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 (Date of earliest event reported): September 13, 2018 (September 13, 2018)

 

PARETEUM CORPORATION

(Exact name of registrant as specified in Charter)

 

Delaware 001-35360 95-4557538
(State or other jurisdiction of
incorporation)
(Commission File Number) (IRS Employer
Identification No.)

 

1185 Avenue of the Americas

37th Floor

New York, NY 10036

(Address of Principal Executive Offices) (Zip Code)

 

Registrant's telephone number, including area code: (212) 984-1096

 

 

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 (see General Instruction A.2. below:

 

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

 

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

 

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

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b2 of the Securities Exchange Act of 1934 (§240.12b2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 5.07 Submission of Matters to a Vote of Security Holders.

  

The 2018 Annual Meeting of Stockholders (the “Annual Meeting”) of Pareteum Corporation (the “Company”) was held on September 13, 2018 at 10:00 a.m. EDT. At the Annual Meeting, a total of 47,047,910 shares, or 79.71%, of the Company’s capital stock issued and outstanding as of the record date for the Annual Meeting were represented in person or by proxy. Set forth below is a brief description of each matter voted upon at the Annual Meeting and the voting results with respect to each matter.

 

 1) To approve the issuance of the Company’s common stock to shareholders of Artilium plc, a public limited company registered in England and Wales, in connection with the Company’s proposed acquisition of the entire issued and to be issued ordinary shares of Artilium plc, resulting in the issuance of approximately 37,852,076 new shares of the Company’s common stock (the “Share Issuance Proposal”)

 

Votes For   Votes Against   Abstain
23,779,436   280,249   267,201

 

The Share Issuance Proposal was approved.

 

 

2) To elect four directors to serve until the next annual meeting of stockholders and until their successors are duly elected and qualified.

 

Nominee   Votes For   Against   Abstain
Robert H. Turner   23,496,170   615,196   215,520
Yves van Sante   23,246,841   888,510   191,535
Luis Jimenez-Tuñon   23,211,496   847,991   267,399
Laura Thomas   23,498,822   661,366   166,698

 

The four nominees for director were elected.

 

3) To ratify the 2018 Pareteum Corporation Long-Term Incentive Compensation Plan, including the reservation of 8,000,000 shares with a 15% annual increase to the shares thereunder.

 

Votes For   Votes Against   Abstain
18,583,458   4,961,271   782,157

 

The 2018 Pareteum Corporation Long-Term Incentive Compensation Plan was ratified.

 

 

 

 

4) To ratify the appointment of SquarMilner LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018.

 

Votes For   Votes Against   Abstain
44,494,732   1,218,801   1,334,077
         

 

The appointment of SquarMilner LLP was approved.

 

5) To approve, on a non-binding advisory basis, the compensation of our named executive officers (the “Say-on-Pay Proposal”).

 

Votes For   Votes Against   Abstain
21,463,133   2,091,005   772,748
         

 

The Say-on-Pay Proposal was approved.

  

6) To recommend, on a non-binding advisory basis, the frequency of future advisory votes on the compensation of our named executive officers (the “Say-on-Frequency Proposal”).

 

One Year   Two Years   Three Years   Abstain
7,231,659   731,785   15,044,044   1,319,398
             

 

The recommended frequency of future votes on executive compensation pursuant to the Say-on-Frequency Proposal was three years.

 

7) The proposal to adjourn the Annual Meeting was not necessary or appropriate because there were sufficient votes to approve the Share Issuance Proposal and other proposals.

  

 

 

 

 Item 8.01 Other Events

 

On September 13, 2018, the Company issued a letter from Robert H. Turner, Executive Chairman and Principal Executive Officer of the Company (the “Chairman’s Letter”) announcing the results of the Annual Meeting. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference.

 

On September 13, 2018, the Company issued an announcement in the United Kingdom regarding the planned acquisition by the Company of Artilium plc (the “Acquisition”) and the two meetings of Artilium plc shareholders to take place September 14, 2018 in connection with the Acquisition as prescribed by the Court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006. A copy of the Company’s announcement is attached hereto as Exhibit 99.2 and is incorporated by reference.

  

Item 9.01 Financial Statements and Exhibits

  

Exhibit    
No.   Description
99.1   Chairman’s Letter: Pareteum Announces Favorable Shareholders’ Vote Chairman’s Update Letter Details Company Progress, September 13, 2018
99.2   Announcement: Recommend Share and Cash Offer for Artilium plc by Pareteum Corporation, Pareteum Stockholder Meeting, September 13, 2018

 

 

 

 

Forward looking statements

 

This Report includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are based on current expectations and projections about future events. Pareteum’s actual results may differ materially from those discussed herein, or implied by, these forward-looking statements. Forward-looking statements are generally identified by words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “project,” “should,” “will,” “would,” “could,” “continue,” “likely” or the negative or plural of such words and other similar expressions. In addition, any statements that refer to expectations or other characterizations of future events or circumstances are forward-looking statements. The statements that contain these or similar words should be read carefully because these statements discuss Pareteum’s future expectations, contain projections of Pareteum’s future results of operations or of Pareteum’s financial position, business strategy, short-term and long-term business operations and objectives, financial needs and other “forward-looking” information. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation: the risk that the acquisition is not completed on a timely basis or at all; the ability to integrate Artilium into Pareteum’s business successfully and the amount of time and expense spent and incurred in connection with the integration; the possibility that competing offers will be made; the risk that the economic benefits and other synergies that Pareteum’s management anticipates as a result of the acquisition are not fully realized or take longer to realize than expected; the risk that certain risks and liabilities associated with the acquisition have not been discovered; the risk that the approval of Artilium shareholders of the acquisition may not be obtained or that other conditions of the acquisition will not be satisfied; changes in global or local political, economic, business, competitive, market and regulatory forces; changes in exchange and interest rates; changes in tax and other laws or regulations; future business combinations or disposals; operating costs, customer loss and business disruption (including difficulties in maintaining relationships with employees, customers or suppliers) occurring prior to completion of the acquisition or if the acquisition is not completed at all; changes in the market price of shares of Pareteum or Artilium; and changes in the economic and financial conditions of the businesses of Pareteum or Artilium.

 

The foregoing does not represent an exhaustive list of risks. Additional factors are described in Pareteum’s public filings with the SEC, and other factors are described in Pareteum’s proxy statement for its 2018 annual meeting of stockholders, which was filed with the U.S. Securities and Exchange commission on August 3, 2018. Moreover, Pareteum operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for Pareteum’s management to predict all risks, nor can Pareteum assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements Pareteum may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the information in this Report.

 

Any forward-looking statements in this Report are not guarantees of future performance, and actual results, developments and business decisions may differ from those contemplated by those forward-looking statements, possibly materially. Accordingly, you should not place undue reliance on any such forward-looking statements. All forward-looking statements included in this Report are based on information available to Pareteum management on the date of such information. Except to the extent required by applicable laws or rules, Pareteum undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to Pareteum or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained throughout this Report.

 

 

 

  

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 hereunto duly authorized.

 

Dated: September 13, 2018 PARETEUM CORPORATION
       
       
  By:   /s/ Edward O’Donnell  
  Name: Edward O’Donnell
  Title: Chief Financial Officer

 

 

 

 

 

Exhibit 99.1

 

Pareteum Announces Favorable Shareholders’ Vote

Chairman’s Update Letter Details Company Progress

 

NEW YORK, NEW YORK – PRNewswire – September 13, 2018 - Pareteum Corporation (NYSE American: TEUM), (“Pareteum” or the “Company”) , the rapidly growing Global Software Defined Cloud company, delivering award winning mobile enablement solutions, announced today the issuance of a shareholder update letter from its Executive Chairman and Principal Executive Officer, Hal Turner.

 

Dear Fellow Shareholders,

 

Today, your voice has been heard in resounding fashion. Your votes have been counted and reported through our Annual General Meeting (AGM). Your collective vote enabled us as follows:

 

· To comfortably meet quorum, with ~ 80% of shares voted
· To attain “FOR” on all seven propositions; with a range of ~80% - 98% in favor for all binary votes
· Your voice was strongest in casting a 98% “FOR” vote to issue the shares to acquire Artilium!
· We now expect to close the Artilium transaction by October 1, 2018.

 

We offer our sincere THANK YOU for your demonstrable support of the company, affirming our clear mandate to hyper-accelerate our growth through targeted consolidation and to continue to disrupt markets with our software and our ambitious strategies and business plans.

 

Your overwhelming approval of the Artilium acquisition means expanding the successful strategic alliance we have enjoyed with Artilium since October 2017, through the full integration of our two companies. The resulting fully-integrated business, will be accretive from a financial perspective, will strengthen our establishment of expanded-scale service delivery, and will enhance our ability to sell to larger accounts globally and continue to convert our substantial growing 36 Month Contractual Revenue Backlog (36MCRB). The following snapshot shows key measures of the new business, on a pro forma basis, post-closing (assuming the businesses had been fully combined for the whole financial year ending 31 December 2018):

 

· Employees: ~150, globally deployed
· Connections: ~4.2 million
· Revenue: ~$49 million
· Adjusted EBITDA: ~$11.9 million

 

 

Page 2 of 4

 

We expect this dramatic increase in scale to be recognized by the market in our overall value in due course, especially as we continue to attract long-term and increasingly institutional investors, who share our confidence in our ability to execute on our plans, as we have consistently shown we can.

 

In looking at the balance of the year ahead, we can take a moment to recap the strong results achieved so far this year, and as reported through Q2:

 

Revenues of $6 million, up 85% Year-Over-Year
Net Income of $1,656,338 or EPS of $0.03 per Share (versus net loss of ($1.3 million) in the second quarter of 2017)
Adjusted EBITDA improved by over $834K, or 180%, to $1.3 million
EBITDA of $597,263 (improved by over $898K, or 298%, to $597,263)
Connections, a Lead Indicator of Revenue, Increased 225% over the Second Quarter of 2017 and 23% Increase Over the First Quarter of 2018
Raised 2018 Outlook to > 80% Revenue Growth
Operating Cash Flow Net of Restructuring and Acquisition Related Expenditures of $565K for the six months ended June 30, 2018
Dollar based net expansion rate of 161% for contracts added since 2017

 

Based upon our stellar Q2 results and our visibility into Q3 and Q4 operating performance, we remain very bullish in our outlook. For the financial year ending 31 December 2018:

 

· We stand firmly by our formal guidance of over 80% revenue growth for 2018, and we plan to issue an updated outlook statement following completion of the Artilium acquisition on October 1, 2018;
· We will be reporting results on a standalone (Pareteum and Artilium) and combined view (Pareteum plus Artilium) for Q4, and full year 2018;
· We reiterate our guidance that, with our current cost structures, Pareteum expects positive EBITDA and cash from continuing operations for the full year 2018, adjusted for restructuring and acquisition related costs;
· Our 36MCRB of revenue and connections (our proxy for connected devices and their usage) will soon also be updated and we note that to date we exceeded 100% of our plan for converting revenue and connections from backlog.

 

Pareteum’s Sales Teum, led by Chief Revenue Officer, Rob Mumby, and Chief Executive Officer, Vic Bozzo, continue to produce similar or better results than those that led to our over-80% year-over-year revenue increase, and to our Net Dollar expansion rate of 161%. Our Sales Teum’s initiatives succeed, because, simply stated, customers find great value in our Global Software Defined Cloud and the SuperAPI capabilities to enable more rapid revenue generation from almost anything from movies, music, games, messaging and mobility services while substantially saving costs compared to our competitors’ solutions. It is deeply gratifying to see that we have built a software platform and business model that enables TEUM to succeed, as our customers succeed.

 

We believe this already excellent performance will further improve with the acquisition of Artilium, and with the benefit of Bart Weijermars’ leadership as we expand in Europe. Similarly, our enhanced presence in Asia, under Manjot Mann’s leadership, is also showing signs of great promise in some of the world’s most rapidly growing markets, where we expect significant demand.

 

 

Page 3 of 4

 

To illustrate Pareteum’s role in the growth and success of our customers, here follows a quote from a large Brazilian customer contract we previously announced. The customer, not previously identified, is Telecall, a Brazilian National Carrier with their own Fiber Ring servicing Enterprise, IoT, B2B, Personal Mobile and IP PBX. Telecall selected us to add enterprise Mobility Services.

 

Allan Ajuz, Chief Executive Officer of Telecall, commented, “I have chosen to work with Pareteum because of their customer centric approach in simplifying complex software, communications, and IT problems. Pareteum’s software solutions accelerated our new service offerings and market entry with their simple cloud-based APIs. We can now offer a personalized experience to each individual enterprise, consumer and device we manage.  We looked at all of the options in this space, including the large integrators and software vendors, the MNOs legacy systems and Niche Software systems. We found the only truly integrated software and communications API-based solution to be Pareteum. Now we can add products and services, or dynamically change products and services, at will, using the Pareteum SuperAPI … it’s absolutely a great solution!”

 

Telecall, like all large and successful businesses, clearly shares our vision that software is strategic to their business, and we’re increasingly seeing new and innovative use cases for our Software Defined Cloud platform and we expect this trend to increase, particularly as we emphasize developer engagement through our sales initiatives.

 

You may also expect our aggressive go-to-market plans to establish more attractive strategic alliances and market consolidation throughout the globe. In working with our advisors, Denis McCarthy (who leads our corporate development strategy) and I are very pleased at the interest that has been expressed with new strategic alliances and synergistic opportunities.

 

I will leave you with this: our strategies are expected to enable and accelerate the world’s shift to an open mobility and application network. As we enjoy even greater successes, it will accelerate the pace of innovation in the world, create more economic freedom, and provide better mobility services to billions of underserved people.

 

We look forward to continued success for the remainder of 2018 and into 2019 with the driving force of our company: We are all in sales!

 

All good wishes to you our shareholders … we will update you again following completion of the Artilium acquisition and during our Q3 earnings call in November, and of course, you will see the ongoing evidence of the Teum’s sales and 36MCRB conversion from our future announcements.

 

Robert H. Turner

Executive Chairman & Principal Executive Officer

Pareteum Corporation (NYSE American: TEUM)

 

 

Page 4 of 4

 

About Pareteum Corporation:

Pareteum Corporation (NYSE American: TEUM) is a rapidly growing Global Software Defined Cloud company with a mission to connect “every person and everything.” Organizations use Pareteum to energize their growth and profitability through our Global Software Defined Cloud and complete turnkey solutions featuring relevant content, applications, and connectivity worldwide. Our Cloud platform services partners (technologies integrated into our cloud) include: HPE, IBM, Ribbon Communications (Sonus+GenBand), NetNumber, Oracle, Microsoft, and other world class technology providers. All of the relevant customer acquired value is derived from Pareteum’s leading Global Software Defined Cloud, delivering award-winning mobile enablement, regardless of the user’s location or network. By harnessing the value of communications, Pareteum serves retail, enterprise and IoT customers. Pareteum currently has offices in New York, Sao Paulo, Madrid, Barcelona, Bahrain and the Netherlands. For more information please visit: www.pareteum.com .

  

Forward Looking Statements:

Certain statements contained herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements with respect to Pareteum’s plans and objectives, projections, expectations and intentions. These forward-looking statements are based on current expectations, estimates and projections about Pareteum’s industry, management’s beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of Pareteum may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, Pareteum also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from those projected or suggested in Pareteum’s filings with the Securities and Exchange Commission, copies of which are available from the SEC or may be obtained upon request from Pareteum Corporation.  

 

Contractual Revenue Backlog Definition: 

Contractual Revenue Backlog, 36MCRB, or just Backlog, a Non-GAAP measure is measured on a forward looking 36 month snapshot view monthly, and, is generated by each of the Company’s Managed Services, Global Software Defined Cloud, and Application Exchange & Developer’s Platform customers. The Pareteum multi-year Software-as-a-Service agreements include service establishment and implementation fees, guaranteed minimum monthly recurring fees, as well as contractually scheduled subscribers, in some cases including subscriber usage, during the term of the agreement, and, their resulting monthly contractual revenue. There can be no assurances that we reach the total contract revenue backlog. Timing of revenue recognition may vary from actual results.

 

EBITDA and Adjusted EBITDA Definition:

“EBITDA” is a non-GAAP measure defined as earnings before interest, taxes, depreciation and amortization. “Adjusted EBITDA” is a non-GAAP measure defined by Pareteum as “EBITDA” excluding stock based compensation, restructuring charges, nonrecurring expenditures and certain software and non-cash adjustments made during the 2016 restructuring that are not applicable in 2017 and 2018.

 

 

Pareteum Investor Relations Contacts:

Ted O’Donnell

Chief Financial Officer

(212) 984-1096

InvestorRelations@pareteum.com

 

Stephen Hart

Hayden IR

(917) 658-7878

 

Carrie Howes

Rayleigh Capital

Dubai- London

T UAE: +971 (0) 55 997 0427 | T UK: +44 (0) 870 490 5443 | T CAN: +1 416 900 3634

 

 

FACEBOOK   TWITTER   LINKEDIN

 

 

 

 

 

 

 

 

 

Exhibit 99.2

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

 

FOR IMMEDIATE RELEASE

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

13 September 2018

 

RECOMMENDED SHARE AND CASH OFFER

 

for

 

ARTILIUM PLC

 

by

 

PARETEUM CORPORATION

 

Pareteum Stockholder Meeting

 

On 7 June 2018, the boards of Artilium Plc (“Artilium”) and Pareteum Corporation (“Pareteum”) announced that they had reached agreement on the terms of a recommended share and cash offer pursuant to which Pareteum will acquire the entire issued and to be issued ordinary share capital of Artilium not already owned by Pareteum (the "Acquisition"), which will be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 ("Scheme").

 

The board of Pareteum is pleased to announce that at the Pareteum stockholders meeting held today, Pareteum stockholders approved the resolution to issue shares of Pareteum common stock to holders of Artilium shares in the Acquisition, which approval was necessary to implement the Acquisition.

 

The Scheme is subject to two special meetings of Artilium shareholders: a court-ordered meeting and a general meeting, both of which are to be held at the offices of Addleshaw Goddard LLP, Milton Gate, 60 Chiswell Street, London EC1Y 4AG on 14 September 2018, as set out in the Scheme Document. The Court Meeting will start at 11.00 a.m. and the General Meeting will start at 11.15 a.m. (or as soon thereafter as the Court Meeting has been concluded or adjourned).

 

Capitalised terms in this announcement, unless otherwise defined, have the same meanings as set out in the Scheme Document.

 

Enquiries:

 

Pareteum  

Denis McCarthy, SVP Corporate Development     

Alex Korff, Company Secretary

Ted O’Donnell, Chief Financial Officer

Tel: +1 (212) 984-1096

 

 

 

 

Jefferies International Limited (Financial adviser to Pareteum)

(UK) Simon Brown

(US) Timothy Roepke

Jeffrey Snyder

Tel: +44 (0)20 7029 8000

Tel: +1 (212) 284 2300

 

 

Artilium

Jan-Paul Menke, Non-Executive Chairman

Bart Weijermars, Chief Executive Officer

Rupert Hutton, Chief Finance Officer

Tel: +32 (0) 5023 0300

 

finnCap Ltd (Financial adviser under Rule 3 of the Code, Nominated Adviser and broker to Artilium)

Jonny Franklin-Adams

Henrik Persson

Anthony Adams

Tel: +44 (0)20 7220 0500

 

 

Important notices

 

Jefferies International Limited ("Jefferies"), which is authorised and regulated by the Financial Conduct Authority (the  " FCA " ) in the United Kingdom, is acting exclusively for Pareteum as financial adviser and no one else in connection with the Acquisition and other matters set out in this Announcement and will not be responsible to anyone other than Pareteum for providing the protections afforded to clients of Jefferies, or for providing advice in connection with the Acquisition, the content of this Announcement or any matter referred to herein.  Neither Jefferies nor any of its subsidiaries, affiliates or branches owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Jefferies in connection with this Announcement, any statement contained herein or otherwise.

 

finnCap, which is authorised by and regulated by the FCA in the United Kingdom, is acting exclusively as financial adviser under Rule 3 of the Code, nominated adviser and broker to Artilium and no one else in connection with the Acquisition and other matters referred to in this Announcement and will not be responsible to anyone other than Artilium for providing the protections afforded to clients of finnCap, or for providing advice in connection with the Acquisition, the content of this Announcement or any matter referred to herein. Neither finnCap nor any of its subsidiaries or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of finnCap in connection with this Announcement, any statement contained herein or otherwise.

 

Further information

 

This Announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be made solely through the Scheme Document and the accompanying Forms of Proxy, which contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any approval, decision or other response to the Acquisition should be made only on the basis of the information in the Scheme Document. Artilium   Shareholders are strongly advised to read the formal documentation in relation to the Acquisition.

 

 

 

 

This Announcement has been prepared for the purpose of complying with the laws of England and Wales, the AIM Rules and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

 

The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and service of this Announcement shall not give rise to any implication that there has been no change in the facts set forth in this Announcement since such date.

 

This Announcement does not constitute a prospectus or prospectus equivalent document.

 

Forward looking statements

 

This Announcement includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are based on current expectations and projections about future events. Pareteum’s actual results may differ materially from those discussed herein, or implied by, these forward-looking statements. Forward-looking statements are generally identified by words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “project,” “should,” “will,” “would,” “could,” “continue,” “likely” or the negative or plural of such words and other similar expressions. In addition, any statements that refer to expectations or other characterizations of future events or circumstances are forward-looking statements. The statements that contain these or similar words should be read carefully because these statements discuss Pareteum’s future expectations, contain projections of Pareteum’s future results of operations or of Pareteum’s financial position, business strategy, short-term and long-term business operations and objectives, financial needs and other “forward-looking” information. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation: the risk that the acquisition is not completed on a timely basis or at all; the ability to integrate Artilium into Pareteum’s business successfully and the amount of time and expense spent and incurred in connection with the integration; the possibility that competing offers will be made; the risk that the economic benefits and other synergies that Pareteum’s management anticipates as a result of the acquisition are not fully realized or take longer to realize than expected; the risk that certain risks and liabilities associated with the acquisition have not been discovered; the risk that the approval of Artilium shareholders of the acquisition may not be obtained or that other conditions of the acquisition will not be satisfied; changes in global or local political, economic, business, competitive, market and regulatory forces; changes in exchange and interest rates; changes in tax and other laws or regulations; future business combinations or disposals; operating costs, customer loss and business disruption (including difficulties in maintaining relationships with employees, customers or suppliers) occurring prior to completion of the acquisition or if the acquisition is not completed at all; changes in the market price of shares of Pareteum or Artilium; and changes in the economic and financial conditions of the businesses of Pareteum or Artilium.

 

The foregoing does not represent an exhaustive list of risks. Additional factors are described in Pareteum’s public filings with the SEC, and other factors are described in Pareteum’s proxy statement for its 2018 annual meeting of stockholders, which was filed with the U.S. Securities and Exchange commission on August 3, 2018. Moreover, Pareteum operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for Pareteum’s management to predict all risks, nor can Pareteum assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements Pareteum may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Announcement may not occur and actual results could differ materially and adversely from those anticipated or implied in the information in this Announcement.

 

 

 

 

Any forward-looking statements in this Announcement are not guarantees of future performance, and actual results, developments and business decisions may differ from those contemplated by those forward-looking statements, possibly materially. Accordingly, you should not place undue reliance on any such forward-looking statements. All forward-looking statements included in this Announcement are based on information available to Pareteum management on the date of such information. Except to the extent required by applicable laws or rules, Pareteum undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to Pareteum or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained throughout this Announcement.

 

No profit forecasts or estimates

 

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per ordinary share for Artilium or Pareteum for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per ordinary share for Artilium or Pareteum.

 

Overseas shareholders

 

Unless otherwise determined by Artilium and Pareteum or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or from within a jurisdiction if to do so would constitute a violation of the laws of that jurisdiction.

 

Accordingly, copies of the Scheme Document and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving the Scheme Document and all other documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from jurisdictions where to do so would violate the laws in that jurisdiction.

 

It is the responsibility of each Overseas Holder to satisfy himself as to the full observance of the laws and regulatory requirements of the relevant jurisdiction in connection with the Acquisition, including obtaining any governmental, exchange control or other consents which may be required, or the compliance with other necessary formalities which are required to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction.

 

The Scheme Document and its accompanying documents have been prepared in connection with a proposal in relation to a scheme of arrangement pursuant to, and for the purpose of complying with, English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if these documents had been prepared in accordance with the laws of jurisdictions outside England and Wales.

 

 

 

 

The availability of New Pareteum Shares under the Acquisition to Artilium Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Further details are set out in paragraph 19 of Part 2 (Explanatory Statement) of the Scheme Document.

 

Notice to US investors

 

The New Pareteum Shares are expected to be issued in the United States in reliance upon the exemption from the registration requirements of the US Securities Act provided by section 3(a)(10) thereof.

 

For the purposes of qualifying for the exemptions from the registration requirements of the US Securities Act afforded by section 3(a)(10), Artilium will advise the Court through counsel that the Court's sanction of the Scheme will be relied upon by Pareteum as an approval of the Scheme following a hearing on the fairness of the terms and conditions of the Scheme to Artilium Shareholders at which hearing all such shareholders are entitled to appear in person or through counsel to support or oppose the sanctioning of the Scheme and with respect to which notification has been given to all Artilium Shareholders.

 

Scheme Shareholders (whether or not US persons) who are or will be affiliates (within the meaning of the US Securities Act) of Artilium or Pareteum prior to, or of Pareteum after, the Effective Date will be subject to certain restrictions on transfers of the New Pareteum Shares received pursuant to the Scheme. Otherwise, the New Pareteum Shares generally should not be treated as "restricted securities" within the meaning of Rule 144(a)(3) under the US Securities Act and persons who receive securities under the Scheme (other than affiliates) may resell them without restriction under the US Securities Act. For a description of these and certain further restrictions on offers, sales and transfers of the New Pareteum Shares and the distribution of the Scheme Document, and additional information applicable to US shareholders, see paragraph 19 of Part 2 (Explanatory Statement) of the Scheme Document.

 

The receipt of New Pareteum Shares pursuant to the Acquisition by a US Shareholder may be a taxable transaction for US federal income tax purposes and under applicable state and local, as well as foreign and other, tax laws. Each Artilium Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition.

 

It may be difficult for US Shareholders to enforce their rights and claims arising out of the US federal securities laws, Artilium is located in countries other than the United States, and some or all of its officers and directors may be residents of countries other than the United States. US Shareholders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgment.

 

None of the securities referred to in the Scheme Document have been approved or disapproved by the SEC, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of the information contained in the Scheme Document. Any representation to the contrary is a criminal offence in the United States.

 

The financial information included in, or incorporated by reference into, the Scheme Document has been prepared in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the European Union and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

 

 

 

 

Disclosure requirements of the Code

 

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

 

Opening Position Disclosures must also be made by the offeree company and by any offeror, and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

 

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Takeover Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

Publication on website

 

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement will be available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions) on Artilium’s website at www.artilium.com/investors and on Pareteum's website at www.pareteum.com/investors by no later than 12 noon on the business day following this announcement. The contents of the websites referred to in this announcement are not incorporated into and do not form part of this announcement.