Business Context and Reporting Period
This Form 8-K was filed by PeerStream, Inc. on February 21, 2020. The filing reports the entry into a Material Definitive Agreement regarding the sale of substantially all assets related to the Company's secure communications business.
Key Financial Metrics
The filing does not provide standard financial statements (revenue, profit, cash flow, margins, debt, or liquidity) for the reporting period. The primary financial data disclosed relates to the proposed asset sale:
- Base Purchase Price: $500,000 in cash.
- Total Consideration: Approximately $540,000, inclusive of the base price plus reimbursement or waiver of severance expenses for certain former executive officers.
- Transition Service Fee: 5% of all revenue received by the Buyer or its affiliates from certain unassignable contracts.
Material Changes and Transaction Details
On February 21, 2020, PeerStream, Inc. entered into an Asset Purchase Agreement with SecureCo, LLC. The transaction involves the sale of assets related to secure messaging, data applications, software, and middleware for enterprise and government clients. The Company granted the Buyer a non-exclusive license to certain software. The agreement includes customary provisions for indemnification, non-competition, non-solicitation, non-disparagement, and confidentiality.
Outlook, Risks, and Contingencies
The closing of the transaction is contingent upon the Buyer securing sufficient financing to fund the purchase price. The agreement may be terminated by mutual consent, due to uncured material breaches, or if conditions are not met by April 15, 2020. The deadline may be extended to May 31, 2020, provided the purchase price increases by $2,000 per business day for every day past April 15, 2020.
Key Facts for Investor Verification
- Verify whether the Buyer (SecureCo, LLC) has secured the financing required to close the transaction.
- Confirm if the transaction closes by the April 15, 2020 deadline or if the extension clause with the increased purchase price is triggered.
- Assess the impact of selling substantially all assets on the Company's future operations and remaining business model.
- Review the specific scope of the "unassignable contracts" to estimate potential future transition service fee revenue.