Attached files
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EX-99.1 - PRESS RELEASE DATED NOVEMBER 20, 2017. - Rekor Systems, Inc. | a991-pressreleaseneosyste.htm |
EX-4.1 - FORM OF REGISTRATION RIGHTS AGREEMENT. - Rekor Systems, Inc. | exhibit41_novume-neosyste.htm |
EX-2.1 - AGREEMENT AND PLAN OF MERGER - Rekor Systems, Inc. | exhibit21_projectneosyste.htm |
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
November 16, 2017
Date of Report (date of earliest event reported)
NOVUME SOLUTIONS, INC.
(Exact name of Registrant as specified in its charter)
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Delaware
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000-55833
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81-56266334
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(State or other jurisdiction of
incorporation or organization)
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(Commission
File Number)
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(I.R.S. Employer
Identification Number)
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14420 Albemarle Point Place, Suite 200,
Chantilly, VA 20151
(Address of principal executive offices)
(703) 953-3838
(Registrant’s telephone number, including area
code)
(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 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 checkmark 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.
Merger Agreement
On
November 16, 2017, Novume Solutions, Inc., a Delaware corporation
(“Novume” or the
“Company”), entered into
an Agreement and Plan of Merger (the “Merger Agreement”) by and
among Novume, NeoSystems Holding, LLC, a Delaware limited liability
company and wholly owned subsidiary of Novume (“Merger Sub”), NeoSystems
HoldCo, Inc., a Virginia corporation (“NeoSystems HoldCo”),
NeoSystems LLC, a Virginia limited liability company and a wholly
owned subsidiary of NeoSystems HoldCo (“NeoSystems”), Robert W.
Wilson, Jr., in his personal capacity, Michael Tinsley, in his
personal capacity (Messrs. Wilson and Tinsley, collectively, the
“Key
Holders”) and Michael Tinsley, in his capacity as the
representative of each shareholder of NeoSystems Holdco that has
not demanded and perfected appraisal rights under the Virginia
Stock Corporation Act (the “Participating
Stockholders”). Pursuant to the Merger Agreement,
Novume will acquire NeoSystems through a forward merger, whereby
NeoSystems HoldCo will merge with and into Merger Sub, with Merger
Sub as the surviving entity and the sole holder of NeoSystems (the
“Merger”).
The
Merger Agreement was approved by the boards of directors of Novume
and NeoSystems Holdco, and the sole members of Merger Sub and
NeoSystems, respectively. The Merger must be approved by more than
two-thirds of the capital stock of NeoSystems Holdco entitled to
vote on the Merger, voting as a single group. No vote by the Novume
stockholders will be required to consummate the
Merger.
The Key
Holders have entered into a voting agreement with Merger Sub
pursuant which they have agreed to vote all of their shares of
NeoSystems HoldCo currently owned of record or beneficially, and
any additional shares acquired, (a) in favor of approval of the
Merger and (b) against approval or adoption of any Alternative
Transaction (as defined below). The Key Holders own, in the
aggregate, over two-thirds of the outstanding voting shares of
NeoSystems HoldCo.
Upon
the consummation of the Merger (the “Closing”), the
Participating Stockholders will receive the following: (a) $5
million in cash and (b) an amount of shares of the Company’s
Common Stock (the “Common Stock”) equal to
$10 million (determined by dividing such amount by the price per
share to the public of such shares of Common Stock sold in the
first Qualifying Offering by the Company) minus $1,982,514, which
represents the aggregate dollar value of the spread of the options
of NeoSystems Holdco (the “HoldCo Options”) that
will be assumed by Novume at Closing (collectively, the
“Merger
Consideration”). A “Qualifying Offering”
is defined as a firm commitment underwritten public offering of the
Company for an aggregate price to the public of at least $10
million, which results in the Company’s successful listing of
Common Stock on the Nasdaq Stock Market or the New York Stock
Exchange. The Merger Consideration is subject to certain
adjustments in accordance with the Merger Agreement, including the
assumption of NeoSystems’ obligations with respect to the
holders of certain debt facilities and shares of preferred stock of
NeoSystems HoldCo (the “HoldCo Preferred Stock”).
Pursuant to the Merger Agreement, the Participating Stockholders
may not, directly or indirectly, sell, offer to sell or contract to
sell the shares of Common Stock received as Merger Consideration
until 180 calendar days after the Qualifying Offering.
As
consideration for the consummation of the Merger in addition to the
Merger Consideration, at Closing Novume will (a) assume each HoldCo
Option outstanding immediately prior to Closing that is held by an
optionholder that continues in the employment, or service as a
consultant or director, of NeoSystems; (b) assume the obligations
of NeoSystems with respect to certain of its debt facilities,
including outstanding principal totaling, in the aggregate, $4.95
million; and (c) redeem all of the shares of HoldCo Preferred Stock
at Closing for up to an amount of $2.25 million.
The
Merger Agreement contains customary representations, warranties and
covenants made by Novume, Merger Sub, NeoSystems HoldCo, NeoSystems
and the Key Holders. Among others, NeoSystems HoldCo and NeoSystems
have agreed to operate their businesses, respectively, in the
ordinary course during the period between the execution of the
Merger Agreement and the consummation of the transactions
contemplated by the Merger Agreement, and not to solicit proposals
relating to or enter into discussions concerning any proposals for
alternative business combination transactions relating to
NeoSystems HoldCo or NeoSystems (an “Alternative
Transaction”).
The
consummation of the Merger is subject to, among other things, the
completion of the Qualifying Offering. .
The
Merger Agreement contains certain customary termination rights for
Novume and NeoSystems HoldCo including, among other things, the
completion of the Qualifying Offering by February 28, 2018 and the
consummation of the Merger prior to March 21, 2018. Additionally,
Novume has agreed to pay NeoSystems HoldCo an amount equal to the
Merger Expenses (as defined in the Merger Agreement) upon
termination for failure to conduct a Qualifying Offering by
February 28, 2018 and in the event of certain material incurable
breaches of representations, warranties or covenants by
Novume.
The shares of Common Stock being issued in the
Merger will be issued in reliance upon the exemptions from
registration under the Securities Act of 1933, as amended (the
“Securities
Act”), provided by
Section 4(a)(2) and Rule 506 of Regulation D promulgated
thereunder.
The
foregoing description of the Merger Agreement does not purport to
be complete and is qualified by reference in its entirety to the
full text of the Merger Agreement, a copy of which is attached
hereto as Exhibit 2.1 and is incorporated herein by
reference.
The
Merger Agreement has been filed as an exhibit hereto to provide
investors with information regarding its terms. It is not intended
to provide any other factual information about the Company. In
particular, the representations and warranties and/or covenants
contained in the Merger Agreement were made only for the purposes
of the Merger Agreement as of the specific dates therein, and were
solely for the benefit of the parties to the Merger Agreement. The
representations and warranties and/or covenants contained in the
Merger Agreement may be subject to limitations agreed upon by the
parties to the Merger Agreement and are qualified by information in
confidential disclosure schedules provided in connection with the
signing of the Merger Agreement. These confidential disclosure
schedules contain information that modifies, qualifies and creates
exceptions to the representations and warranties and/or covenants
set forth in the Merger Agreement. Moreover, certain
representations and warranties and/or covenants contained in the
Merger Agreement may be subject to a standard of materiality
provided for in the Merger Agreement and have been used for the
purpose of allocating risk among the parties, rather than
establishing matters of fact. Investors should not rely on the
representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of the Company or any of its subsidiaries or affiliates.
Moreover, information concerning the subject matter of the
representations and warranties and/or covenants may change after
the date of the Merger Agreement, which subsequent information may
or may not be fully reflected in the Company’s public
disclosures.
Registration Rights
In connection with the
consummation of the Merger, and pursuant to a Registration Rights
Agreement to be executed at Closing (the “Registration
Rights Agreement”), the Company
has agreed to provide certain incidental registration rights to the
Key Holders in respect of the Common Stock issued to them as Merger
Consideration (collectively, the “Registrable
Securities”). Specifically,
following the Company’s Qualifying Offering, the Company has
agreed to use commercially reasonable efforts to include the
Registrable Securities on any registration statement that the
Company proposes to register any of its securities for its own
account or on behalf of any of its other stockholders (other than
in connection with a registration relating solely to the sale of
shares to the Company’s employees).
The foregoing description of
the Registration Rights
Agreement does not purport
to be complete and is qualified by reference in its entirety to the
full text of the form of Registration Rights
Agreement, a copy of which
attached hereto as Exhibit 4.1 and is incorporated herein by
reference.
Item 3.02 Unregistered Sales of Equity Securities
The
information above in Item 1.01 regarding the Common Stock is
incorporated herein by reference in response to this Item
3.02.
Item 3.03 Material Modification to Rights of Security
Holders.
The
information above in Item 1.01 regarding the Common Stock is
incorporated herein by reference in response to this Item
3.03.
Item 8.01 Other Events.
On
November 20, 2017, Novume, NeoSystems HoldCo and NeoSystems issued
a joint press release announcing, among other things, the execution
of the Merger Agreement. A copy of the press release is filed as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Additional Information.
This
announcement is neither an offer to sell, nor a solicitation of an
offer to buy, any securities and shall not constitute an offer,
solicitation or sale in any jurisdiction in which such offer,
solicitation or sale is unlawful. The securities described herein
have not been and will not be registered under the Securities Act,
or any state securities laws, and unless so registered, may not be
offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Securities Act,
and applicable state securities laws.
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibits
Exhibit No.
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Description
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Agreement
and Plan of Merger, dated as of November 16, 2017, by and among
Novume Solutions, Inc., NeoSystems Holding, LLC, NeoSystems HoldCo,
Inc., NeoSystems LLC, Robert W. Wilson, Jr., in his personal
capacity, Michael Tinsley, in his personal capacity and Michael
Tinsley as the Stockholders’ Agent.
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Form of
Registration Rights Agreement.
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Press
release dated November 20, 2017.
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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 hereunto duly authorized.
NOVUME
SOLUTIONS, INC.
By:
/s/ Robert A. Berman
Name:
Robert A.
Berman
Title:
Chief Executive
Officer
Date:
November 20, 2017
EXHIBIT INDEX
Exhibit No.
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Description
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Agreement
and Plan of Merger, dated as of November 16, 2017, by and among
Novume Solutions, Inc., NeoSystems Holding, LLC, NeoSystems HoldCo,
Inc., NeoSystems LLC, Robert W. Wilson, Jr., in his personal
capacity, Michael Tinsley, in his personal capacity and Michael
Tinsley as the Stockholders’ Agent.
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Form of
Registration Rights Agreement.
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Press
release dated November 20, 2017.
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