Notes and other actions required for the reservation of the shares of Common Stock and
Preferred Stock as described in the Note Purchase Agreement.
The consent we have received constitutes the only stockholder approval
required under the DGCL, NASDAQ Listing Rules 5635(b), 5635(c) and 5635(d), our Restated Certificate of Incorporation and our Amended and Restated Bylaws, to approve the issuance of the Notes and all of the Common Stock and Preferred Stock issuable
upon conversion of the Notes and in connection with any exercise of Preemptive Rights. Our Board of Directors is not soliciting your consent or your proxy in connection with this action and neither consents nor proxies are being requested from
stockholders.
The actions taken by written consent of the Majority Stockholders will not become effective until the date that is twenty
(20) calendar days after this Information Statement is first mailed or otherwise delivered to holders of our Common Stock as of the Record Date.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND A PROXY
RECENT DEVELOPMENTS
Entry into Merger
Agreement
On October 31, 2018, the Company announced that it had entered into an Agreement and Plan of Merger (as amended by
Amendment No. 1 thereto, the Merger Agreement) with Parent and WC SACD One Merger Sub, Inc., a Delaware corporation (Purchaser) and wholly-owned subsidiary of Parent, pursuant to which, among other things, subject to the
terms and conditions of the Merger Agreement, Purchaser has agreed to make a cash tender offer (the Offer) to purchase all of the outstanding shares of the Companys Common Stock (the Shares), at a purchase price of
$3.68 per Share in cash, other than certain shares held by certain affiliates of the Company. Parent and Purchaser are affiliates of WC SACD One, Inc. (WC SACD), a joint venture formed by WndrCo Holdings, LLC (WndrCo),
General Catalyst Group IX, L.P. (GC IX), GC Entrepreneurs Fund IX, L.P. (together with GC IX, the GC Funds) and iSubscribed, Inc. (iSubscribed), and which was formerly known as WC SACD One, LLC. See INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON below for more information.
ACTION TAKEN
This Information Statement contains a brief summary of the material aspects of the action approved by the members of the Board of Directors of
the Company and the Majority Stockholders.
APPROVAL OF THE ISSUANCE OF COMMON STOCK AND PREFERRED STOCK UPON
CONVERSION OF THE NOTES AND UPON THE EXERCISE OF THE PREEMPTIVE RIGHTS IN
ACCORDANCE WITH APPLICABLE NASDAQ LISTING RULES
Note Purchase Agreement and Notes
On October 31, 2018, the Company entered into the Note Purchase Agreement, pursuant to which the Company sold to Parent, the Notes in the
aggregate principal amount of $30,000,000 for a purchase price in cash of $30,000,000, and issued to the other Investors additional Notes in the aggregate principal amount of $4,000,000 in exchange for certain unsecured convertible notes, in the
same aggregate principal amount, previously issued by the Company to such Investors (who received payment from the Company in cash of approximately $87,300 for the accrued and unpaid interest on such previously issued notes).
The Company used
approximately $14.6 million of the net proceeds from the sale of the Notes to repay in full certain indebtedness of the Company under that certain Credit Agreement, dated as of April 20, 2017 (as amended, restated, supplemented and
modified), among the Company, the other credit parties thereto, the lenders party thereto and Peak6 Investments, L.P., as administrative agent, and to pay related interest. The Company intends to use the balance of the net proceeds for general
corporate purposes.
The Notes mature on October 31, 2021, subject to potential acceleration in the event of certain specified events
of default, and bear interest, payable quarterly in cash, at the rate of 6% per annum through October 31, 2019, and at the rate of 8% per annum thereafter, in each case subject to an increase of 2% per annum if any event of default has occurred
and is continuing. The Notes are guaranteed by the Companys subsidiaries and are secured by a first-
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