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

ME Staff 8-k

8 years ago

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

Item 1.01Entry Into a Material Definitive Agreement.

Agreement and Plan of Merger

On March 3, 2017, MeetMe, Inc., a Delaware corporation (the
Company), Two Sub One, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company (Merger Sub), Ifwe
Inc., a Delaware corporation (Ifwe), and Shareholder
Representative Services LLC, a Colorado limited liability
company, solely in its capacity as the Shareholders
Representative, entered into an Agreement and Plan of Merger (the
Merger Agreement). Capitalized terms used herein but not
otherwise defined have the meaning set forth in the Merger
Agreement.

At the closing of the Merger (the Closing), to the Merger
Agreement, and upon the terms and subject to the conditions
thereof, Merger Sub will merge with and into Ifwe (the
Merger), with Ifwe surviving the Merger as a wholly owned
subsidiary of the Company (the Effective Time).

Merger Consideration

The Merger Consideration to be paid by the Company on the Closing
Date, subject to certain adjustments in the Merger Agreement, is
$60 million in cash.

Effect on Ifwe Stock

At the Effective Time, and subject to the terms and conditions of
the Merger Agreement:

		each share of Ifwes issued and outstanding Series B-1 Preferred Stock, unless converted to Ifwe common stock, par value $0.0001 per share (Common Stock), prior to the Effective Time, will be automatically converted into the right to receive, in accordance with the liquidation terms set forth in the Merger Agreement, an amount equal to the Initial Merger Consideration Percentage multiplied by $1.1545;

		each share of Ifwes issued and outstanding Series B Preferred Stock, unless converted to Common Stock prior to the Effective Time, will be automatically converted into the right to receive, in accordance with the liquidation terms set forth in the Merger Agreement, an amount equal to the Initial Merger Consideration Percentage multiplied by $0.5981;

each share of Ifwes issued and outstanding Series A-2
Preferred Stock, unless converted to Common Stock prior to
the Effective Time, will be automatically converted into
the right to receive, in accordance with the liquidation
terms set forth in the Merger Agreement, an amount equal to
the Initial Merger Consideration Percentage multiplied by
$0.45;

		each share of Ifwes issued and outstanding Series A-1 Preferred Stock, unless converted to Common Stock prior to the Effective Time, will be automatically converted into the right to receive, in accordance with the liquidation terms set forth in the Merger Agreement, an amount equal to the Initial Merger Consideration Percentage multiplied by $0.4447;

		each share of Ifwes issued and outstanding Common Stock will be automatically converted into the right to receive the Per Share Consideration multiplied by the Initial Merger Consideration Percentage (the Per Share Merger Consideration);

		each outstanding Ifwe stock option to purchase shares of Common Stock (Common Option) that is vested as of immediately prior to the Effective Time and has an exercise price that does not exceed the Per Share Consideration for Common Stock (Vested Common Option) shall be cancelled and converted into the right to receive, for each share of Common Stock subject to such Vested Common Option, a payment be equal to the Initial Merger Consideration Percentage multiplied by the amount by which the Per Share Merger Consideration exceeds the per share exercise price of such Vested Common Option, multiplied by the number of shares of Common Stock subject to such Vested Common Option;

		each outstanding Ifwe restricted stock unit (Restricted Stock Unit) that is vested as of immediately prior to the Effective Time (Vested Restricted Stock Unit) shall be cancelled and converted into the right to receive, for each share of Common Stock subject to such Vested Restricted Stock Unit, a payment be equal to the Per Share Merger Consideration multiplied by the Initial Merger Consideration Percentage; and

		each (i) unvested IfweCommon Optionand (ii) unvested Restricted Stock Unit will be cancelled without payment of any consideration.

Representations and Warranties, Covenants

Each of the Company and Ifwe has made customary representations
and warranties in the Merger Agreement and has agreed to
customary covenants regarding the operation of the business of
Ifwe and its Subsidiaries prior to the Effective Time. The
parties have also agreed to use commercially reasonable efforts
to consummate the Merger.

Closing Conditions

Consummation of the Merger is subject to certain conditions,
including, without limitation, the accuracy of the
representations and warranties (subject to customary materiality
qualifiers) and the absence of any Company Material Adverse
Effect with respect to Ifwe, compliance with its covenants and
agreements contained in the Merger Agreement (subject to
customary materiality qualifiers), the Companys receipt of
certain financing necessary to fund the Merger Consideration (the
Company Financing Condition), the receipt of voting and
support agreements or support agreements from a specified
percentage of Ifwes outstanding shares of Common Stock and
Preferred Stock, Vested Restricted Stock Units, Vested Common
Options as of the Closing Date as well as the receipt of certain
required third party consents.

Termination

The Merger Agreement may be terminated prior to the Closing upon
the occurrence or non-occurrence of certain events, including the
following:

by the Company or Ifwe if the Closing does not occur on or
before 11:59 p.m. New York time on July 30, 2017 (the
Termination Date);

by the Company or Ifwe if the other party breaches any of
its representations and warranties in the Merger Agreement
and that breach is not curable or not cured within 15
business days of receiving notice of such breach; and

by Ifwe if the Closing does not occur on or before the
Termination Date and all of joint closing conditions and
the Companys closing conditions have been satisfied other
than the Company Financing Condition, have been met or
waived, subject to certain restrictions as set forth in the
Merger Agreement (the Ifwe Financing Termination
Right).

If Ifwe terminates the Merger Agreement to the Ifwe Financing
Termination Right, the Company shall pay to Ifwe a fee equal to
$2 million in cash.

The foregoing description of the Merger Agreement is not complete
and is qualified in its entirety by reference to the Merger
Agreement, which is attached as Exhibit 2.1 to this report and
incorporated herein by reference. The representations, warranties
and covenants of the parties contained in the Merger Agreement
have been made solely for the benefit of the parties thereto. In
addition, such representations, warranties and covenants (i) have
been made only for purposes of the Merger Agreement, (ii) have
been qualified by confidential disclosures made by Ifwe to the
Company in connection with the Merger Agreement, (iii) are
subject to materiality qualifications contained in the Merger
Agreement which may differ from what may be viewed as material by
investors, (iv) were made only as of the date of the Merger
Agreement or such other date as is specified in the Merger
Agreement and (v) have been included in the Merger Agreement for
the purpose of allocating risk between the contracting parties
rather than establishing matters as facts. Accordingly, the
Merger Agreement is included with this report only to provide
investors with information regarding the terms of the Merger
Agreement, and not to provide investors with any other factual
information regarding the parties or their respective businesses.
Investors should not rely on the representations, warranties or
covenants, or any descriptions thereof, as characterizations of
the actual state of facts or condition of the parties or any of
their respective subsidiaries or affiliates. Moreover,
information concerning the subject matter of the representations
and warranties may change after the date of the Merger Agreement,
which subsequent information may or may not be fully reflected in
the Companys public disclosures. Accordingly, you should read the
representations and warranties in the Merger Agreement not in
isolation but only in conjunction with the other information
about the Company and Ifwe that is or will be included in
reports, statements and other filings that the Company will file
with the Securities and Exchange Commission in connection with
the Merger.

Consulting Agreement

to the Merger Agreement, the Company entered into a Consulting
Agreement, dated March 3, 2017, with Dasharath Gopinath, Chief
Executive Officer of Ifwe (the Consulting Agreement),
whereby the Company will retain Mr. Gopinath as a consultant to
perform certain transitional services for the Company beginning
on the first business day following the Closing and ending on the
earlier of (A) the one year anniversary of the Closing or (B) the
termination of the Consulting Agreement to the terms therein. In
exchange for performing for the Company the transitional services
outlined in the Consulting Agreement, the Company will pay to Mr.
Gopinath a fee of $350,000. Mr. Gopinath will also be eligible to
receive (i) a cash bonus of up to $750,000 payable in four
quarterly installments over the course of the term of the
Consulting Agreement and, (ii) on the one year anniversary of the
Closing, a cash bonus of up to $750,000 payable if certain
performance targets and other conditions are met. The
effectiveness of the Consulting Agreement is conditioned upon the
occurrence of the Closing.

Credit Agreement

On March 3, 2017 (the Effective Date), in connection with
the Merger, the Company entered into a credit agreement (the
Credit Agreement) with the several banks and other
financial institutions party thereto (the Lenders) and
JPMorgan Chase Bank, N.A., as administrative agent (the
Agent). The Credit Agreement provides for a $15 million
revolving credit facility (the Revolving Credit Facility)
and a $15 million term loan facility (the Term Loan
Facility, and together with the Revolving Credit
Facility, the Credit Facilities). Capitalized terms
used herein but not otherwise defined have the meaning set forth
in the Credit Agreement.

The Company intends to use the proceeds under the Credit
Facilities for general purposes, including the Merger. The
Company will also use proceeds of the Revolving Credit Facility
to finance working capital needs and for general corporate
purposes.

The commitments of the Lenders in respect of the Credit
Facilities and the initial extension of credit thereunder are
conditioned upon satisfaction of certain conditions precedent,
including, among other things, the consummation of the Merger.

Amounts under the Revolving Credit Facility may be borrowed,
repaid and re-borrowed from time to time until the maturity date
of the Credit Agreement on March 3, 2019. The Term Loan Facility
is subject to quarterly amortization of principal in an amount
equal to $1,875,000 per quarter commencing June 30, 2017 and
continuing through maturity. In the event that the Companys LTM
EBITDA falls below a certain threshold, the amount available to
the Company under the Revolving Credit Facility is subject to a
borrowing base equal to 80% of the Companys eligible accounts
receivable less reserves established by the Agent as further
described in the Credit Agreement. The Credit Facilities are
subject to mandatory prepayment with 100% of the net proceeds
received from the issuance of indebtedness, subject to certain
exceptions for indebtedness permitted by the Credit Agreement,
and from asset sales, casualty insurance, and condemnation awards
or similar recoveries, subject to certain exceptions for
reinvestment of such proceeds contained in the Credit Agreement.
Voluntary prepayments and commitment reductions of the Credit
Facilities under the Credit Agreement are permitted at any time
without payment of any prepayment fee upon proper notice and
subject to minimum dollar amounts.

At the Companys election, loans made under the Credit Facilities
will bear interest at either

(i)

a base rate (Base Rate) plus an applicable margin or

(ii)

a London interbank offered rate (LIBO Rate) plus an
applicable margin, subject to adjustment if an event of
default under the Credit Agreement has occurred and is
continuing.

The Base Rate means the highest of

(a) the Agents prime rate,

(b) the federal funds effective rate plus 0.50% and

AnyEurodollar loans made under the Revolving Credit Facility will
bear interest at the LIBO Rate plus an applicable margin of
2.50%, and the Base Rate loans made under the Revolving Credit
Facility will bear interest at the Base Rate plus an applicable
margin of 1.50%. Any Eurodollar loans made under the Term Loan
Facility will bear interest at the LIBO Rate plus an applicable
margin of 2.75%, and the Base Rate loans made under the Term Loan
Facility will bear interest at the Base Rate plus an applicable
margin of 1.75%.

The Companys present and future domestic subsidiaries (the
Guarantors) will guarantee the obligations of the Company
and its subsidiaries under the Credit Facilities. The obligations
of the Company and its subsidiaries under the Credit Facilities
are secured by all of the assets of the Company and the
Guarantors, subject to certain exceptions and exclusions as set
forth in the Credit Agreement and other loan documents.

The Credit Agreement contains certain affirmative and negative
covenants that are binding on the Company and its subsidiaries,
including, but not limited to, restrictions (subject to specified
exceptions and qualifications) on the ability of the Company and
its subsidiaries to incur indebtedness, to create liens, to merge
or consolidate, to make dispositions, to make restricted payments
such as dividends, distributions or equity repurchases, to make
investments, to prepay other indebtedness, to enter into certain
transactions with affiliates, or to enter into any burdensome
agreements or to make changes in the nature of the business.

In addition, the Credit Agreement requires the Company to abide
by certain financial covenants calculated for the Company and its
subsidiaries on a consolidated basis. Specifically, the Credit
Agreement requires that the Company and its subsidiaries not:

Permit the Funded Indebtedness to EBITDA Ratio (as defined
in the Credit Agreement) as of the last day of any fiscal
quarter ending during any period set forth below, to be
greater than the ratio set forth below opposite such
period:

Period	Ratio

Effective Date through 1 year anniversary thereof	2.00:1.00

All times thereafter	1.50:1.00

Permit the Fixed Charge Coverage Ratio (as defined in the
Credit Agreement), for any period of four consecutive
fiscal quarters ending on the last day of any fiscal
quarter during the term hereof, to be less than 1.50:1.00.

The Credit Agreement contains customary events of default (which
are in some cases subject to certain exceptions, thresholds,
notice requirements and grace periods). The Credit Agreement also
contains certain representations, warranties and conditions, in
each case as set forth in the Credit Agreement.

The foregoing descriptions of the Credit Agreement do not purport
to be complete and are qualified in their entirety by reference
to the Credit Agreement, which is filed as Exhibit 10.1 to this
Current Report on Form 8-K and incorporated herein by reference.

Item 2.03Creation of Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of
Registrant.

(a)

The information set forth in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03.

Item 5.02Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.

(b)

On February 28, 2017, the Company and Jonah Harris, Chief
Technology Officer of the Company, agreed that Mr. Harris would
transition out of the Chief Technology Officer role and into a
transitional employment role anticipated to last approximately
ninety days.

Item 7.01 Regulation FD Disclosure.

Investor Communications

In connection with entry into the Merger Agreement, several
investor communications were prepared by the Company.

The Company issued a press release, dated March 6, 2017,
announcing, among other things, the entry into the Merger
Agreement, the text of which is filed herewith and incorporated
by reference into this Item 7.01. Regulation FD Disclosure. In
addition, as discussed in the press release dated March 6, 2017,
the Company is making investor presentation materials available
on its website.

The text of the Companys investor presentation materials filed
herewith is incorporated by reference into this Item 7.01.
Regulation FD Disclosure.

The information furnished to Item 7.01 of this Current Report
shall not be considered filed for purposes of Section 18 of the
Exchange Act or otherwise subject to the liability of such
section, nor shall it be incorporated by reference into future
filings by the Company under the Securities Act of 1933, as
amended, or under the Exchange Act, unless the Company expressly
sets forth in such future filing that such information is to be
considered filed or incorporated by reference therein. This
information shall not be deemed an admission as to the
materiality of such information that is required to be disclosed
solely by Regulation FD.

Cautionary Statement Regarding Forward-Looking
Statements

Certain statements in this report are forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995, including the expected completion of the Merger and
the time frame in which this will occur. All statements other
than statements of historical facts contained herein are
forward-looking statements. The words believe, may, estimate,
continue, anticipate, intend, should, plan, could, target,
potential, project, is likely, expect and similar expressions, as
they relate to the Company, are intended to identify
forward-looking statements. The Company has based these
forward-looking statements largely on its current expectations
and projections about the proposed Merger. Important factors that
could cause actual results to differ from those in the
forward-looking statements include Ifwe shareholder approval of
the Merger or that other conditions to the closing of the Merger
may not be satisfied, the potential impact on the business of
MeetMe or Ifwe due to the announcement of the Merger, the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement, issues
related to whether the Commissioner will issue a permit to issue
securities and general economic conditions. Further information
on the Companys risk factors is contained in the Companys filings
with the Securities and Exchange Commission, including the Form
10-K for the year ended December 31, 2015, the Form 10-Q for the
quarter ended June 30, 2016 and the Form 8-K filed on October 4,
2016. Any forward-looking statement made by the Company herein
speaks only as of the date on which it is made. Factors or events
that could cause the Companys actual results to differ may emerge
from time to time, and it is not possible for the Company to
predict all of them. The Company undertakes no obligation to
publicly update any forward-looking statement, whether as a
result of new information, future developments or otherwise,
except as may be required by law.

Item 8.01 Other Events.

New Appointments

On February 28, 2017, Niklas Lindstrom joined the Company as
Chief Technology Officer and Richard Friedman joined the Company
as Senior Vice President of Engineering.

The press release announcing Messrs. Lindstroms and Friedmans
appointments is attached as Exhibit 99.1 hereto and incorporated
herein by reference.

Risk Factors

The following risk factors are provided to update the risk
factors of the Company previously disclosed in periodic reports
filed with the Securities and Exchange Commission, including its
Annual Report onForm 10-Kfor the year ended December 31, 2015,
its Quarterly Report onForm 10-Qfor the quarter ended June 30,
2016 and the Form 8-K filed on October 4, 2016:

Risks Relatingtothe Proposed Merger

The pending Merger is subject to a number of
conditions to our and
Ifwes obligations, which,
if not fulfilled, may result in termination of the Merger
Agreement.

The Merger Agreement contains a number of customary conditions to
complete the acquisition, including that certain representations
and warranties be accurate, that certain covenants be fulfilled,
that there are no legal prohibitions against completion of the
acquisition, and that Ifwe stockholders have adopted the Merger
Agreement. Many of the conditions to complete the Merger are not
within either our or Ifwes control and neither company can
predict when or if these conditions will be satisfied.

If the Merger is not consummated by
July 30, 201
either we or
Ifwe may terminate the
Merger Agreement.

Either MeetMe or Ifwe may terminate the Merger Agreement if the
Merger has not been consummated on or before 11:59 p.m. New York
time on July 30, 2017. However, the right to terminate the Merger
Agreement will not be available to (i) any party whose breach of
any representation, warranty, covenant or agreement set forth in
the Merger Agreement has been the cause of, or resulted in, the
failure to consummate the Merger prior to July 30, 2017 or (ii)
the Company if we fail to satisfy the Company Financing
Condition.

Failure to complete the Merger could negatively
affect our share price and our future business and financial
results.

We cannot provide assurance that the conditions to the completion
of the pending acquisition of Ifwe will be satisfied in a timely
manner or at all. If our pending acquisition of Ifwe is not
completed, our share price could fall to the extent that our
current price reflects an assumption that we will complete the
pending acquisition. Furthermore, if the acquisition is not
completed, our ongoing business may be adversely affected, and we
will be subject to several risks, including the following:

having to pay certain costs relating to the proposed
Merger, such as legal, accounting, financial advisor and
filing fees;

our management focused on the Merger instead of on pursuing
other opportunities that could be beneficial to us without
realizing any of the benefits of the Merger having been
completed;

our failure to retain key employees during the pendency of
the Merger;

the failure to consummate the acquisition may result in
negative publicity and a negative impression of us in the
investment community; and

any disruptions to our business resulting from the
announcement of the Merger, including any adverse changes
in our relationships with our advertisers, partners and
employees, may continue or intensify in the event the
acquisition is not consummated.

If the Merger is not completed, there can be no assurance these
risks will not materialize and will not materially affect our
business, financial results and share price.

The pendency of the Merger could adversely affect the
business and operations of MeetMe.

In connection with the pending Merger, some of our advertisers
may delay or defer decisions, which could negatively affect our
revenues, earnings, cash flows and expenses, regardless of
whether the Merger is completed. Similarly, our current and
prospective employees may experience uncertainty about their
future roles with the combined company following the Merger,
which may materially adversely affect our ability to attract or
retain key personnel during the pendency of the Merger.

Risks Relating to the Combined Company

If the proposed Merger closes, we may be unable to
integrate
Ifwes business with ours
successfully and realize the anticipated benefits of the
acquisition.

The anticipated benefits we expect from the pending Merger are,
necessarily, based on projections and assumptions about the
combined businesses of MeetMe and Ifwe, which may not materialize
as expected or which may prove to be inaccurate. The value of our
common stock following the completion of the pending acquisition
could be adversely affected if we are unable to realize the
anticipated benefits from the acquisition on a timely basis or at
all. Achieving the benefits of the pending acquisition of Ifwe
will depend, in part, on our ability to integrate the business
and operations of Ifwe successfully and efficiently with our
business. The challenges involved in this integration, which will
be complex and time-consuming, include the following:

the inability to successfully integrate Ifwes business with
ours in a manner that permits us to achieve the synergies
and other benefits anticipated to result from the
acquisition;

the challenge of integrating complex systems, operating
procedures, technology, and other assets of the two
companies in a manner that minimizes any adverse impact on
advertisers, service providers, employees, and other
constituencies;

diversion of the attention of our and MeetMes management
and other key employees;

the challenge of integrating the workforces of the two
companies while maintaining focus on providing consistent,
high quality service and running an efficient operation;

disruption of, or the loss of momentum in, our ongoing
business;

liabilities that are significantly larger than we currently
anticipate and unforeseen increased expenses or delays
associated with the acquisition, including transition costs
to integrate the two businesses that may exceed the costs
that we currently anticipate;

maintaining productive and effective employee
relationships;

limitations prior to the completion of the acquisition on
the ability of our management and the management of Ifwe to
conduct planning regarding the integration of the two
companies;

the increased scale of our operations resulting from the
acquisition;

retaining key employees of our company and Ifwe; and

obligations that we mayhave to counterparties of Ifwe that
couldarise as a result of the change in control of Ifwe.

If we do not successfully manage these issues and the other
challenges inherent in integrating Ifwe, then we may not achieve
the anticipated benefits of the acquisition of Ifwe and our
revenue, expenses, operating results and financial condition
could be materially adversely affected.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
2.1		Agreement and Plan of Merger, dated as of March 3, 2017, by and amongMeetMe, Inc., Two Sub One, Inc., Ifwe Inc. and Shareholder Representative Services, LLC*
10.1		Credit Agreement, dated as of March 3, 2017, with the several banks and other financial institutions party thereto and JPMorgan Chase Bank, N.A., as administrative agent
99.1		Press Release issued on March 6, 2017
99.2		Investor Presentation dated March 6, 2017

*	Schedules and other similar attachments have been omitted to Item601(b)(2) of Regulation S-K, which include the Company Disclosure Schedule (as defined in the Merger Agreement). The signatory hereby undertakes to furnish supplementally copies of any of the omitted schedules and attachments upon request by the SEC.

to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

	MEETME, INC.


Date: March 6, 2017	By:	/s/Geoffrey Cook
	Name:Geoffrey Cook
	Title:Chief Executive Officer

EXHIBITS

Exhibit No.		Description
2.1		Agreement and Plan of Merger, dated as of March 3, 2017, by and among MeetMe, Inc., Two Sub One, Inc., Ifwe Inc. and Shareholder Representative Services, LLC*
10.1		Credit Agreement, dated as of March 3, 2017, with the several banks and other financial institutions party thereto and JPMorgan Chase Bank, N.A., as administrative agent
99.1		Press Release issued on March 6, 2017
99.2		Investor Presentation dated March 6, 2017

*	Schedules and other similar attachments have been omitted

About MeetMe, Inc. (NASDAQ:MEET)
MeetMe, Inc. is a social media technology company that owns and operates the MeetMe mobile applications and meetme.com. The Company is a location-based social network for meeting new people both on the Web and on mobile platforms, including on iPhone, Android, iPad and other tablets that facilitate interactions among users. The Company provides users with access to a menu of resources that promote social interaction, information sharing and other topics of interest. The Company offers online marketing capabilities, which enable marketers to display their advertisements in different formats and in different locations. The Company’s social networking products include Profile, Chat and Friends. The Company’s social discovery products include Feed, which is the Company’s location-based stream communication feature, and Meet. The Company has approximately 4.97 million monthly active users (MAUs) and approximately 1.19 million daily active users (DAUs). MeetMe, Inc. (NASDAQ:MEET) Recent Trading Information
MeetMe, Inc. (NASDAQ:MEET) closed its last trading session up +0.26 at 5.07 with 1,009,771 shares trading hands.