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SINGLE TOUCH SYSTEMS INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Financial Statements and Exhibits

July 29, 2014



Item 1.01. Entry into a Material Definitive Agreement.

On July 24, 2014 (the "Closing Date"), Single Touch Systems, Inc. (the "Company"), Single Touch Interactive, Inc., a wholly-owned subsidiary of the Company, DoubleVision Networks, Inc., ("DoubleVision"), and the shareholders of the DoubleVision (collectively the "Sellers") entered into a Share Purchase Agreement (the "Purchase Agreement") pursuant to which acquired all of the shares of DoubleVision.

The Company paid $3.6 million (the "Purchase Price") for DoubleVision by issuing 8,000,000 shares of the Company's common stock (the "Shares") to the Sellers at an agreed-upon valuation of $0.45 per share. The Company also agreed to pay $400,000 to one of DoubleVision's creditors. Substantially all of the Sellers are subject to lockup agreements that restrict the sale of the Shares for at least one year. The Purchase Price may be reduced subject to certain conditions related to DoubleVision's liabilities. The Sellers also have an earn -out provision which could cause the Company to issue additional shares of the Company's common stock equal to $1,000,000 (valued at the average closing price for the ninety days ending July 31, 2015) to the Sellers if the Company's media placement revenues for the twelve-month period from August 1, 2014 to July 31, 2015 are at least $3,000,000, subject to certain conditions such as receipt of customer payments and achievement of a gross margin threshold.

In connection with the Purchase Agreement, on the Closing Date, the Company entered into consulting agreements with two of DoubleVision's officers for $5,000 each quarter provided certain milestones are achieved. The Purchase Agreement contains standard representations, warranties and covenants.

In connection with the shares of common stock issued or issuable under the Purchase Agreement, the Company relied on Section 4(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering. Each of the Sellers made representations that they were accredited investors.

The descriptions of the terms of the Purchase Agreement do not purport to be complete and are qualified in their entirety by the copy which is included as an exhibits to this Current Report.

Item 9.01 Financial Statements and Exhibits.



(a) Financial Statements of business acquired. The required financial statements will be filed no later than 71 calendar days after the date of the filing of this report on Form 8-K.

(b) Pro forma financial information. The required pro forma financial information will be filed no later than 71 calendar days after the date of the filing of this report on Form 8-K.

(d) Exhibits Exhibit Number Description 10.1 Share Purchase Agreement 99.1 Press Release 2


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Source: Edgar Glimpses


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