Professional Diversity Network, Inc. (NASDAQ:IPDN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement
On January 13, 2017, Professional Diversity Network, Inc., a
Delaware corporation (PDN), entered into a stock purchase
agreement dated as of January 13, 2017 (the Purchase Agreement),
with Cosmic Forward Limited, a Republic of Seychelles company and
controlling stockholder of PDN (CFL). to the Purchase Agreement,
PDN agreed to issue and sell to CFL (the Share Issuance), and CFL
agreed to purchase, at a price of $9.60 per share (the Per Share
Price), upon the terms and subject to the conditions set forth in
the Purchase Agreement, 312,500 shares of PDNs common stock, par
value $0.01 per share (the Common Stock). The Per Share Price
represents an approximately 3.1% premium to the $9.31 closing
consolidated bid price of the Common Stock on January 12, 2017.
On January 18, 2017, PDN consummated the Share Issuance. As a
result of the completion of the Share Issuance, as of January 18,
2017, CFL beneficially owned 54.64% of PDNs outstanding shares of
Common Stock, on a fully diluted basis.
PDN received total gross proceeds of $3.0 million from the Share
Issuance and approximately $2.8 million in net proceeds from the
Share Issuance, after payment of transaction-related expenses.
At the closing of the Share Issuance, and as contemplated by the
Purchase Agreement, PDN entered into an amendment, dated as of
January 18, 2017 (the Amendment), to the Stockholders Agreement,
dated as of November 7, 2016 (the Stockholders Agreement), with
CFL and each of its shareholders: Maoji (Michael) Wang, Jing Bo
Song, Yong Xiong Zheng and Nan Nan Kou (the CFL Shareholders).
Mr. Wang is a director and the Chief Executive Officer of PDN,
and Mr. Song is Co-Chairman of the Board of Directors of PDN.
The Amendment increased the cap on the amount of Common Stock
that the CFL Shareholders and their respective controlled
affiliates (collectively, the CFL Group) may, directly or
indirectly acquire, agree to acquire or publicly propose or offer
to acquire from PDN, or to a tender or exchange offer for any
shares of Common Stock, from 51% of the then outstanding shares
of Common Stock, on a fully-diluted basis, to 54.64% of the then
outstanding shares of Common Stock, on a fully-diluted basis. The
Amendment also clarifies that the 312,500 shares of Common Stock
purchased by CFL in the Share Issuance are subject to all of the
restrictions contained in the Stockholders Agreement, as amended.
All other terms and conditions of the Stockholders Agreement
remain in full force and effect and were ratified and affirmed by
the parties in the Amendment.
PDN retained Aegis Capital Corp. (Aegis) as the exclusive
placement agent in connection with the transaction. Aegis
received a cash placement fee of $144,000 in connection with the
transaction.
The foregoing descriptions of the terms of the Purchase Agreement
and the Amendment to the Stockholders Agreement are summaries
only and do not purport to be a complete description of all of
the terms, provisions, covenants, and agreements contained in the
Purchase Agreement and the Amendment to the Stockholders
Agreement, and are subject to and qualified in their entirety by
reference to the Purchase Agreement attached as Exhibit 10.1 to
this Current Report on Form 8-K, and the Amendment to the
Stockholders Agreement attached as Exhibit 10.2 to this Current
Report on Form 8-K.
Item 3.02. Unregistered Sales of Equity Securities
The description of the Share Issuance set forth in Item 1.01 of
this Current Report on Form 8-K is incorporated by reference in
its entirety in this Item 3.02.
The shares of Common Stock issued to CFL in the Share Issuance
were issued to CFL without registration under the Securities Act
of 1933, as amended (the Securities Act), in reliance upon the
exemption from the registration requirements of the Securities
Act afforded by Section 4(a)(2) of the Securities Act and Rule
506(b) of Regulation D promulgated under the Securities Act as a
transaction by an issuer not involving any public offering. In
determining that the foregoing exemptions are applicable to the
Share Issuance to the Purchase Agreement, PDN relied on, among
other things, CFLs representation contained in the Purchase
Agreement that it is acquiring the shares of Common Stock for its
own account and not with a view towards, or for resale in
connection with, any public sale or distribution thereof in
violation of applicable securities laws. All certificates
representing such shares of Common Stock will bear an appropriate
restrictive legend indicating that such shares are subject to
restrictions on transfer to the Stockholders Agreement, as
amended, and that such shares are not being issued in a
transaction registered under the Securities Act and therefore are
subject to restrictions on transfer imposed under U.S. federal
and state securities or blue sky laws.
Item 8.01. Other Events.
On January 17, 2017, PDN issued a press release announcing the
execution of the Purchase Agreement. On January 19, 2017, PDN
issued a press release announcing the consummation of the
transactions contemplated by the Purchase Agreement. A copy of
PDNs press releases announcing the execution of the Purchase
Agreement and the consummation of the transactions contemplated
by the Purchase Agreement are attached as Exhibit 99.1 and
Exhibit 99.2, respectively, to this Current Report on Form 8-K
and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
10.1
Stock Purchase Agreement, dated as of January 13, 2017,
by and between Professional Diversity Network, Inc. and
Cosmic Forward Limited.
10.2
Amendment dated as of January 18, 2017 to Stockholders
Agreement, dated as of November 7, 2016, by and among
PDN, CFL, Maoji (Michael) Wang, Jing Bo Song, Yong Xiong
Zheng and Nan Nan Kou.
99.1
Press Release issued January 17, 2017, announcing the
execution of the Purchase Agreement.
99.2
Press Release issued January 19, 2017, announcing the
consummation of the transactions contemplated by the
Purchase Agreement.
About Professional Diversity Network, Inc. (NASDAQ:IPDN)
Professional Diversity Network, Inc. is an operator of professional networks with a focus on diversity. The Company serves various communities, including Women, Hispanic-Americans, African-Americans, Asian-Americans, Disabled, Military Professionals, and Lesbian, Gay, Bisexual and Transgender (LGBT). The Company’s segments include Professional Diversity Network (PDN Network), which includes online professional networking communities with career resources for the needs of various diverse cultural groups; National Association of Professional Women (NAPW Network), a women-only professional networking organization, and Noble Voice operations (Noble Voice), a career consultation and lead generation service. The Noble Voice call centers qualify callers for real-time job placement. The PDN Network consists of various online professional networking communities dedicated to serving diverse professionals in the United States and employers seeking to hire diverse talent. Professional Diversity Network, Inc. (NASDAQ:IPDN) Recent Trading Information
Professional Diversity Network, Inc. (NASDAQ:IPDN) closed its last trading session up +0.44 at 10.00 with 10,391 shares trading hands.
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