ProBility Media Corporation (OTCMKTS:PBYA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
The information inItem 2.01below regarding the Cranbury Exchange Agreement, Cranbury Note, Consulting Agreement and the Lock-Up Agreement (each as defined below), is incorporated in thisItem 1.01by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
Cranbury Acquisition
On July 31, 2017, we consummated the transactions contemplated by a Share Exchange Agreement (the “Cranbury Exchange Agreement”), by and between the Company, Cranbury Associates, LLC (“Cranbury”), and the sole member of Cranbury (the “Cranbury Member”). In connection with the closing of the transactions contemplated by the Cranbury Exchange Agreement (the “Cranbury Exchange”), we acquired 50% of the outstanding membership interests of Cranbury from the Cranbury Member in consideration for 784,313 shares of restricted common stock, valued at $400,000 on the closing date (the “Cranbury Shares”), and a promissory note in the amount of $100,000 (described below). The Cranbury Exchange has an effective date of May 1, 2017. The Cranbury Share Exchange Agreement included standard and customary representations, warranties and indemnification rights. The Cranbury Shares are to be held in escrow in order to secure the indemnification requirements of the Cranbury Member to the terms of the Cranbury Exchange Agreement, until January 1, 2018.
As additional consideration for agreeing to the terms of the transaction, we agreed to issue the Cranbury Member an additional $100,000 of shares of restricted common stock (based on the closing sales price of the Company’s common stock on July 31, 2018), in the event the revenue generated by Cranbury exceeds $2.0 million during the 12 calendar months ended July 31, 2018 (the “Cranbury Earn-Out” and the “Cranbury Earn-Out Shares”).
Cranbury, established in 2010, sells training and educational materials to governmental institutions and private sector markets in Brazil, Mexico, Columbia, Trinidad, and other international regions. The Company markets and represents approximately 40 major publishers in international markets.
We provided a Promissory Note (the “Cranbury Note”) to the Cranbury Member at closing, which evidences the principal amount of $100,000 owed to such Cranbury Member. The Cranbury Note accrues interest at the rate of 6% per annum (10% upon the occurrence of an event of default), beginning August 31, 2017, and is payable at the rate of $4,153 per month, beginning November 1, 2017, through the maturity date of such note, November 30, 2019. The Cranbury Note contains standard and customary events of default and may be prepaid at any time without penalty.
As part of the Cranbury Exchange, on and effective July 31, 2017, we entered into a Consulting Agreement with Ethan Atkin, the Cranbury Member (the “Consulting Agreement”). to the Consulting Agreement, which has a term of one year, we agreed to pay Mr. Atkin, $3,750 per month and Mr. Atkin agreed to provide us 120 hours of services the first three months of the term and 100 hours per month thereafter, in connection with the integration of Cranbury’s operations into those of the Company, the training of a new head of international sales at the Company, and introductions to contacts of Mr. Atkin and Cranbury in connection with Cranbury’s operations and the change in control and management. The agreement includes standard and customary work for hire, confidentiality, and trade secret provisions. In the event that the Consulting Agreement is terminated by Mr. Atkin, terminated by the Company for cause, or terminated due to Mr. Atkin’s death or disability, prior to 180 days after the closing date, the earn-out is terminated and no earn-out Shares are due.
The Cranbury Shares issued to the Cranbury Exchange Agreement are subject to a lock-up agreement (the “Lock-Up Agreement”), which prohibits the sale of any such shares for a period of one year and restricts the sale of any of the shares in any thirty day period, for an additional one year thereafter, to 10% of the total Cranbury Shares, on a rolling basis.
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The foregoing descriptions of the Cranbury Exchange Agreement, Cranbury Note, Consulting Agreement and Lock-Up Agreement, do not purport to be complete and are qualified in their entirety by reference to the Cranbury Exchange Agreement, Cranbury Note, Consulting Agreement and Lock-Up Agreement, copies of which are attached asExhibits 2.1, 10.1, 10.2, and 10.3, to this Current Report on Form 8-K, and incorporated in thisItem 2.01by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
See the discussion underItem 2.01 above with respect to the Cranbury Note, which is incorporated in thisItem 2.03in its entirety, by reference.
Item 3.02 Unregistered Sales of Equity Securities
As described above underItem 2.01, in connection with the closing of the Cranbury Share Exchange, we issued the Cranbury Shares to the Cranbury Member (which are being held in escrow to the Escrow Agreement described above), and agreed, subject to the requirements of the Cranbury Share Exchange Agreement, to issue the Cranbury Member the Cranbury Earn-Out Shares.
The Company claims (and will claim) an exemption from registration to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), for the offer and sale of the Cranbury Shares and Cranbury Earn-Out Shares, described above inItem 2.01, due to the fact that the foregoing offers and sales did not (and will not) involve a public offering, the recipient took (and will take) the securities for investment and not resale, the Company has taken (and will take) appropriate measures to restrict transfer, and the recipient (a) is an “accredited investor,” and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act.
Item 7.01 Regulation FD Disclosure.
On August 7, 2017, the Company issued a press release announcing the entry into and the closing of the transactions contemplated by the Cranbury Exchange Agreement and related matters as described above inItem 2.01. A copy of the press release is furnished as Exhibit 99.1 hereto.
The information responsive toItem 7.01of this Form 8-K and Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
| Exhibit | ||
| Number | Description of Exhibit | Filing |
| 2.1+ | Share Exchange Agreement by and among the Company, Cranbury Associates, LLC and the member of Cranbury Associates, LLC, dated July 31, 2017 and Effective May 1, 2017 | Filed herewith. |
| 10.1 | Promissory Note dated July 31, 2017, in the amount of $100,000, issued to Ethan Atkin, as Trustee of the Ethan Atkin Revocable Trust dated February 22, 2007 | Filed herewith. |
| 10.2 | Consulting Agreement with Ethan Atkin, dated July 31, 2017 | Filed herewith. |
| 10.3 | Lock-Up Agreement with Ethan Atkin, dated July 31, 2017 | Filed herewith. |
| 99.1 | Press Release Dated August 7, 2017 | Furnished herewith. |
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| + | Schedules and exhibits have been omitted to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that Probility Media Corporation may request confidential treatment to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished. |
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.
| Probility Media Corporation | |
| Date: August 24, 2017 | By:/s/ Evan M. Levine |
|
Evan M. Levine, Chief Executive Officer |
EXHIBITINDEX
| Exhibit | ||
| Number | Description of Exhibit | Filing |
| 2.1+ | Share Exchange Agreement by and among the Company, Cranbury Associates, LLC and the member of Cranbury Associates, LLC, dated July 31, 2017 and Effective May 1, 2017 | Filed herewith. |
| 10.1 | Promissory Note dated July 31, 2017, in the amount of $100,000, issued to Ethan Atkin, as Trustee of the Ethan Atkin Revocable Trust dated February 22, 2007 | Filed herewith. |
| 10.2 | Consulting Agreement with Ethan Atkin, dated July 31, 2017 | Filed herewith. |
| 10.3 | Lock-Up Agreement with Ethan Atkin, dated July 31, 2017 | Filed herewith. |
| 99.1 | Press Release Dated August 7, 2017 | Furnished herewith. |
_______________
| + | Schedules and exhibits have been omitted to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that Probility Media Corporation may request confidential treatment Probility Media Corp ExhibitEX-2.1 2 probility_ex0201.htm SHARE EXCHANGE AGREEMENT Exhibit 2.1 SHARE EXCHANGE AGREEMENT BY AND BETWEEN PROBILITY MEDIA CORPORATION,…To view the full exhibit click hereAbout ProBility Media Corporation (OTCMKTS:PBYA) Probility Media Corporation, formerly Panther Biotechnology, Inc., is an e-commerce company building service training and career advancement brand for the skilled trades. The Company is also an online aggregator of e-learning and training content, exam preparation, testing, certification, continuing education, compliance and career advancement tools for engineers, tradesman and offers technical solutions in a range of professions. It offers advisory services to both small businesses and large corporations. It is engaged in preparing the individual from high school graduation to career placement and for life. The Company offers online subscription services for enterprise level companies. The Company, through its divisions, Brown Technical Media Corporation, Brown Technical Publications Inc., Brown Book Shop, Inc., National Electric Wholesale Providers, LLC and One Exam Prep, LLC, is in the process of executing a strategy of defragmenting the skilled trades training market place. ProBility Media Corporation (OTCMKTS:PBYA) Recent Trading Information ProBility Media Corporation (OTCMKTS:PBYA) closed its last trading session 00.000 at 0.546 with 600 shares trading hands. |
