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| UBPS > SEC Filings for UBPS > Form 8-K on 4-Jan-2013 | All Recent SEC Filings |
4-Jan-2013
Entry into a Material Definitive Agreement,
Note Purchase Agreement and Secured Convertible Notes
On December 28, 2012 (the "Closing Date"), Universal Business Payment Solutions Acquisition Corporation ("UBPS" or "we" or "us" or "our") entered into a Secured Convertible Note Agreement (the "Note Agreement") with Special Opportunities Fund, Inc., R8 Capital Partners, LLC, Bulldog Investors General Partnership, Ira Lubert, Mendota Insurance Company and American Services Insurance Company, Inc. (collectively, the "Note Investors") interested investors pursuant to which, UBPS issues $10 million in promissory notes secured by 50% of UBPS's ownership of JetPay, LLC ("JetPay"). In connection with the Note Agreement, the Company entered into separate Secured Convertible Promissory Notes with each of the Investors (the "Notes"). Amounts outstanding under the Notes will accrue interest at a rate of 12% per annum. The Notes mature on December 31, 2014. The Notes are not prepayable.
Pursuant to the Notes, the Note Investors will be entitled to convert all or any amounts outstanding under the Notes into common stock of UBPS, par value $0.001 ("Common Stock") at a conversion price of $5.15 per share, subject to certain adjustments.
In connection with the Note Agreement, UBPS entered into Registration Rights Agreements (the "Note Registration Rights Agreements") on the Closing Date with each of the Note Investors, pursuant to which UBPS agreed to provide registration rights with respect to the shares issuable upon conversion whereby the Note Investors would be entitled up to three "demand" registration requests and unlimited "piggy back" registration requests. To the extent a registration for the shares has not been declared effective by June 30, 2013, the conversion price will be reduced by $0.15 per share with additional reductions of $0.05 per share for every 30 days thereafter until a registration has been declared effective.
Pursuant to the Notes, the Note Investors will be entitled to convert all or any amounts outstanding under the Notes into common stock of UBPS, par value $0.001 ("Common Stock") at a conversion price of $5.15 per share, subject to certain adjustments.
In connection with the Notes, certain stockholders of UBPS agreed to transfer up to approximately 840,000 shares of Common Stock that they acquired prior to UBPS's initial public offering to certain of the Note Investors. Such shares were previously held in an escrow account established at the time of UBPS's initial public offering pursuant to Stock Escrow Agreements, each dated as of May 13, 2011, among each such stockholder, UBPS and Continental Stock Transfer & Trust Company. Following the proposed transfers, such shares will no longer be held in escrow. As part of such share issuance, UBPS entered into Registration Rights Agreements (the "Transfer Registration Rights Agreements"), dated as of the Closing Date, with such investors which entitle such investors to up to . . .
On the Closing Date, pursuant to the JetPay Agreement and the Agreement and Plan of Merger, dated as of July 6, 2012, as amended, by and among UBPS, ADC Merger Sub, Inc., ADC, PTFS, Carol and C. Nicholas Antich as Joint Tenants, C. Nicholas Antich, Carol Antich, Eric Antich, Lynn McCausland, the B N McCausland Trust, Joel E. Serfass and C. Nicholas Anitch as Representative (the "ADC Agreement" and collectively with the JetPay Agreement, the "Acquisition Agreements"), ADC Merger Sub, Inc., a wholly owned subsidiary of UBPS and JP Merger Sub, LLC, a wholly owned subsidiary of UBPS, merged with and into ADC and JetPay, respectively with ADC and JetPay surviving such mergers. The summaries of each of the Acquisition Agreements contained in the Proxy Statement are incorporated herein by reference. The description of the terms of JetPay Agreement and ADC Agreement are qualified in their entirety by reference to the JetPay Agreement and the ADC Agreement attached hereto as Exhibits 2.1 and 2.2, respectively, and incorporated herein by reference.
In connection with UBPS's Amended and Restated Certificate of Incorporation, UBPS's stockholders, other than its initial stockholders who acquired Common Stock prior to its initial public offering, had the right upon consummation of an initial business combination to redeem their shares of Common Stock for their pro rata share of the funds being held in a trust account containing proceeds from the initial public offering. On the Closing Date, 9,994,625 shares were redeemed and subsequently canceled by UBPS.
On the Closing Date, UBPS caused $16 million in cash to be delivered to the stockholders of ADC and approximately $6.8 million to WLES, L.P., JetPay's sole member. Additionally, UBPS issued 1 million shares of Common Stock to the stockholders of ADC and 3,666,667 shares of Common Stock to WLES, L.P., 3,333,333 of which was deposited in an escrow account to secure the obligations of WLES, L.P. under the JetPay Agreement.
Prior to the mergers, UBPS was a blank check company with no operations, formed as a vehicle for an acquisition of one or more operating businesses. The following information, which is required by Item 2.01(f) of Form 8-K, reflects the post-merger company on a consolidated basis (the "Company").
Business
The Company has not been engaged in any business prior to the transactions described in Items 1.01 and 2.01 above. Following the consummation of the Acquisition Agreements, the Company's business will consist of the businesses of ADC and JetPay. The businesses of ADC and JetPay (collectively, the "Businesses") are described in the Proxy, in the sections titled "Information about AD Computer", and "Information about JetPay", each of which section is incorporated herein by reference.
Risk Factors
The risks associated with the Businesses are described in the Proxy Statement in the section titled "Risk Factors", which is incorporated herein by reference.
Financial Information
. . .
The information regarding (i) the Note Agreement and the Notes (ii) the Assumption Agreement and (iii) the Credit Facility set forth in Item 1.01 above is incorporated herein by reference.
On December 28, 2012, UBPS received a letter from The Nasdaq Stock Market ("Nasdaq") indicating that Nasdaq believes that UBPS did not comply with IM-5101-2. Nasdaq advised that such failure serves as a basis for delisting. Nasdaq also advised that the Company may not meet Listing Rule 5505(a)(3), which requires a minimum of 300 public holders. Nasdaq had previously notified UBPS of its failure to comply with such requirement. UBPS filed a Current Report on Form 8-K disclosing such failure. UBPS was granted an extension until February 9, 2013 to achieve compliance with the minimum holders requirement.
UBPS has until January 4, 2013 to appeal the delisting decision in front of a Nasdaq Hearings Panel. If UBPS is not successful or does not appeal the decision, Nasdaq will suspend trading of the Common Stock and file a Form 25-NSE with the SEC.
The letter did not indicate non-compliance with any other listing requirement.
The information in the section of the Proxy Statement entitled "Material Differences in the Rights of UBPS Stockholders Following the Transaction" is incorporated herein by reference.
On December 28, 2012, UBPS filed with the Delaware Secretary of State an Amended and Restated Certificate of Incorporation, a copy of which is attached hereto as Exhibit 3.1 and incorporated herein by reference. In addition, as disclosed in the Proxy Statement, upon consummation of the transactions contemplated by the Acquisition Agreements, UBPS changed its fiscal year end from September 30 to December 31. UBPS will file an Annual Report on Form 10-K covering the transition period.
On December 28, 2012, the Company held a special meeting of its stockholders at which such stockholders voted to adopt the Acquisition Agreements and approve the amendments to the amended and restated certificate of incorporation. The final voting results were as follows:
Proposal to Adopt the Jet Pay Agreement:
For Against Abstain/Withhold
Number of votes 12,025,077 439,308 481,567
Percentage of shares outstanding and entitled
to vote 92.89 % 3.39 % 3.72 %
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Proposal to Adopt the ADC Agreement:
For Against Abstain/Withhold
Number of votes 12,025,077 439,308 481,567
Percentage of shares outstanding and entitled
to vote 92.89 % 3.39 % 3.72 %
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Proposal to Amend the Charter to Allow the Board to Set the Size of the Board:
For Against Abstain/Withhold
Number of votes 10,193,177 439,308 2,313,467
Percentage of shares outstanding and entitled
to vote 78.74 % 3.39 % 17.87%
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Proposal to Amend the Charter to Remove Provisions Only Applicable to Special
Purchase Acquisition Corporations:
For Against Abstain/Withhold
Number of votes 9,293,277 1,335,208 2,317,467
Percentage of shares outstanding and entitled
to vote 71.79 % 10.31 % 17.90%
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Proposal to Amend the Charter to Provide for a Classified Board:
For Against Abstain/Withhold
Number of votes 10,189,177 443,308 2,313,467
Percentage of shares outstanding and entitled
to vote 78.71 % 3.42 % 17.87%
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Proposal to Amend the Charter to Require 66.67% Majority to Amend the Charter or
Bylaws:
For Against Abstain/Withhold
Number of votes 9,293,277 1,339,208 2,313,467
Percentage of shares outstanding and entitled
to vote 71.79 % 10.34 % 17.87%
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Proposal to Amend the Charter to Make the Company's Existence Perpetual:
For Against Abstain/Withhold
Number of votes 9,295,277 1,337,208 2,313,467
Percentage of shares outstanding and entitled
to vote 71.80 % 10.33 % 17.87%
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Proposal to Amend the Charter to Make other Changes:
For Against Abstain/Withhold
Number of votes 9,291,277 1,341,208 2,313,467
Percentage of shares outstanding and entitled
to vote 71.77 % 10.36 % 17.87%
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(a) Financial Statements of Businesses Acquired
The information contained in Section 2.01 above is incorporated herein by reference.
(c) Pro Forma Financial Information
UNIVERSAL BUSINESS PAYMENTS SOLUTIONS ACQUISITION CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
September 30, 2012
Combined
Following
Combined Before Pro Forma Redemption of
Acquisition Acquisition 9,994,625
UBPS JetPay The ADC Entities Adjustments Adjustments Note # Shares
Assets
Current assets
Cash and cash equivalents $ 23,692 $ 690,977 $ 2,221,128 $ 2,935,797 $ 68,811,113 A $ 2,574,699
(60,763,730 ) A
(1,059,620 ) C
(335,000 ) D
(25,991,361 ) E
9,000,000 E
10,000,000 E
(22,500 ) E
Restricted Cash - 101,972 41,525,520 41,627,492 41,627,492
Accounts receivable, trade - 1,805,000 1,584,184 3,389,184 3,389,184
Accounts receivable, related
parties - 75,000 - 75,000 75,000
Inventory - - 128,147 128,147 128,147
Prepaid expenses and other current
assets - 19,928 98,564 118,492 118,492
Total current assets 23,692 2,692,877 45,557,543 48,274,112 47,913,014
Property, Plant and equipment - 546,402 588,892 1,135,294 1,135,294
Other assets
Cash and cash equivalents held in
trust 68,811,113 - - 68,811,113 (68,811,113 ) A -
Goodwill - - 14,000 14,000 17,982,730 E 39,967,822
21,971,092 G
Deposits - 2,920,389 - 2,920,389 2,920,389
Deferred financing costs - - - 22,500 E 22,500
Customer relationships and related
covenants - - - 30,945,000 E 30,945,000
Software and technology - - - 6,000,000 E 6,000,000
Other assets - - 33,361 33,361 33,361
Total other assets 68,811,113 2,920,389 47,361 71,778,863 79,889,072
Total assets $ 68,834,805 $ 6,159,668 $ 46,193,796 $ 121,188,269 $ $ 128,937,380
Liabilities and Stockholders'
Equity
Current Liabilities
Note payable, current maturities $ 335,000 $ 374,150 $ - $ 709,150 $ (335,000 ) D $ 352,555
(21,595 ) E
Accounts payable 257,873 883,117 106,716 1,247,706 (125,000 ) C 3,317,706
2,195,000 C
Payroll taxes payable - - 43,020,659 43,020,659 43,020,659
Accrued expenses - 1,019,621 296,555 1,316,176 1,316,176
Other current liabilities - - 2,276 2,276 2,276
Total current liabilities 592,873 2,276,888 43,426,206 46,295,967 48,009,372
Bank loans payable 9,000,000 E 9,000,000
Note payable - long term - 7,510,316 - 7,510,316 10,000,000 E 17,957,489
447,173 E
ISO reserves - 124,177 - 124,177 124,177
Payable to sellers - - - 2,000,000 E 2,000,000
Long-term deferred tax liability - - - 21,971,092 G 21,971,092
Due to stockholders - - 30,000 30,000 (30,000 ) E -
Total liabilities 592,873 9,911,381 43,456,206 53,960,460 99,062,130
Commitments and contingencies
Common stock subject to possible
redemption, 63,776,921 - - 63,776,921 (60,763,730 ) A
10,494,067 shares at September 30,
2012 at redemption value (3,013,191 ) B
Stockholders' Equity
Common stock, $0.01 par value.
Authorized 3,826 - 8,974 12,800 500 B 11,519
100,000,000 shares. Issued and
outstanding 4,666 E
at September 30, 2012 - 11,519,094
shares after (8,974 ) E
redemption of 9,994,625 Public
Shares. 2,527 E
Additional paid-in capital 5,165,954 - 37,853 5,203,807 3,012,691 B 33,698,120
25,522,002 E
(37,853 ) E
(2,527 ) E
Retained Earnings (704,769 ) (3,751,713 ) 2,635,654 (1,820,828 ) 1,116,059 E (3,834,389 )
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