-off does not purport to be complete and is qualified in its entirety by reference to the full text of the Separation and Distribution Agreement, which was previously filed as Exhibit 10.1 to Cogint’s Current Report on Form 8-K filed on February28, 2018, which is incorporated into this Item 1.01 by reference.
On March26, 2018, Fluent, LLC, a wholly-owned subsidiary of Cogint (“Fluent”), entered into a Limited Consent and Amendment No.6 to Credit Agreement (“Amendment”), among Fluent, as Borrower, Cogint, certain subsidiaries of Cogint party thereto, the financial institutions party thereto, as lenders, and Whitehorse Finance, Inc., as Administrative Agent (the “Administrative Agent”), amending Fluent’s term loan facility dated as of December8, 2015 among Fluent, the persons party thereto from time to time as guarantors, including Cogint, the financial institutions party thereto from time to time as lenders, and the Administrative Agent (as previously amended, the “Agreement”).
The Amendment, among other things, refinanced the existing term loan and Cogint’s existing promissory notes with a new term loan in the principal amount of $70,000,000 (“Term Loan”), provides for the Borrower to request additional incremental term loans in the aggregate principal amount of up to $25,000,000 (“Incremental Term Loan”) and permits the Borrower to enter into an asset based revolving credit facility having aggregate commitments of up to $10,000,000 (the “Revolver”), subject to the terms and conditions of the Amendment, and modifies certain other provisions set forth in the Agreement, including certain financial covenants and related definitions. The Term Loan was used in part to retire promissory notes entered into in December 2015, payable to certain stockholders in the amount of $10,000,000 plus accrued interest of $1,425,020. The Term Loan and the Incremental Term Loan (collectively, the “Term Loans”) are guaranteed by Cogint and the other direct and indirect subsidiaries of Cogint, excluding Red Violet, and are secured by substantially all of the assets of Cogint and its direct and indirect subsidiaries, including Fluent, in each case, on an equal and ratable basis. The new Term Loans accrue interest at the rate of: either, at Fluent’s option, LIBOR (subject to a floor of 0.50%) plus 7.00% per annum, or base rate plus 6.0% per annum, payable in cash. Principal amortization of the Term Loans will be $875,000 per quarter commencing with the fiscal quarter ending June30, 2018. The Term Loans mature on March26, 2023.
The above summary of the Amendment is qualified in its entirety by reference to the full text of the Amendment, filed as Exhibit10.2 to this Current Report on Form 8-K, and is incorporated herein by reference.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 above is incorporated into this Item 1.01.
| Item 1.01. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
As previously announced, the resignations of Dr.Phillip Frost and Steven D. Rubin, who resigned from their positions as directors of Cogint became effective March12, 2018 and the resignations of Michael Brauser, Robert N. Fried, and Robert Swayman, who resigned from their positions as directors of Cogint, the resignation of Derek Dubner, who resigned from his position as a director of Cogint and as Cogint’s Chief Executive Officer, and the resignations of Jeff Dell, Daniel MacLachlan, James Reilly and Jacky Wang, who resigned from their respective positions as Cogint’s Chief Information Officer, Chief Financial Officer, President and Chief Accounting Officer (the “Resignations”) became effective on the Distribution Date.
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In connection with the Resignations, the employment agreements of Messrs. Dell, Dubner, MacLachlan and Reilly were terminated on the Distribution Date.
As previously announced, in connection with the Spin-off, Ryan Schulke was appointed as Cogint’s Chief Executive Officer (Principal Executive Officer) and continued as a Cogint Director, Matthew Conlin was appointed as a Director and Cogint’s President, Ryan Perfit, was appointed Cogint’s Interim Chief Financial Officer (Principal Financial and Accounting Officer), and Don Patrick was appointed as Cogint’s Chief Operating Officer. All appointments were effective on the Distribution Date. Also, on the Distribution Date, Mr.Andrew Frawley became a Director of Cogint and was appointed to the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee.
Mr.Schulke is employed by Fluent to an Employment Agreement dated December8, 2015 (the “Schulke Agreement”). Mr.Schulke’s initial base salary was $260,000, which was increased to $300,000 effective February1, 2018. The agreement provides for a bonus of no less than 25% of annual salary based on achievement of Fluent and personal goals. Mr.Schulke was paid a bonus of $235,327 for 2017.
Mr.Conlin is employed by Fluent as its President to an Employment Agreement dated December8, 2015. Mr.Conlin’s initial base salary was $260,000, which was increased to $300,000 effective February1, 2018 (the “Conlin Agreement”). The Conlin Agreement provides for a bonus of no less than 25% of annual salary based on achievement of Fluent and personal goals. Mr.Conlin was paid a bonus of $235,327 for 2017.
Mr. Perfit is employed as Fluent’s Senior Vice President – Finance to an Employment Agreement dated January 16, 2012 (the “Initial Perfit Agreement”), which was amended on October 2, 2014 (the “Perfit Amendment,” and together with the Initial Perfit Agreement, the “Perfit Agreement”). The Perfit Amendment amended the terms under which Mr. Perfit is entitled to a change of control payment. Mr. Perfit’s annual salary is $250,000 plus a bonus based on individual and Fluent’s performance. Mr. Perfit was paid a bonus for 2017 of $172,017.
Mr.Patrick is employed by Fluent as its Chief Operating Officer to an Employment Agreement effective January8, 2018 (the “Patrick Agreement”). Mr.Patrick’s annual salary is $300,000 and he was awarded 75,000 restricted stock units in Cogint which vest over three years. The Patrick Agreement provides for a bonus of 40% of base salary based on achievement of Fluent and personal goals.
The Schulke Agreement, the Conlin Agreement, the Perfit Agreement, and the Patrick Agreement will remain in effect going forward and will be assigned to and assumed by Cogint.
The above summaries of the Schulke Agreement, the Conlin Agreement, the Initial Perfit Agreement, the Perfit Amendment and the Patrick Agreement are qualified in their entirety by reference to the full text of each agreement filed as Exhibits 10.3, 10.4, 10.5, 10.6, and 10.7 to this Current Report on Form 8-K, and are incorporated herein by reference.
In anticipation of the Spin-off and their assuming their respective executive officer positions, previously, Messrs Schulke, Conlin, Perfit, and Patrick were granted respectively, (1) 80,000, 80,000, 100,000, and 50,000 restricted stock units under the Company’s 2015 Stock Incentive Plan, which vest in three equal annual installments, beginning on March 1, 2019 and (2) 480,000, 480,000, 90,000, and 75,000 deferred stock units under the Company’s 2015 Stock Incentive Plan, which vested immediately but with delivery of the underlying shares in three annual installments commencing on March 27, 2019, which delivery may be ended if the employee is terminated with cause.
On March20, 2018, a definitive information statement for Red Violet was mailed to Cogint’s stockholders as of the Record Date and is incorporated into this Item 1.01 by reference to Exhibit 99.1 to Red Violet’s Current Report on Form 8-K filed on March 27, 2018.
| Item 1.01 | Financial Statements and Exhibits. |
| (b) | Pro Forma Financial Information |
Pro forma financial information of Cogint, adjusted to reflect the Spin-off of Red Violet, is included as Exhibit 99.2 to this Report.
(d)Exhibits
The following exhibits are furnished as part of this report:
| Exhibit No. |
Exhibit Description |
| 10.1 | Separation and Distribution Agreement dated February 27, 2018, by and among Cogint, Inc. and Red Violet, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February28,2018). |
| 10.2 | Limited Consent and Amendment No.6 to Credit Agreement (“Amendment”), among Fluent, as Borrower, the Company, certain subsidiaries of the Company, dated March 26, 2018. (Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission to a request for confidential treatment.) |
| 10.3 | Employment Agreement, by and between Fluent, LLC and Ryan Schulke, dated December8, 2015. |
| 10.4 | Employment Agreement, by and between Fluent, LLC and Matthew Conlin, dated December8, 2015. |
| 10.5 | Employment Agreement, by and between Fluent, Inc. and Ryan Perfit, dated January16, 2012. |
| 10.6 | Amendment to Employment Agreement, by and between Fluent, Inc. and Ryan Perfit, dated October2, 2014. |
| 10.7 | Employment Agreement by and between Fluent, LLC and Donald Patrick effective as of January8, 2018. |
| 99.1 | Information Statement of Red Violet, Inc., dated March 20, 2018. (Incorporated herein by reference to Exhibit 99.1 to Red Violet, Inc.’s Current Report on Form 8-K filed March 27, 2018). |
| 99.2 | Pro Forma Financial Information. |
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Cogint, Inc. ExhibitEX-10.2 2 d558991dex102.htm EX-10.2 EX-10.2 Exhibit 10.2 LIMITED CONSENT AND AMENDMENT NO. 6 TO CREDIT AGREEMENT This LIMITED CONSENT AND AMENDMENT NO. 6 TO CREDIT AGREEMENT (this Amendment) is entered into as of March 26,…To view the full exhibit click here