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 (Date of earliest event reported): May 9, 2018

 

PROPEL MEDIA, INC.

(Exact Name of Registrant as Specified in Charter)

  

Delaware   000-55360   47-2133177
(State or Other Jurisdiction   (Commission   (IRS Employer
of Incorporation)   File Number)   Identification No.)

 

2010 Main Street, Suite 900, Irvine, California 92614

(Address of Principal Executive Offices) (Zip Code)

 

(949) 251-0640

(Registrant’s Telephone Number, Including Area Code)

 

Not Applicable

(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 ( 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 Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 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 1.01 Entry Into a Material Definitive Agreement.

 

On May 9, 2018, Propel Media, Inc. (the “ Company ”) entered into a Fourth Amendment (the “ Amendment ”) to the Unit Exchange Agreement (the “ Exchange Agreement ”), dated as of October 10, 2014, as amended, by and among the Company, Kitara Media Corp. (“ Kitara ”), Propel Media LLC (formerly known as Future Ads LLC) (“ Propel ”), and the former members of Propel (the “ Transferors ”). Prior to the Amendment, the Exchange Agreement provided that, immediately after the payment of the Final Payment (defined below), $6,000,000 of additional consideration (the “ Additional Consideration ”) was payable by the Company to the Transferors in cash. The Amendment reduced the amount of Additional Consideration to $1,440,000 . The Company paid the Transferors the reduced amount of Additional Consideration in cash promptly after payment of the Final Payment as described below.

 

The foregoing summary of the Amendment is qualified in its entirety by reference to the text of the Amendment, which is filed as an exhibit to this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference.

 

Item 8.01 Other Events.

 

On January 28, 2015, in connection with the closing of the business combination between the Company, Kitara and Propel, the Company, Kitara and Propel as “Borrowers” and certain of their subsidiaries as “Guarantors” entered into a financing agreement, as amended (“ Financing Agreement ”), with certain financial institutions as “ Lenders ,” Highbridge Principal Strategies, LLC, as collateral agent for the Lenders, and PNC Bank, National Association, as a Lender and administrative agent for the Lenders. The Financing Agreement and other loan documents provided for $12,500,000 to be paid to the Lenders on the fourth anniversary of the closing date of the Financing Agreement (the “ Final Payment ”).

 

On May 9, 2018 , the parties to the Financing Agreement entered into a letter agreement providing that the Final Payment would be reduced from $12,500,000 to $3,000,000. The Company paid the Final Payment promptly upon execution of the letter agreement.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

  

Exhibit   Description
     
2.1   Fourth Amendment, dated as of May 9, 2018 , to the Unit Exchange Agreement, dated as of October 10, 2014, by and among Kitara Media Corp., Propel Media, Inc., formerly known as Kitara Holdco Corp., Propel Media LLC, formerly known as Future Ads LLC, Lowenstein Enterprises Corporation, Family Trust of Jared L. Pobre U/A DTD 12/13/2004, Newport Holding Trust and Neptune Capital Trust.

  

  1  

 

 

SIGNATURE

 

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: May 9, 2018

 

  PROPEL MEDIA, INC.
   
  By: /s/ Marv Tseu
    Name:  Marv Tseu
    Title: Chief Executive Officer

 

 

2

 

Exhibit 2.1

 

FOURTH AMENDMENT TO

UNIT EXCHANGE AGREEMENT

 

This Fourth Amendment (this “ Amendment ”) to Unit Exchange Agreement (as amended and supplemented prior to the date hereof, the “ Exchange Agreement ”) is made as of May 9, 2018, by and between Kitara Media Corp., a Delaware corporation (“ Kitara ”), Propel Media, Inc., formerly known as Kitara Holdco Corp., a Delaware corporation (“ Holdco ”), Propel Media LLC, formerly known as Future Ads LLC, a California limited liability company (“ Future Ads ”), Lowenstein Enterprises Corporation (“ Lowenstein ”), Family Trust of Jared L. Pobre, U/A DTD 12/13/2004 (“ Pobre Trust ”), Newport Holding Trust (“ Newport ”) and Neptune Capital Trust (“ Neptune ” and together with Kitara, Holdco, Future Ads, Lowenstein, Pobre Trust and Newport, the “ Parties ”). Defined terms used herein and not otherwise defined shall have the meanings ascribed to them in the Exchange Agreement.

 

W I T N E S S E T H:

 

WHEREAS, the Parties are party to the Exchange Agreement; and

 

WHEREAS , pursuant to Section 8.3 of the Exchange Agreement, the Exchange Agreement may be amended by a written agreement executed by the Parties; and

 

WHEREAS, the Parties previously amended certain provisions of the Exchange Agreement in the First Amendment to Unit Exchange Agreement dated as of December 23, 2014, in the Second Amendment to Unit Exchange Agreement dated as of April 29, 2015 and in the Third Amendment to Unit Exchange Agreement dated as of January 26, 2016; and

 

WHEREAS, the Parties desire to further amend certain provisions of the Exchange Agreement as set forth herein.

 

NOW THEREFORE , in consideration of the premises and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.       Amendment to Exchange Agreement.

 

(a)       Clause (iii) of Section 2.1(b) of the Exchange Agreement is hereby amended by replacing the reference to “$6,000,000” with “$1,440,000”.

 

2.       Governing Law. This Amendment shall be governed in all respects in accordance with the provisions of Section 8.9 of the Exchange Agreement.

 

3.       No Other Amendment. Except as amended hereby, the Exchange Agreement shall remain in full force and effect. By executing this Amendment below, each of the Parties certifies that this Amendment has been executed and delivered in compliance with the amendment provisions of the Exchange Agreement.

 

4.       Counterparts. This Amendment may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.

 

5.       Facsimile or Portable Document File Signature . This Amendment may be executed by facsimile or portable document file signature and a facsimile or portable document file signature shall constitute an original for all purposes.

 

[The remainder of this page is intentionally left blank.]

   

 

 

 

IN WITNESS WHEREOF , the Parties have caused this Amendment to be executed by their duly authorized representatives as of the date hereof.

 

  PROPEL MEDIA, INC.
   
  By: /s/ Marv Tseu
    Name:  Marv Tseu
    Title: CEO
     
  KITARA MEDIA CORP.
   
  By: /s/ Marv Tseu
    Name: Marv Tseu
    Title: CEO
     
  PROPEL MEDIA LLC
   
  By: /s/ Marv Tseu
    Name: Marv Tseu
    Title: CEO
     
  LOWENSTEIN ENTERPRISES CORPORATION
   
  By: /s/ Jared Pobre
    Name: Jared Pobre
    Title: CEO
     
  FAMILY TRUST OF JARED L. POBRE,
U/A DTD 12/31/2004
   
  By: /s/ Jared Pobre
    Name: Jared Pobre
    Title: Trustee
     
  NEWPORT HOLDING TRUST
   
  By: /s/ David McNair
    Name: David McNair
    Title: Managing Trustee
     
  NEPTUNE CAPITAL TRUST
   
  By: /s/ Brian Mason
    Name: Brian Mason
    Title: Managing Trustee

 

Signature page to fourth amendment to unit exchange agreement