UPEXI, Inc. — Form 8-K Summary
Filing date: October 21, 2021; reported event: October 19, 2021. The filing identifies the registrant as Grove, Inc.; the request metadata identifies UPEXI, Inc. The company completed the acquisition of Interactive Offers, LLC, a programmatic advertising software-as-a-service business.
Transaction and Key Financial Terms
- Grove acquired all outstanding membership interests of Interactive Offers, LLC from Gyprock Holdings LLC, MFA Holdings Corp., and Sherwood Ventures, LLC.
- Total stated purchase price was $6.1 million, consisting of 666,667 shares of Grove common stock and $2.1 million in cash.
- The purchase price is subject to reduction if Interactive’s closing net working capital is below $100,000.
- Sellers may receive up to an additional $600,000 cash earnout based on specified revenue milestones.
- The issued shares are subject to a 12-month transfer restriction beginning on the closing date.
- The acquisition closed on October 19, 2021.
Business, Management and Employment Arrangements
Interactive operates a programmatic advertising SaaS platform that enables automated advertising placement on partner websites through a dashboard.
Interactive entered into one-year minimum-term employment agreements with Rafael Pereira, Joseph Lombas, and Wesley DeSouza. Each executive is entitled to a monthly salary of $12,500, subject to certain adjustments. The agreements include severance provisions, confidentiality, work-product, non-competition, and non-solicitation restrictions.
Material Changes, Financial Metrics and Liquidity
- The filing does not provide revenue, profit, cash flow, margin, debt, liquidity, or operating results for Interactive or the combined company.
- No comparable-period financial information or quantified post-acquisition guidance is provided.
- Audited financial statements for the acquired business and pro forma financial information were to be filed by amendment within 71 calendar days after the Form 8-K filing deadline.
Related-Party Considerations, Risks and Unusual Items
- Grove’s CEO and chairman, Allan Marshall, is the controlling stockholder and president of MFA Holdings Corp., which owned 20% of Interactive. This represents a significant potential related-party consideration in the acquisition.
- The transaction creates dilution through the issuance of 666,667 common shares and requires a $2.1 million cash payment, with potential additional cash consideration of up to $600,000.
- Final consideration may change based on closing net working capital and achievement of revenue milestones.
- The filing cautions that representations and warranties in the purchase agreement were made for contractual risk-allocation purposes and should not be treated as independent factual or financial disclosures.
- The filing does not provide acquisition accounting, valuation methodology, expected synergies, integration costs, or an outlook for Interactive’s contribution to future results.
Investor Verification Checklist
- Verify the amended filing containing Interactive’s audited financial statements and pro forma financial information.
- Review the purchase agreement for the net working capital adjustment, earnout milestones, closing conditions, indemnification provisions, and related-party disclosures.
- Assess the dilution and cash impact of the acquisition, including the potential $600,000 earnout.
- Evaluate Interactive’s historical revenue, profitability, customer concentration, retention, and dependence on advertising partners.
- Confirm the status of the executive employment agreements and any severance obligations.