Smart Server, Inc. (NASDAQ:CSCO) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.Entry into a Material Definitive Agreement.
On January 8, 2017, Smart Server, Inc. (the Company) entered into
an Asset Purchase Agreement with NextGen Dealer Solutions, LLC
(NextGen), Halcyon Consulting, LLC (Halcyon), and members of
Halcyon signatory thereto (Halcyon Members and together with
Halcyon, the Halcyon Parties).NextGen and the Halcyon Parties are
collectively referred to as the Seller Parties. NextGen has
developed a proprietary technology platform that will underpin
the operations of the Company. The Agreement provides that, upon
the terms and subject to the conditions set forth in the
Agreement, the Company will acquire all of NextGen’s assets,
properties and rights of whatever kind, tangible and intangible,
other than the excluded assets under the terms of the Agreement.
The Company will assume liability only for certain post-closing
contractual obligations to the terms of the Agreement. The
transaction is expected to close in the first quarter of 2017.
The Agreement provides that the Company will acquire
substantially all of the assets of NextGen in exchange for
approximately $750,000 in cash, plus 1,523,809 unregistered
shares of common stock of the Company (the “Purchaser Shares”),
anda subordinated secured promissory note issued by the Company
in favor of NextGen in the amount of $1,333,333 (the
“Acquisition Note”). The Acquisition Note matures on the third
anniversary of the date the Acquisition Note is entered into (the
“Maturity Date”). Interest will accrue on the Acquisition Note
(i) at a rate of 6.5% annually from the date the Acquisition Note
is entered into through the second anniversary of such date and
(ii) at a rate of 8.5% annually from the second anniversary of
the date the Acquisition Note is entered into through the
Maturity Date. In connection with the closing of the transaction,
the Company has agreed with certain investors to accelerate the
funding of the second tranche of their investment totaling $1.35
million by issuing such investors 1,161,920 shares of the
Company’s common stock and a note in the amount of $667,000, to
be issued on the closing date.
Under the terms of the Agreement, no Indemnifying Party (as
defined in the Agreement) is liable to an Indemnified Party (as
defined in the Agreement) until the aggregate amount of all
losses in respect of indemnification exceeds $50,000 (the “Loss
Threshold”), and in such case such parties shall be liable for
all losses including the Loss Threshold up to a cap of
$1,333,333. Certain fundamental representations and warranties,
the post-closing covenants and certain other specified
obligations of the Company and the Seller Parties are outside of
the Loss Threshold and the cap. No Halcyon Member will be
personally liable for indemnification to the Agreement, however,
if NextGen transfers the Acquisition Note or any of the Purchaser
Sharesor disposes of the proceeds of the transfer at any time
prior to the third anniversary of the closing date, Halcyon
Members will be liable, jointly and severally with the other
Seller Parties, for the indemnification to the Agreement.
Each of the Company, NextGen and Halcyon has provided customary
representations, warranties and covenants in the Agreement. The
completion of the acquisition is subject to various closing
conditions, including (a) the absence of any temporary
restraining order, preliminary or permanent injunction, or other
order or legal proceeding prohibiting or preventing the
transactions contemplated by the Agreement, (b) performance in
all respects by each party of its covenants and agreements, and
(c) the delivery by each party of all required closing documents.
Additionally, to the Agreement, commencing on January 16, 2017
and through the closing date or the date on which the Agreement
terminates, whichever is first to occur, the Company is required
to fund all reasonable ordinary course payroll expenses of
NextGen up to $14,000 per week.
The Agreement contains certain termination rights for both the
Company and NextGen. Both the Company and NextGen have the right
to terminate the Agreement if the closing does not occur on or
before February 15, 2017.
The foregoing description of the Agreement does not purport to be
complete and is qualified in its entirety by the Agreement. The
Agreement and a copy of the press release announcing the
transaction are filed as Exhibits 2.1 and 99.1, respectively, to
this report and are incorporated herein by reference.
On January 9, 2016, the Companys Board of Directors approved the
adoption of the RumbleON, Inc. 2017 Stock Incentive Plan (the
“Plan”), subject to stockholder approval at the Company’s next
Annual Meeting of Stockholders. The purposes of the Plan are to
attract, retain, reward and motivate talented, motivated and
loyal employees and other service providers (“Eligible
Individuals”) by providing them with an opportunity to acquire
or increase a proprietary interest in the Company and to
incentivize them to expend maximum effort for the growth and
success of the Company, so as to strengthen the mutuality of the
interests between such persons and the stockholders of the
Company. The Plan will allow the Company to grant a variety of
stock-based and cash-based awards to Eligible Individuals. Twelve
percent (12%) of the Company’s issued and outstanding shares of
common stock from time to time are reserved for issuance under
the Plan. As of the date of this report, 6.400,000 shares are
issued and outstanding, resulting in 768,000 shares available for
issuance under the Plan. The foregoing description of the Plan
does not purport to be complete and is qualified in its entirety
by the Plan attached as Exhibit 10.1 to this report and
incorporated herein by reference.
Item 2.03.
Creation of a Direct Financial Obligation or an Obligation
under and Off-Balance Sheet Arrangement of a Registrant.
under and Off-Balance Sheet Arrangement of a Registrant.
The disclosure included in Item 1.01 above is incorporated herein
by reference.
Item 2.04.
Triggering Events That Accelerate or Increase a Direct
Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement.
Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement.
The disclosure included in Item 1.01 above is incorporated herein
by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure included in Item 1.01 above and Item 5.03 below is
incorporated herein by reference. The issuances of the shares of
common stock of the Company described in Item 1.01 above and Item
5.03 below will be exempt from the registration requirements of
the Securities Act of 1933, as amended, in accordance with
Section 4(a)(2) thereof, as transactions by an issuer not
involving a public offering.
Item 3.03.
Material Modification to Rights of Security Holders.
The disclosure included in Item 5.03 below is incorporated herein
by reference.
Item 5.02.
Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(d) On January 9, 2017 (the “Effective Time”), the Company
increased its Board of Directors (the “Board”) from two (2) to
six (6) members. As of the Effective Time, Kevin Westfall, Denmar
J. Dixon and Mitch Pierce were elected as directors of the
Company to fill three of the additional Board seats.
Marshall Chesrown continues to serve as Chairman of the Board and
Chief Executive Officer and Steven R. Berrard will now serve as
Chief Financial Officer and continues to serve as a director and
Secretary.
(e)
The disclosure included in Item 1.01 above is incorporated
herein by reference.
herein by reference.
Item 5.03.
Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year.
Fiscal Year.
On January 9, 2017, the Company’s Board and stockholders holding
6,375,000 of the Company’s issued and outstanding shares of
common stock approved an amendment to the Company’s Articles of
Incorporation (the “Certificate of Amendment”), to change the
name of the Company to RumbleON, Inc. and to create an additional
class of common stock of the Company, which is expected to be
effective during the first quarter of 2017, after the notice and
accompanying Information Statement describing the amendment has
been furnished to non-consenting stockholders of the Company for
at least 20 calendar days.
The Company currently has authorized 100,000,000 shares of common
stock, $0.001 par value (the “Authorized Common Stock”),
including 6,400,000 issued and outstanding shares of common stock
(the Outstanding Common Stock, and together with the Authorized
Common Stock, the “Common Stock). to the Certificate of
Amendment, the Company will designate 1,000,000 shares of
Authorized Common Stock as Class A Common Stock (the “Class A
Common Stock”), which Class A Common Stock will rank pari passu
with all of the rights and privileges of the Common Stock, except
that holders of the Class A Common Stock will be entitled to ten
votes per share of Class A Common Stock issued and outstanding,
and (ii) all other shares of Common Stock, including all shares
of Outstanding Common Stock shall be deemed Class B Common Stock
(the “Class B Common Stock”), which Class B Common Stock will
be identical to the Class A Common Stock in all respects, except
that holders of the Class B Common Stock will be entitled to one
vote per share of Class B Common Stock issued and outstanding.
The foregoing description of the Certificate of Amendment does
not purport to be complete and is qualified in its entirety by
the Form of Certificate of Amendment, a copy of which is attached
to this report as Exhibit 3.1 and is incorporated herein by
reference.
Also on January 9, 2017, the Company’s Board and stockholders
holding 6,375,000 of the Company’s issued and outstanding shares
of common stock approved the issuance to (i) Marshall Chesrown of
875,000 shares of Class A Common Stock in exchange for an equal
number of shares of Class B Common Stock held by Mr. Chesrown,
and (ii) Steven R. Berrard of 125,000 shares of Class A Common
Stock in exchange for an equal number of shares of Class B Common
Stock held by Mr. Berrard, to be effective at the time the
Certificate of Amendment is filed with the Secretary of State of
Nevada.
In connection with the name change of the Company to RumbleON,
Inc., the Company will begin trading under the new symbol
“RMBL” at the open of trading on Tuesday, January 10, 2017.
Item 7.01.
Regulation FD Disclosure.
Attached to this report as Exhibit 99.2 is a slide deck
presentation, which the Company may present to investors,
analysts and others. The slide deck presentation attached to this
report as Exhibit 99.2 is furnished to this Item 7.01 and shall
not be deemed filed in this or any other filing of the Company
under the Securities Exchange Act of 1934, as amended, unless
expressly incorporated by specific reference in any such filing.
Item 9.01.
Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
Description
2.1
Asset Purchase Agreement, dated as of January 8, 2017*
3.1
Form of Certificate of Amendment
10.1
2017 RumbleON Stock Incentive Plan
99.1
Press Release dated January 9, 2017
99.2
Slide Deck Presentation dated January 9, 2017
*
Schedules and similar attachments to the Asset Purchase
Agreement, dated as of January 8, 2017 have been omitted to
Item 601(b)(2) of Regulation S-K. The registrant hereby
undertakes to furnish on a supplemental basis a copy of any
omitted schedules and similar attachments to the Securities
and Exchange Commission upon request.
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.
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SMART SERVER, INC.
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Date: January 9, 2017 |
By: |
/s/ Steven R. Berrard |
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Steven R. Berrard |
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Chief Financial Officer and Secretary |
EXHIBIT INDEX
Exhibit No.
Description
2.1
Asset Purchase Agreement, dated as of January 8, 2017*
3.1
Form of Certificate of Amendment
10.1
2017 RumbleON Stock Incentive Plan
99.1
Press Release dated January 9, 2017
99.2
Slide Deck Presentation dated January 9, 2017
*
Schedules and similar attachments to the Asset Purchase
Agreement, dated as of January 8, 2017 have been omitted
About Smart Server, Inc. (NASDAQ:CSCO)
Cisco Systems, Inc. designs and sells a range of products, provides services and delivers integrated solutions to develop and connect networks around the world. The Company operates through three geographic segments: Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific, Japan and China (APJC). The Company groups its products and technologies into various categories, such as Switching; Next-Generation Network (NGN) Routing; Collaboration; Data Center; Wireless; Service Provider Video; Security, and Other Products. In addition to its product offerings, the Company provides a range of service offerings, including technical support services and advanced services. The Company delivers its technology and services to its customers as solutions for their priorities, including cloud, video, mobility, security, collaboration and analytics. The Company serves customers, including businesses of all sizes, public institutions, governments and service providers. Smart Server, Inc. (NASDAQ:CSCO) Recent Trading Information
Smart Server, Inc. (NASDAQ:CSCO) closed its last trading session down -0.06 at 30.17 with 15,923,243 shares trading hands.
