UNITED STATES  

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report: July 14, 2016 

(Date of earliest event reported)

  

INNODATA INC.

(Exact name of registrant as specified in its charter)

 

Delaware 0-22196 13-3475943
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation)   Identification No.)

  

Three University Plaza   07601
Hackensack, NJ 07601   (Zip Code)
(Address of principal executive offices)    

  

(201) 371-8000
(Registrant's telephone number, including area code)
 
N/A
(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

p Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

p Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

p Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

p Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement

 

The information set forth under Item 2.01 of this Current Report on Form 8-K is incorporated into this Item 1.01 by reference.

 

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

Reference is made to the Report on Form 8-K (the “Prior 8-K”) that was filed by Innodata Inc. with the Securities and Exchange Commission on May 12, 2016.

 

On July 14, 2016, Innodata Inc. through its wholly owned subsidiaries Agility PR Solutions LLC (formerly MediaMiser LLC) and Agility PR Solutions Ltd. (formerly MediaMiser Ltd.) completed the acquisition from PR Newswire of the Agility Business pursuant to the Agreement. The terms PR Newswire and Agility Business are as defined in the Prior 8-K. The term Agreement means the Agreement as defined in the Prior 8-K, as amended by the amendment to the Agreement that is filed with this Report as Exhibit 2.1 (“Amendment No. 1”).

 

The consideration given by the acquiring entities for the Agility Business, after working capital adjustments, consisted of $4.3 million in cash, of which $250,000 will be deposited by the acquiring entities in escrow for disposition as provided in Amendment No. 1. The consideration given by the acquiring entities is subject to further post-closing adjustment based on working capital as of the closing date. The acquiring entities also assumed certain liabilities pursuant to the Agreement, including approximately $4.4 million of deferred revenue liabilities. Innodata Inc. has guaranteed the assumption of these liabilities.

 

Neither Innodata Inc. nor any of its affiliates has any material relationship with PR Newswire, other than with respect to the Agreement and certain ancillary documents related to the Agreement.

 

On July 14, 2016, Innodata Inc. issued a press release announcing the acquisition, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

 

Item 9.01. Financial Statements and Exhibits .

 

(a) Financial Statements of Business Acquired.

 

To the extent required, Innodata will provide the financial statements required by Item 9.01(a) on Form 8-K by amendment to this Current Report on Form 8-K no later than the 71 st calendar day after the required filing date for this Current Report on Form 8-K.

 

(b) Pro Forma Financial Information.

 

To the extent required, Innodata will provide the pro forma financial statements required by Item 9.01(b) on Form 8-K by amendment to this Current Report on Form 8-K no later than the 71 st calendar day after the required filing date for this Current Report on Form 8-K.

 

(d) Exhibits

 

2.1 Amendment No. 1 to Asset Purchase Agreement dated as of July 14, 2016 among PWW Acquisition LLC, MediaMiser LLC and MediaMiser Ltd., filed herewith.

 

99.1 Press release of Innodata Inc. dated July 14, 2016.

 

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SIGNATURES

 

Pursuant 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 thereunto duly authorized.

 

 

  INNODATA INC.
   
Date:  July 15, 2016 By:  /s/ O’Neil Nalavadi
    O’Neil Nalavadi
Senior Vice President
and Chief Financial Officer

 

 

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INDEX TO EXHIBITS

 

 

Exhibit No.     Description  
         
2.1   Amendment No. 1 to Asset Purchase Agreement dated as of July 14, 2016 among PWW Acquisition LLC, MediaMiser LLC and MediaMiser Ltd., filed herewith.
     
99.1   Press Release of Innodata Inc. dated July 14, 2016.
               

 

 

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Exhibit 2.1

 

AMENDMENT NO. 1
TO ASSET PURCHASE AGREEMENT

 

This AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT is dated as of July 14, 2016 (this “ Amendment ”) and amends the Asset Purchase Agreement, dated as of May 11, 2016 (the “ Agreement ”), by and among PWW Acquisition LLC, a limited liability company organized under the laws of the State of Delaware (“ Parent ”), MediaMiser LLC, a Delaware limited liability company (“ MMUS ”), and MediaMiser Ltd., a limited company organized under the laws of England and Wales (together with MMUS, the “ Buyer ”). Capitalized terms not defined in this Amendment have the meanings set forth in the Agreement.

 

WHEREAS , Parent and the Buyer have agreed that it is in their best interests to amend the terms of the Agreement; and

 

WHEREAS , pursuant to Section 10.12 of the Agreement, Parent and the Buyer may amend the Agreement by an instrument in writing signed by the Buyer and by Parent.

 

NOW, THEREFORE , in consideration of the foregoing premises and the respective terms and conditions contained herein, the receipt and sufficiency of which is hereby acknowledged, Parent and the Buyer hereby agree as follows:

 

1. Amendment . The Agreement is hereby amended as follows:

 

(a) The following definitions are added (in applicable alphabetical order) to Section 1.1 of the Agreement :

 

Escrow Agent ” has the meaning set forth in Section 2.8(a) .

 

Escrow Agreement ” has the meaning set forth in Section 2.8(a) .

 

Final Holdback Amount ” has the meaning set forth in Section 2.8(c) .

 

Holdback Amount ” means an aggregate amount equal to the result of (A) the result of (x) (1) the monthly average of new Agility and Agility-Plus customer leads generated and transferred to the Agility sales team for the first time by the Agility Business during the Reference Period (such average, the “ Benchmark ”), minus (2) the number of new Agility and Agility-Plus customer leads generated and transferred to the Agility sales team for the first time during the Measurement Period, divided by (y) the Benchmark, multiplied by (B) the Initial Holdback Amount.

 

Holdback Negotiation Period ” has the meaning set forth in Section 2.8(d) .

 

Holdback Notice of Objection ” has the meaning set forth in Section 2.8(c) .

 

Holdback Review Period ” has the meaning set forth in Section 2.8(c) .

 

Holdback Statement ” has the meaning set forth in Section 2.8(b) .

 

 

 

 

Initial Holdback Amount ” has the meaning set forth in Section 2.8(a) .

 

Measurement Period ” means the 30-day period immediately prior to the Closing Date.

 

Pre-Closing Leads Matter ” means the concerns expressed by the Buyer that Parent or its Affiliates diverted prospective customers of the Agility Business away from the Agility Business to competitive businesses run by one or more Affiliates of Parent between the PRN Closing Date and the Closing Date.

 

Reference Period ” means the 90-day period immediately prior to the PRN Closing (which the parties stipulate to have been June 16, 2016).

 

Remaining Holdback Amount ” means (A) the Initial Holdback Amount, minus (B) the Final Holdback Amount.

 

(b) The following sentence is added to the end of Section 2.2 of the Agreement:

 

If Parent has not received the entire Closing Payment less the Initial Holdback Amount by 4.00 p.m. prevailing United Kingdom time on the day immediately following the Closing Date, then Parent shall have the right to rescind, revoke and unwind the Closing, in which case the Parties will take all actions necessary to put the Parties in the same respective places as if the Closing had not occurred.

 

(c) The following is added to the Agreement as a new Section 2.8 :

 

Section 2.8 Holdback and Escrow .

 

(a) Notwithstanding anything to the contrary in this Agreement, including Section 2.3(a) , an amount of the Closing Payment equal to $250,000 (the “ Initial Holdback Amount ”) shall not be paid to Parent by the Buyer at the Closing and will instead be initially retained by the Buyer and then paid as provided in this Section 2.8 . Within three Business Days following the Closing Date, the Buyer will deposit the Initial Holdback Amount into a third-party escrow account established with a mutually agreed, nationally recognized U.S. bank as escrow agent (the “ Escrow Agent ”) pursuant to a customary escrow agreement entered into by and among Parent, the Buyer and the Escrow Agent, the terms of which shall be negotiated in good faith by the parties hereto (the “ Escrow Agreement ”).

 

(b) On or prior to the 30th day following the Closing Date, Parent will prepare, or cause to be prepared, and deliver to the Buyer a statement (the “ Holdback Statement ”), which shall set forth Parent’s good faith calculation of the Holdback Amount, along with a reasonable level of detail supporting such calculation.

 

(c) Upon receipt from Parent of the Holdback Statement, the Buyer shall have 30 days to review the Holdback Statement (the “ Holdback Review Period ”). At the Buyer’s request, until the final determination of the Holdback Amount pursuant to this Section 2.8 (the “ Final Holdback Amount ”), Parent (i) shall reasonably cooperate and assist, and shall cause its Representatives to reasonably cooperate and assist, the Buyer and its Representatives in the review of the Holdback Statement, and (ii) shall provide the Buyer and its Representatives with any information reasonably requested by the Buyer in connection with its review of the Holdback Statement. If the Buyer disagrees with Parent’s computation of any portion of the Holdback Amount set forth in the Holdback Statement, the Buyer shall, on or prior to the last day of the Holdback Review Period, deliver a written notice to Parent (the “ Holdback Notice of Objection ”), setting forth the Buyer’s objections to Parent’s calculation of the Holdback Amount. Any Holdback Notice of Objection shall specify those items or amounts with which the Buyer disagrees and shall set forth the Buyer’s calculation of the Holdback Amount based upon such objections.

 

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(d) If the Buyer does not deliver a Holdback Notice of Objection to Parent within the Holdback Review Period, the Buyer shall be deemed to have accepted Parent’s calculation of the Holdback Amount set forth in the Holdback Statement, and such calculation shall be deemed the Final Holdback Amount, conclusive and binding on the parties hereto. If the Buyer delivers a Holdback Notice of Objection to Parent within the Holdback Review Period, the Buyer and Parent shall, during the 30 days following such delivery or any mutually agreed upon extension thereof (the “ Holdback Negotiation Period ”), use their good faith efforts to reach agreement on the disputed items and amounts in order to determine the amount of the Final Holdback Amount. If the Buyer and Parent are not able to reach agreement on the disputed items and amounts in order to determine the amount of the Final Holdback Amount during the Holdback Negotiation Period, then the Final Holdback Amount will be finally determined by the Independent Expert pursuant to procedures consistent with Section 2.4(d) .

 

(e) If the Final Holdback Amount is equal to or less than zero, then the Buyer and Parent will deliver to the Escrow Agent a joint written instruction directing the Escrow Agent to release to Parent the full Initial Holdback Amount. If the Final Holdback Amount is greater than zero, then the Buyer and Parent will deliver to the Escrow Agent a joint written instruction directing the Escrow Agent to release (i) to the Buyer the Final Holdback Amount, and (ii) to Parent, the Remaining Holdback Amount.

 

(f) Any amounts released to the Buyer pursuant to this Section 2.8 shall be treated as an adjustment to the Purchase Price by the parties hereto for Tax purposes, unless otherwise required by applicable Law.

 

(g) Notwithstanding anything in this Agreement, including Article IX , to the contrary, the Buyer’s sole and exclusive remedy with respect to any claims based on the Pre-Closing Leads Matter, including any Losses resulting from breaches of any representations, warranties or covenants contained in this Agreement based on to the Pre-Closing Leads Matter, shall be limited to the Buyer’s receipt of any Final Holdback Amount pursuant to this Section 2.8 .

 

2. No Other Amendment . All other terms and conditions of the Agreement that are not expressly amended by this Amendment, including without limitation the representations, warranties, covenants and agreements of the respective parties, shall remain in full force and effect without other or further amendment or modification.

 

3. Counterparts . This Amendment may be executed in multiple counterparts, and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Amendment shall become effective when each party hereto shall have received a counterpart hereof or thereof signed by the other party hereto. The parties agree that the delivery of this Amendment, and any other agreements and documents contemplated hereby, may be affected by means of an exchange of facsimile or electronically transmitted signatures (including in portable document format (pdf)).

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 1 to be executed by their respective duly authorized officers to be effective as of the date first above written.

 

  THE BUYER:
     
  AGILITY PR SOLUTIONS LLC F/K/A
  MEDIAMISER LLC
     
  By:    /s/ O’Neil Nalavadi
  Name: O’Neil Nalavadi
  Title: SVP and CFO, Innodata Inc., Sole Member
     
     
  AGILITY PR SOLUTIONS LTD. F/K/A
  MEDIAMISER LTD.
     
  By: /s/ O’Neil Nalavadi
  Name: O’Neil Nalavadi
  Title: Director
     
     
  PARENT:
     
  PWW ACQUISITION LLC
     
  By: /s/ Jack Pearlstein
  Name: Jack Pearlstein
  Title: Chief Financial Officer

 

Signature Page to Amendment No. 1 to Asset Purchase Agreement

Exhibit 99.1

 

 

MediaMiser, an Innodata Company, Acquires Agility to Deliver Enhanced Media Intelligence Solutions for the Global PR Industry

 

Acquisition of Agility from PR Newswire gives MediaMiser a stronger footprint in the US and UK markets

 

NEW YORK – July 14, 2016 – INNODATA INC. (NASDAQ: INOD) today announced that its MediaMiser subsidiary (https://www.mediamiser.com) has purchased Agility from PR Newswire. MediaMiser is a leading provider of media monitoring and analysis software and services. Agility is a leading global media contact database and media monitoring platform that helps customers target key influencers, amplify content and measure impact.

 

MediaMiser acquired Agility to foster growth in North America and Europe by bolstering MediaMiser’s media intelligence solutions and media databases, improving its media outreach capabilities, and delivering stronger, more data-powered media intelligence to clients. With the acquisition of Agility, MediaMiser is now one of only a handful of companies able to offer a global media contact dataset with integrated workflows for distribution, monitoring and measurement.

 

Jack Abuhoff, Innodata’s Chairman and CEO, said, “We will be offering the best of MediaMiser and Agility services to our combined customer base. Our existing MediaMiser customers will soon have access to Agility’s truly global database of social media bloggers, influencers and journalists, important for amplifying messaging in a world that increasingly knows no boundaries. Current Agility customers, meanwhile, will gain access to MediaMiser’s enterprise-level data insight tools and analysis services, which have contributed to MediaMiser enjoying one of the highest client renewal and retention rates in the media intelligence industry.

 

“In addition, we will be expanding and deepening the Agility database using Innodata’s database augmentation technology and research teams – the same technology and teams utilized by many of the world’s leading information companies to build the world’s best databases.”

 

“The media monitoring industry is experiencing rapid change amid ongoing digital media expansion. MediaMiser has been keen to capitalize on industry developments with smart additions and expansions to our portfolio,” said Chris Morrison, President of MediaMiser. “Agility is an excellent product with an extensive global media contact database and a strong reputation in the marketplace. We’re pleased to bring Agility into MediaMiser’s integrated offering.”

 

The acquisition brings to MediaMiser more than 1,500 Agility customers and approximately 50 employees in the US and the UK. Agility had approximately $5 million in revenues in 2015.

 

For additional information see the Report on Form 8-K to be filed by Innodata Inc. with the Securities and Exchange Commission with respect to the acquisition.

 

To schedule an interview with Jack Abuhoff, CEO of Innodata or Chris Morrison, President of MediaMiser, please contact Vanessa Horwell at vhorwell@thinkinkpr.com in the UK or Nikkia Griffin at ngriffin@thinkinkpr.com in the US. For more information, please visit www.mediamiser.com or www.agilitypr.com.

 

 

 

About Innodata

 

Innodata (NASDAQ: INOD) is a global digital services and solutions company. Innodata’s technology and services power leading information products and online retail destinations around the world. Innodata’s solutions help prestigious enterprises harness the power of digital data to re-imagine how they operate and drive performance. Innodata serves publishers, media and information companies, digital retailers, banks, insurance companies, government agencies and many other industries.

 

Founded in 1988, Innodata comprises a team of 5,000 diverse people in 8 countries who are dedicated to delivering services and solutions that help the world’s businesses make better decisions.

 

Recent Innodata honors include EContent Magazine’s EContent 100, KMWorld Magazine’s 100 Companies That Matter in Knowledge Management, the International Association of Outsourcing Professionals’ (IAOP) Global Outsourcing Top 100, D&B India’s Leading ITeS and BPO Companies and the Black Book of Outsourcing’s Top List of Leading Outsourcing Providers to the Printing and Publishing Business.

 

About MediaMiser

 

MediaMiser ( https://www.mediamiser.com ) is a leading provider of media monitoring and analysis software and managed services. Through innovative web-based and mobile solutions, MediaMiser reduces the time and effort it takes to gather, analyze and distribute valuable business intelligence extracted from traditional and social media sources. For organizations that prefer to outsource, MediaMiser provides detailed analysis reports and daily media briefings through an expert professional services team.

 

Forward Looking Statement

 

This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “project,” “head start,” "believe," "expect," “should,” "anticipate," "indicate," "point to," “forecast,” “likely,” “goals,” “optimistic,” “foster” and other similar expressions generally identify forward-looking statements, which speak only as of their dates.

 

These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties, including without limitation, that contracts may be terminated by clients; projected or committed volumes of work may not materialize; our Innodata Advanced Data Solutions (“IADS”) segment is a venture formed in 2011 with minimal revenue to date, that has incurred losses since inception and has recorded impairment charges for all of its fixed assets; we currently intend to continue to invest in IADS; the primarily at-will nature of contracts with our Content Services clients and the ability of these clients to reduce, delay or cancel projects; continuing Content Services segment revenue concentration in a limited number of clients; continuing Content Services segment reliance on project-based work; inability to replace projects that are completed, canceled or reduced; difficulty in integrating and deriving synergies from acquisitions, joint venture and strategic investments; potential undiscovered liabilities of companies that we may acquire; depressed market conditions; changes in external market factors; the ability and willingness of our clients and prospective clients to execute business plans which give rise to requirements for our services; changes in our business or growth strategy; the emergence of new or growing competitors; various other competitive and technological factors; and other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

 

Our actual results could differ materially from the results referred to in the forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the results referred to in the forward-looking statements will occur.

 

We undertake no obligation to update or review any guidance or other forward-looking information, whether as a result of new information, future developments or otherwise.

 

 

 

Media Contacts:

Vanessa Horwell, ThinkInk

vhorwell@thinkinkpr.com

+44.203.372.4809

 

Nikkia Griffin, ThinkInk

ngriffin@thinkinkpr.com

+1.305.749.5342 x239

 

Company Contacts:

Jim Donnelly

jim.donnelly@mediamiser.com

(613) 232-7797 x117

 

Raj Jain

rjain@innodata.com

(201) 371-8024