Item 1.01 Entry into a Material Definitive Agreement
First Amended and Restated Agreement and Plan of Merger
On December 21, 2018, registrant Fision Corporation, a Delaware corporation (“Fision”) entered into a First Amended and Restated Agreement and Plan of Merger (the “Amended Merger Agreement”), by and among Fision, CLF Merger Sub LLC, a New Jersey limited liability company and wholly owned subsidiary of Fision (“Merger Sub”), and Continuity Logic L.L.C., a New Jersey Limited Liability Company (“Continuity Logic”), which amended the original Agreement and Plan of Merger dated August 3, 2018 (the “Original Merger Agreement”). The Amended Merger Agreement provides for Fision to acquire Continuity Logic through a merger transaction whereby Merger Sub will be with and into Continuity Logic (the “Merger”), whereupon the owners of Continuity Logic will receive shares of common stock of Fision, in addition to warrants, as sole consideration for their ownership of Continuity Logic, and Continuity Logic will become a wholly owned subsidiary of Fision. The Merger is expected to close on or around December 31, 2018, but subject to approval by the members of Continuity Logic LLC.
Pursuant to the Amended Merger Agreement, the pre-merger shareholders of Fision as a group and the pre-merger equity owners of Continuity Logic as a group will each own approximately 50% of the post-merger shares of outstanding common stock of Fision. The Closing Date for the Merger will be as soon as practicable after satisfaction or waiver of all terms and conditions of the First Amendment, although either Fision or Continuity Logic will have the right to terminate the Merger Agreement after December 31, 2018 if it is not completed by that date.
The Amended Merger Agreement contains the following material changes to the Original Merger Agreement:
i)
Options of Continuity Logic
-- Upon effectiveness of the Merger, all outstanding pre-merger options to acquire equity interests of Continuity Logic will be converted into stock options to purchase shares of common stock of Fision pursuant to a formula set forth in the Amended Merger Agreement. Also upon effectiveness of the merger, any unvested options of Continuity Logic shall automatically and immediately become vested. Fision estimates that after conversion, these Continuity Logic options will convert into Fision stock options to purchase a total of approximately no common shares of Fision (the “Merger Options”).
ii)
Conversion of Equity Interests of Continuity Logic
-- Section 1.04 of the Amended Merger Agreement was revised to set forth in more detail the manner of conversion of Continuity Logic equity interests into common shares of Fision. Continuity Logic has two types of holders of membership interests: , Common Unit Holders and Incentive Unit Holders. The terms of conversion of these Common Unit Holders and Incentive Unit Holders into shares of common stock of Fision are included in a set of formulas in Section 1.04(g) of the Amended Merger Agreement.
iii)
Contingent Consideration
-- Section 1.06 of the Amended Merger Agreement provides for additional contingent consideration to be paid to Unit Holders of Continuity Logic in Fision common shares pursuant to a formula set forth in the Amended Merger Agreement based on the number of Merger Options that are unexercised as of their expiration date.
iv)
Change in Management
– Upon effectiveness of the Merger, the Board of Directors of Fision will consist of four directors consisting of Michael Brown and John Bode (current directors of Fision), Laurence Mascera (currently a director of Continuity Logic) and Daniel Dorsey.
The foregoing description of the Amended Merger Agreement is not complete and is qualified in its entirety by the actual terms of the Amended Merger Agreement, a copy of which is attached as an exhibit hereto, and is incorporated herein by reference.
The foregoing description of the Amended Merger Agreement is not complete and is qualified in its entirety by the actual terms of the Amended Merger Agreement, a copy of which is attached as an exhibit hereto, and is incorporated herein by reference.