Item 2.01
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Completion of Acquisition or Disposition
of Assets.
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Closing
of Ursa Major Acquisition
On
February 1, 2019, EVO Transportation & Energy Services, Inc., a Delaware corporation (the “Company”), EVO Merger
Sub, Inc. (“Merger Sub”), Ursa Major Corporation, a Wisconsin corporation (“Ursa”), John Lampsa, and Ursula
Lampsa (the “Lampsas”) consummated the transactions contemplated by that certain Agreement and Plan of Merger dated
December 15, 2018 (the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub merged with and into Ursa,
Ursa became a wholly-owned subsidiary of the Company, and the Company issued 800,000 shares of Company common stock to the Lampsas.
Prior
to closing the transactions contemplated by the Merger Agreement, on February 1, 2019, the parties to the Merger Agreement entered
into an amendment to the Merger Agreement, which amendment deleted the working capital provisions of the Merger Agreement and
added a representation by the Lampsas regarding the amount of cash and cash equivalents held by Ursa prior to closing.
Closing
of J.B. Lease Acquisition
On
February 1, 2019, EVO Equipment Leasing, LLC, a wholly-owned subsidiary of the Company (“EVO Equipment”), J.B. Lease
Corporation, a Wisconsin corporation (“JB Lease”), and the Lampsas consummated the transactions contemplated by that
certain Stock Purchase Agreement dated December 15, 2018 (the “Stock Purchase Agreement”). Pursuant to the Stock Purchase
Agreement, EVO Equipment acquired all of the capital stock of JB Lease (the “JB Lease Shares”) and JB Lease became
a wholly-owned subsidiary of EVO Equipment.
Prior
to closing the transactions contemplated by the Stock Purchase Agreement, on February 1, 2019, the parties to the Stock Purchase
Agreement entered into an amendment to the Stock Purchase Agreement, which amendment: (i) added indemnification by EVO Equipment
for any personal guarantees of the Lampsas not released at closing; (ii) added a waiver by the Lampsas of the closing condition
that their personal guarantees be released at or prior to closing, and (iii) altered certain terms of the note to be issued to
the Lampsas at closing.
As
consideration for the JB Lease Shares, EVO Equipment paid the Lampsas $2,500,000, assumed approximately $12,000,000 in existing
JB Lease indebtedness, and issued a promissory note in the principal amount of $6,430,000 to the Lampsas (the “JB Lease
Note”). The JB Lease Note is interest-free until June 1, 2019 and is secured by 100% of the equity in Ursa and JB Lease.
Beginning June 1, 2019, the JB Lease Note provides for monthly principal and interest payments of $50,000 and bears interest at
a rate of 9% per annum, which interest is payable monthly in advance beginning June 1, 2019.
The
Merger Agreement and Stock Purchase Agreement are described more fully in the Company’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on December 20, 2018. The descriptions set forth above of the amendment to the Merger
Agreement, the amendment to the Stock Purchase Agreement, and the JB Lease Note are not complete and are subject to and qualified
in their entirety by reference to the text of the amendments and the JB Lease Note, copies of which are filed herewith as Exhibit
2.1, 2.2, and 10.1 and the terms of which are incorporated by reference.
John
Lampsa Employment Agreement
On
February 1, 2019, Ursa entered into an employment agreement (the “Lampsa Employment Agreement”) with John Lampsa pursuant
to which John Lampsa will serve as the chief executive officer of Ursa. The Lampsa Employment Agreement provides for an initial
term of one year, with automatic extensions (absent notice to the contrary) of one year upon the expiration of the initial term
or any renewal term. Under the Lampsa Employment Agreement, John Lampsa will be entitled to base compensation of $275,000
per year, incentive compensation based on his performance as determined by the Company’s board of directors and awards
of stock options pursuant to any plans or arrangements the Company may have in effect from time to time.
If
John Lampsa is terminated without cause or he resigns with good reason, he will be entitled to receive severance, subject to his
execution and non-revocation of a release of claims in favor of the Company and its officers, directors and affiliates, equal
to any unpaid base salary, reimbursement for unpaid expenses and all other accrued payments or benefits through his termination
date, plus the greater of: (1) his monthly base salary at the level in effect immediately prior to his termination date,
multiplied by number of full or partial months, if any, in the period beginning on his termination date and ending on the date
his initial employment term would have ended, if later than his termination date or (2) one-half of his annual base salary at
the level in effect immediately prior to his termination date.
The
Lampsa Employment Agreement also includes a customary confidentiality covenant and one-year post-termination nonsolicitation and
non-interference covenants.
The
description set forth above of the Lampsa Employment Agreement is not complete and is subject to and qualified in its entirety
by reference to the text of the Lampsa Employment Agreement, a copy of which is filed herewith as Exhibit 10.2 and the terms of
which are incorporated by reference.