ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On November 7, 2019, Qumu
Corporation (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with Craig-Hallum
Capital Group LLC, as representative and underwriter (the “Underwriter”) relating to the underwritten public offering
(the “Offering”) of 3,175,652 shares (the “Shares”) of the Company’s common stock, par value $0.01
per share (the “Common Stock”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell the Shares
to the Underwriter at a price of $2.325 per share. The price to the public in the Offering was $2.50 per Share. In addition, under
the terms of the Purchase Agreement, the Company granted the Underwriter an option, exercisable for a period of 30 days after
November 7, 2019, to purchase up to 476,348 additional shares of Common Stock to cover over-allotments, if any, on the same terms
and conditions. On November 7, 2019, the Underwriter exercised in full its option to purchase the additional 476,348 shares
of Common Stock.
The net proceeds to the Company from the Offering
of the 3,652,000 shares of Common Stock are expected to be approximately $8.2 million, after deducting underwriting discounts
and commissions and other estimated offering expenses payable by the Company. The Offering is scheduled to close on or about November
12, 2019, subject to the satisfaction of customary closing conditions. The Company intends to use approximately $4.5 million
of the net proceeds from the Offering to repay the outstanding principal and accrued interest under its term loan credit
agreement with ESW Holdings, Inc., and the remaining net proceeds from the Offering for working capital and general corporate
purposes.
The
Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing,
indemnification obligations of the Company and the Underwriter, including for liabilities under the Securities Act of 1933, as
amended, other obligations of the parties and termination provisions.
Pursuant
to the terms of the Purchase Agreement and related lock-up agreements attached as Exhibit A to the Purchase Agreement (the “Lock-up
Agreements”), the Company, all of its directors and executive officers, and Harbert Discovery Fund LP, a significant
shareholder of the Company, also agreed not to sell or transfer any shares of Common Stock held or later acquired by them
for a period of 90 days after November 7, 2019, without first obtaining the written consent of the Underwriter, subject to certain
exceptions, extensions and terms as set forth in the Purchase Agreement and the Lock-up Agreements.
The
Offering was made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-233470) declared effective
by the Securities and Exchange Commission on September 5, 2019 and a related prospectus supplement and accompanying prospectus.
The
Purchase Agreement is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing
description of the terms of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference
to such exhibit.
A
copy of the opinion of Ballard Spahr LLP relating to the legality of the issuance and sale of the shares of Common Stock in the
Offering is attached as Exhibit 5.1 hereto.