News Column

SPEED COMMERCE, INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Change in Directors or Principal Officers, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Financial Statements and Exhibits

June 3, 2014

Item 1.01. Entry into a Material Definitive Agreement.

Sale of Series C Convertible Preferred Stock

On June 2, 2014, Speed Commerce, Inc. (the "Company") entered into a Purchase Agreement (the "Purchase Agreement") pursuant to which it issued and sold to institutional investors (the "Investors") for approximately $10,000,000 an aggregate of 3,333,333 of the Company's Series C Convertible Preferred Stock (the "Series C Preferred Stock") and warrants to purchase an aggregate of up to 833,333 shares of the Company's common stock (the "Warrants"). In connection with the sale of the Series C Preferred Stock and Warrants, the Company entered into a registration rights agreement with the Investors (the "Registration Rights Agreement"). The Company received gross proceeds of approximately $10,000,000, less transaction expenses.

The Purchase Agreement provides, among other things, that the Company will (i) not issue any securities until 90 days from the date of Closing, subject to certain exceptions, and (ii) not enter into a variable rate transaction prior to the first anniversary of the date of Closing.

Description of the Series C Preferred Stock

The Series C Preferred Stock will accrue dividends at an annual rate of 7% payable in cash or, at the Company's option with respect to dividends accrued during the first year, additional shares of Series C Preferred Stock, and is convertible at any time commencing six months after the Closing into common stock of the Company at a conversion price of $3.00 per share (subject to adjustment). The Company has the right to force the conversion of the Series C Preferred Stock in the event that the Company's common stock trades above $5.00 per share (subject to adjustment) for 28 trading days in a 30 consecutive trading day period commencing on the initial convertibility date provided that the conversion shares are registered pursuant to an effective registration statement available for resales and certain other conditions are met. Commencing on the one-year anniversary of the issuance date, the Company also has the right to call the outstanding Series C Preferred Stock at a redemption price per share equal to 110% of the stated value per share of the Series C Preferred Stock, plus accrued and unpaid dividends thereon, provided that the conversion shares are registered pursuant to an effective registration statement available for resales and certain other conditions are met.

The Series C Preferred Stock will participate pari passu with the holders of the Company's common stock (on an as-converted basis) in the net assets of the Company after the satisfaction in full of the debts of the Company and the payment of any liquidation preference owed to the holders of shares of capital stock of the Corporation ranking prior to the Series C Preferred Stock upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary. Consolidation or merger of the Company into or with any other entity or entities shall not be deemed to be a liquidation, but the sale, lease or conveyance of all or substantially all the Corporation's assets (subject to certain exceptions) shall be deemed a liquidation.

In addition to any class voting rights provided by law and the Certificate of Designation, the holders of Series C Preferred Stock shall have the right to vote together with the holders of common stock as a single class on any matter on which the holders of common stock are entitled to vote (including the election of directors) in addition to any class voting rights provided by law and as otherwise provided in the Certificate of Designation. The holders of the Series C Preferred Stock are entitled to cast one vote for each share of common stock that would be issuable upon the conversion of all the shares of Series C Preferred Stock held by such holder (subject to certain exceptions) on the record date for the determination of shareholders entitled to vote.

2



--------------------------------------------------------------------------------

Description of the Warrants



The Warrants are exercisable at any time six months after their issuance and entitle the Investors to purchase shares of the Company's common stock for a period of five years from the date of the Warrants. The Warrants are exercisable at an exercise price of $3.50 per share (subject to adjustment). The Company has the right to force the exercise of the Warrants for cash in the event that the Company's common stock trades above $6.00 (subject to adjustment) for 28 trading days in a period of 30 consecutive trading days after the initial exercisability date, provided that the warrant shares are registered pursuant to an effective registration statement available for resales and certain other conditions are . . .

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities

The information contained in Item 1.01 is hereby incorporated by reference. The Series C Preferred Stock and Warrants were offered and sold to accredited investors pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 30, 2014, Keith A. Benson resigned from the Board of Directors of the Company effective May 31, 2014. At the time of his resignation, Mr. Benson was a member of the Company's Audit and Governance and Nominating Committees. Mr. Benson indicated that the resignation was a result of the Company's mandatory retirement policy and not due to any disagreements with the Company on any matter relating to its operations, policies or practices. A copy of Mr. Benson's resignation letter is attached hereto as Exhibit 99.2.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Effective June 2, 2014, the Company filed the Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock. The information set forth in Item 1.01 is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits 4



--------------------------------------------------------------------------------

Exhibit No. Description 10.1 Form of Purchase Agreement dated June 2, 2014 10.2 Form of Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of Speed Commerce dated June 2, 2014 10.3 Form of Warrant 10.4 Form of Registration Rights Agreement 10.5 Form of Waiver and Amendment Agreement with Wells Fargo Capital Finance, LLC dated June 2, 2014 99.1 Press Release announcing $10,000,000 Private Offering dated June 3, 2014 99.2 Keith A. Benson Letter of Resignation dated May 30, 2014


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Edgar Glimpses


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters