Attached files
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| EX-99.1 - PRESS RELEASE - root9B Holdings, Inc. | rtnb_ex991.htm |
| EX-2.1 - PURCHASE AGREEMENT - root9B Holdings, Inc. | rtnb_ex21.htm |
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): April 30,
2017
root9B Holdings, Inc.
(Exact name of Company as specified in Charter)
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Delaware(State or other jurisdiction of incorporation or
organization)
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000-50502(Commission File No.)
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20-0443575(IRS Employee Identification No.)
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102 N. Cascade Avenue, Suite 220
Colorado Springs, CO 80919
(Address of Principal Executive Offices)
(602) 889-1137
(Issuer Telephone number)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Company under
any of the following provisions (see General Instruction A.2
below).
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)).
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13(e)-4(c))
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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).
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Emerging growth
company
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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.
The
information contained in Item 2.01 of this Current Report on Form
8-K is incorporated by reference into this Item 1.01.
Item 2.01
Completion of Acquisition or Disposition of Assets
On
April 30, 2017, root9B Holdings, Inc., a Delaware corporation
(“root9B”) sold to Exiger Canada, Inc.
(“Buyer”) (i) all of the shares of its Canadian
subsidiary IPSA International, Inc. (the “Company”), a
wholly owned subsidiary of IPSA International Services, Inc. (the
“Seller”), which is a wholly owned U.S. subsidiary of
root9B, and (ii) assets related to Seller’s Hong Kong,
London, and Miami offices (“Affiliate Offices”),
pursuant to a Purchase Agreement, dated as of April 30, 2017, by
and between the Seller and Buyer (the “Purchase
Agreement”).
The
Company and Affiliate Offices are in the business of (i) providing
due diligence, compliance and investigative services and solutions
related to citizenship by investment, visas, immigration, and
employment; and (ii) conducting corporate and other institutional
investigations into fraud, embezzlement and other misconduct. As
consideration for the sale, Buyer paid the Seller a purchase price
of $6,000,000 (the “Proceeds”). Although there can be
no assurance in this regard, Seller is also eligible to receive up
to $4,000,000 additional consideration under an earn out
arrangement based upon certain performance targets over the next
three years. The Proceeds were reduced by a Working Capital
Adjustment, as defined in the Purchase Agreement, currently
estimated to be in excess of $1.0 million, and four hundred
thousand dollars ($400,000) was deposited in escrow to secure
certain obligations and representations of root9B and its
affiliates. The Seller and Buyer each made customary
representations, warranties and covenants, including customary
indemnities, in the Purchase Agreement.
root9B
and Seller have retained their anti-money laundering remediation
and advisory services operations and assets, including the IPSA
trademark.
Ancillary to the
Purchase Agreement, Buyer and Seller entered into a Transition
Services Agreement (the “TSA”), pursuant to which
Seller will receive fees in return for select services to be
provided to the Buyer and the Company for up to six
months.
The
Proceeds from the sale of the Company and Affiliate Offices, net of
transaction costs, will be used to fund root9B’s
cybersecurity business and provide general working
capital.
The
foregoing description of the Purchase Agreement and the
transactions contemplated thereby is qualified in its entirety by
the terms of the Purchase Agreement, a copy of which is filed as
Exhibit 2.1 hereto and incorporated herein by
reference.
Our
annual report on Form 10-K for the fiscal year ended December 31,
2016 contains audited financial statements reflecting
Sellers’ entire business as a discontinued operation in the
Consolidated Statements of Operations for the two years ended
December 31, 2016 and 2015 and the Consolidated Balance Sheets as
of December 31, 2016 and 2015. This information is useful to
investors to understand the impact of the disposition.
Item
8.01
Other
Events.
On May 1, 2017,
root9B issued a press release announcing the transaction described
in Item 2.01 above, a copy of which is attached as Exhibit 99.1 to
this report.
Item 9.01
Financial
Statements and Exhibits.
(d)
Exhibits.
The
information set forth in the Exhibit Index immediately following
the signature page to this Current Report on Form 8-K is
incorporated by reference into this Item 9.01.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Company
has duly caused this Current Report to be signed on its behalf by
the undersigned hereunto duly authorized.
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ROOT9B HOLDINGS,
INC.
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Dated: May 1,
2017
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By:
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/s/
Dan
Wachtler
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Name:
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Dan
Wachtler
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Title:
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President
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EXHIBIT INDEX
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Exhibit
No.
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Description
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Purchase
Agreement, dated April 30, 2017, by and between IPSA International
Services, Inc. and Exiger Canada, Inc.*
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Press
Release dated May 1, 2017.
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*The
schedules and exhibits have been omitted pursuant to Item 601(b)(2)
of Regulation S-K. root9B agrees to furnish supplementally a copy
of such schedules and exhibits, or any section thereof, to the SEC
upon request.