Item 1.01 Entry
Into a Material Definitive Agreement
On November 18, 2022, we acquired all of the issued
and outstanding shares of capital stock of Wheels Labs, Inc. (“Wheels”), and Wheels became our wholly-owned subsidiary when
another wholly-owned subsidiary (“Merger Sub”) merged with and into Wheels (the “Merger”). In connection with
the Merger, we entered into an Amended and Restated Agreement and Plan of Merger (the “Amended Merger Agreement”) with Wheels
and Merger Sub and an Escrow Agreement (the “Escrow Agreement”) with Wheels, Merger Sub, an escrow agent and an authorized
representative of certain security holders of Wheels (the “Authorized Representative”).
Amended and Restated Agreement
and Plan of Merger
The Amended Merger Agreement
amended and restated the Agreement and Plan of Merger that we entered into with Wheels and Merger Sub on October 24, 2022.
We entered into the Amended Merger Agreement on November 18, 2022 and the Merger was completed immediately thereafter. Pursuant
to the Amended Merger Agreement, in exchange for all of the outstanding share capital of Wheels, Merger Sub merged with and into Wheels
and became our wholly-owned subsidiary. The following is a summary of the Amended Merger Agreement, and we suggest that you review the
entire Agreement, which is attached as an exhibit to this Current Report, if you would like to have a deeper understanding of its terms.
Consideration
In exchange for all of the
outstanding share capital of Wheels, we issued to security holders of Wheels approximately 6,751,811 Series A convertible preferred stock
equal to six and ninety-nine hundredths (6.99%) of our total issued and outstanding common stock immediately prior to the Closing (as
may be adjusted downwards pursuant to the terms and conditions of the Amended Merger Agreement. The Series A convertible preferred stock
will automatically convert into shares of the Company’s Class A common stock upon the approval of the majority of the holders of
the Company’s common stock to allow for such issuance under Nasdaq Rule 5635 (the “Stockholder Approval”). The Series
A Convertible Preferred Stock will convert on a one-for-one basis, provided that if Wheels does not provide certain financial information
by December 31, 2022, the holders of the Series A Convertible Preferred Stock will receive 10% less shares of Class A common stock and
if such financial information is not received by January 15, 2023, they the number of shares of Class A common stock that they will receive
will be reduced by a further 10%.
If the Stockholder Approval
has not been received within one-year of the Merger, then the holders of the Series A convertible preferred stock may vote to have the
Series A Preferred Stock redeemed by the Company at the market price (as determined by the volume-weighted average price) of the Class
A common stock on the date of the Merger. The Series A convertible preferred stock has no voting rights other than as to those matters
that affect the Series A convertible preferred stock as a class. Starting March 31, 2023, we are to pay an annual dividend of 7.5% of
the market price (as determined by the volume-weighted average price) of the Class A common stock on the date of the Merger payable in
quarterly amounts. The Certificate of Designation, Preferences and Rights for the Series A Preferred Stock is attached as an exhibit to
this Current Report.
Representations and Warranties
In the
Amended Merger Agreement, we made certain representations and warranties (with certain exceptions set forth in the Amended Merger Agreement’s
disclosure schedules) relating to, among other things: (a) our and our subsidiaries proper corporate existence and similar corporate matters;
(b) our proper corporate authorization in relation to the execution, delivery and enforceability of the Amended Merger Agreement and other
transaction documents; (c) the non-contravening effect our performance under the Amended Merger Agreement will have in relation to our
operations or compliance with related laws; (d) our capital structure; (e) brokers and finders fees; (f) intellectual property; (g) litigation;
(h) our related party transactions; and (i) other customary representations and warranties.
In the
Agreement, Wheels makes certain representations and warranties relating to, among other things: (a) proper corporate organization and
similar corporate matters; (b) authorization, execution, delivery and enforceability of the Agreement and other transaction documents;
(c) the non-contravening effect of Wheels’ performance under the Agreement will have in relation to its operations or compliance
with related laws; (d) no government authorization; (e) Wheels’ capital structure; (f) required consents; (h) financial statements;
(i) property and title to assets; (j) litigation; (k) contracts; (l) licenses and permits; (m) intellectual property; (n) related party
transactions; and (o) other customary representations and warranties.
Escrow Agreement
The shares of Series A Convertible
Preferred Stock issued pursuant to the Amended Merger Agreement were issued into escrow pursuant to the Escrow Agreement. Under the terms
of the Escrow Agreement, all or a portion of the shares held in escrow may be returned to the Company in the event that certain of the
representations and warranties of Wheels, primarily those concerning its indebtedness and legal proceedings, are incorrect. The term of
the of the Escrow Agreement is eighteen months as may be extended in the event of ongoing legal proceedings involving Wheels.
