STG GROUP, INC. (OTCMKTS:STGG) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
| Entry into a Material Definitive Agreement. |
On May 8, 2017, STG Group, Inc. (the Company) entered into an
Amendment and Waiver (the Amendment) to the Agreement and Plan of
Merger (the Original Agreement), dated as of February 18, 2017,
by and among the Company, Ripcord Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of the Company, PSS
Holdings, Inc., a Delaware corporation (PSS), PSS PE I, L.P., a
Delaware limited partnership (PSS PE), PSS Co-Investors, L.P., a
Delaware limited partnership (PSS Co-Investors), WWC Capital Fund
II, L.P., a Delaware limited partnership (WWC), Spring Capital
Partners II, L.P., a Maryland limited partnership (Spring
Capital), and Scott Goss (together with PSS PE, PSS Co-Investors,
WWC and Spring Capital, the Seller Parties), and Peter M.
Schulte, a resident of the State of New York, but solely in his
capacity as the Stockholders Representative. Prior to the entry
into the Amendment, PSS rescinded a notice of termination of the
Original Agreement that had been received by the Company on May
3, 2017. The Amendment includes the following changes to the
Original Agreement:
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The outside date for closing the acquisition was extended to June 30, 2017 (the Outside Date); |
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The purchase price under the merger agreement was increased to $119.8 million, subject to certain adjustments based upon closing working capital; |
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The Companys obligations to close were made subject to the Company obtaining debt and equity financing for closing the acquisition; and |
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The Company agreed to make an advance payment of $925,000 of the merger consideration on the date of the Amendment, which will be credited against the purchase price at closing (the Advance Payment). |
PSS is entitled to keep the Advance Payment if the merger
agreement is terminated under certain circumstances, including:
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by mutual written consent of the Company and the Stockholders Representative; |
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by the Stockholders Representative in connection with breaches by the Company of its representations and warranties; |
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by the Stockholders Representative for a failure of the closing to occur prior to the Outside Date if the Company has not, prior to such termination, delivered notice that it is ready, willing and able to effect the closing and three business days have elapsed since the satisfaction or waiver of all conditions to closing (other than those that by their nature are satisfied at closing); |
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by either the Company or the Stockholders Representative if there is a court order preventing the consummation of the acquisition or such consummation would otherwise be illegal; or |
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by the Company due to a material adverse effect on the Company or PSS. |
The Company is entitled to a refund of the Advance Payment if the
merger agreement is terminated under certain circumstances,
including:
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by the Company in connection with breaches by PSS or the Seller Parties of any of their respective representations and warranties or if any PSS stockholder has indicated to PSS or the Company its intent to exercise dissenters rights; or |
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by either the Company or the Stockholders Representative for a failure of the closing to occur prior to the Outside Date if the Company has, prior to such termination, delivered notice that it is ready, willing and able to effect the closing but the closing has not occurred within three business days as a result of any act or failure to act by a Seller Party. |
In the event the agreement is terminated by the Stockholders
Representative and an event has occurred during the interim
period between signing and closing, based solely on the
operations of PSS, that caused a breach of PSS representations
and warranties, and the Company fails to waive its
indemnification rights with respect to such breach within 15 days
following PSS request for such waiver, the Company shall be
entitled to $625,000 of the Advance Payment as a termination fee,
and the difference between the Advance Payment and the
termination fee shall be retained by PSS.
| Item 8.01 | Other Events. |
On May 8, 2017, the Company issued a press release announcing the
entry into the Amendment. A copy of the press release is attached
as Exhibit 99.1 and incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 99.1 | Press release issued by the Company on May 8, 2017. |
About STG GROUP, INC. (OTCMKTS:STGG)
STG Group, Inc., formerly Global Defense & National Security Systems, Inc., provides specialist cyber, software and intelligence solutions. The Company’s solutions are integral to national security-related programs run by approximately 50 the United States Government agencies, including the Department of Defense, the Intelligence Community, the Department of Homeland Security, the Department of State and other government departments with national security responsibilities. Its area of operation include security information and event management; network intrusion detection and prevention; application vulnerability assessment; agile software development; command and control system development; complex application development; advanced collection and analysis; multi-intelligence exploitation and dissemination, and multi-lingual intelligence analysis. It specializes in cyber security and secure information systems; software development, systems and services, and intelligence and analytics. STG GROUP, INC. (OTCMKTS:STGG) Recent Trading Information
STG GROUP, INC. (OTCMKTS:STGG) closed its last trading session 00.00 at 1.28 with shares trading hands.
