PARSEC CAPITAL ACQUISITIONS CORP Item 1.01 Entry into a Material Definitive Agreement
Merger Agreement
On
The Merger is expected to be consummated in the fourth quarter of 2022, following the receipt of the required approval by the shareholders of PCX and the shareholder of Enteractive Media and the satisfaction of certain other customary closing conditions.
Merger Consideration
The total consideration to be paid at Closing (the "Merger Consideration") by
PCX to the Enteractive Media shareholders will be Five Million (5,000,000)
shares of Class A common stock, par value
At the signing of the Merger Agreement, the authorized capital stock of
Enteractive Media consists of an unlimited number of Company Class A Shares and
an unlimited number of Company Class
Representations and Warranties
The Merger Agreement contains customary representations and warranties of Enteractive Media with respect to, among other things: (i) corporate existence and power; (ii) organizational documents; (iii) capitalization; (iv) authorization to enter into the Merger Agreement and related transactions; (v) no conflicts and non-contravention; (vi) permits and compliance; (vii) financial statements; (viii) no undisclosed liabilities; (ix) absence of certain changes; (x) absence of litigation; (xi) employee benefit plans; (xii) labor matters; (xiii) real property and title to assets; (xiv) intellectual property; (xv) taxes; (xvi) environmental matters; (xvii) material contracts; (xviii) customers and suppliers; (xix) insurance; (xx) internal controls; (xxi) accuracy of statements; (xxii) COVID-19 matters; (xxiii) delivery of support agreement; (xxiv) board approval; (xv) brokers and finders' fees; (xvi) takeover laws; (xxvii) international trade matters and anti-bribery compliance; (xxix) that Enteractive Media is not an investment company; (xxx) withholding; (xxxi) exclusivity of representations and warranties; and (xxxii) full disclosure.
The Merger Agreement contains customary representations and warranties of the PCX Parties with respect to, among other things: (i) corporate existence and power; (ii) organizational documents; (iii) capitalization; (iv) authorization to enter into the Merger Agreement and related transactions; (v) no conflicts and non-contravention; (vi) compliance; (viii) PCX publicly filed documents and financial statements; (viii) absence of certain changes; (ix) absence of litigation; (x) board approval; (xi) no prior operations of Merger Sub; (xii) amount in the trust account; (xii) employees; (xiv) taxes; (xv) listing of PCX securities; (xvi) that PCX is not an investment company; (xvii) statements in public filings; (xviii) contracts; (xix) brokers and finders' fees; (xx) delivery of support agreement; and (xxi) investigation and reliance.
All representations and warranties by all parties shall terminate upon the Effective Time, and no representations, warranties, covenants, obligations or other agreements contained in the Merger Agreement shall survive the Effective Time.
Covenants
The Merger Agreement includes customary covenants of the parties with respect to operation of their respective businesses prior to consummation of the Merger and efforts to satisfy conditions to consummation of the Merger. The Merger Agreement also contains additional covenants of the parties, including, among others, access to information, cooperation in the preparation of the Registration Statement on Form S-4 (the "Registration Statement") and Proxy Statement (as each such term is defined in the Merger Agreement) required to be filed in connection with the Merger and to obtain all requisite approvals of PCX's shareholders. PCX has also agreed to include in the Proxy Statement the recommendation of its board that its shareholders approve all of the proposals to be presented at the special meeting of PCX's shareholders that will be called in order to approve the Merger and related transactions (the "PCX Special Meeting").
Conduct between Signing and Closing
Each of PCX, Merger Sub and Enteractive Media has agreed that from the date of the Merger Agreement until the Closing Date or, if earlier, the valid termination of the Merger Agreement in accordance with its terms, it will not initiate, encourage or engage in any negotiations with any party relating to an alternative transaction, take any action intended to facilitate an alternative transaction or approve, recommend or enter into any agreement relating to an alternative transaction. PCX and Enteractive Media also have agreed to operate their respective companies in the ordinary course through the Closing Date.
Conditions to Closing
The consummation of the Merger is conditioned upon, among other things, (i) the absence of any applicable law or order that makes the transactions contemplated by the Merger Agreement illegal or otherwise prohibits consummation of such transactions; (ii) the Registration Statement shall have become effective under the Securities Act of 1933, as amended (the "Securities Act"); (iii) approval by PCX's shareholders of the Merger and related transactions; (iv) approval by Enteractive Media's shareholders of the Merger and related transactions; (v) the aggregate cash available to PCX at the Closing (after giving effect to any redemptions by PCX's shareholders and the payment of all authorized transaction expenses) being at least Six Million ($6,000,000) dollars; (vi) all Ancillary Agreements shall have been executed by all parties thereto; and (vii) all required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and with any other governmental authority shall have been completed and cleared.
Solely with respect to the PCX Parties, the consummation of the Merger is
conditioned upon, among other things: (i) Enteractive Media having duly
performed or complied with all of its obligations under the Merger Agreement in
all material respects; (ii) the representations and warranties of Enteractive
Media being true and correct in all material respects; (iii) no event having
occurred that would result in a Company Material Adverse Effect (as defined in
the Merger Agreement); (iv) Enteractive Media providing PCX a certificate from
an authorized officer of Enteractive Media as to the accuracy of the foregoing
conditions; (v) after giving effect to the Merger, PCX shall have at least
Solely with respect to Enteractive Media, the consummation of the Merger is conditioned upon, among other things: (i) the PCX Parties having duly performed or complied with all of their obligations under the Merger Agreement in all material respects; (ii) the representations and warranties of the PCX Parties being true and correct in all material respects; (iii) no event having occurred that would result in an PCX Material Adverse Effect (as defined in the Merger Agreement; and (iv) each of the PCX Parties providing Enteractive Media a certificate from an authorized officer as to the accuracy of the foregoing conditions.
Termination
The Merger Agreement may be terminated as follows:
(i) By the mutual consent of PCX and Enteractive Media;
(ii) by PCX, if any of the representations or warranties of Enteractive Media
set forth in the Merger Agreement shall not be true and correct, or if
Enteractive Media has failed to perform any covenant or agreement set
forth in the Merger Agreement (including an obligation to consummate the
Merger), in each case such that the conditions to closing would not be
. . .
Item 7.01 Regulation FD Disclosure
On
The information in this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Important Information and Where to Find It
In connection with the Merger Agreement and transactions contemplated thereby,
PCX intends to file relevant materials with the
Participants in the Solicitation
PCX and its directors and executive officers may be deemed participants in the
solicitation of proxies from PCX's shareholders with respect to the proposed
business combination. A list of the names of those directors and executive
officers and a description of their interests in PCX will be included in the
proxy statement/prospectus for the proposed business combination and be
available at www.sec.gov. Additional information regarding the interests of such
participants will be contained in the proxy statement/prospectus for the
proposed business combination when available. Information about PCX's directors
and executive officers and their ownership of PCX Common Stock is set forth in
PCX's prospectus, dated
Enteractive Media and its directors and executive officers also may be deemed to be participants in the solicitation of proxies from the shareholders of PCX in connection with the proposed business combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed business combination will be included in the proxy statement/prospectus for the proposed business combination.
Forward-Looking Statements
This Current Report on Form 8-K and the documents incorporated by reference
herein (this "Current Report") contain certain "forward-looking statements"
within the meaning of "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, as amended. Forward-looking statements can be
identified by words such as: "target," "believe," "expect," "will," "shall,"
"may," "anticipate," "estimate," "would," "positioned," "future," "forecast,"
"intend," "plan," "project" and other similar expressions that predict or
indicate future events or trends or that are not statements of historical
matters. Examples of forward-looking statements include, among others,
statements made in this Current Report regarding the proposed transactions
contemplated by the Merger Agreement, including the benefits of the Merger,
integration plans, expected synergies and revenue opportunities, anticipated
future financial and operating performance and results, including estimates for
growth, the expected management and governance of the combined company, and the
expected timing of the Merger. Forward-looking statements are neither historical
facts nor assurances of future performance. Instead, they are based only on
PCX's and Enteractive Media's managements' current beliefs, expectations and
assumptions. Because forward-looking statements relate to the future, they are
subject to inherent uncertainties, risks and changes in circumstances that are
difficult to predict and many of which are outside of our control. Actual
results and outcomes may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any of these
forward-looking statements. Important factors that could cause actual results
and outcomes to differ materially from those indicated in the forward-looking
statements include, among others, the following: (1) the occurrence of any
event, change or other circumstances that could give rise to an amendment or
termination of the Merger Agreement and the proposed transaction contemplated
thereby; (2) the inability to complete the transactions contemplated by the
Merger Agreement due to the failure to obtain approval of the shareholders of
PCX or the shareholders of Enteractive Media or other conditions to closing in
the Merger Agreement; (3) the inability to project with any certainty the amount
of cash proceeds remaining in the PCX trust account at the closing of the
transaction; (4) the uncertainty relative to the cash made available to
Enteractive Media at the closing should any material redemption requests be made
by the PCX shareholders (since the sources of cash projected in this press
release assume that no redemptions will be requested by PCX shareholders); (5)
the inability of the company post-closing to obtain or maintain the listing of
its securities on Nasdaq following the business combination; (6) the amount of
costs related to the business combination; (7) Enteractive Media's ability to
yield sufficient cash proceeds from the transaction to support its short-term
operations and research and development efforts since the Merger Agreement
requires no minimum level of funding in the trust account to close the
transaction; (8) the outcome of any legal proceedings that may be instituted
against the parties following the announcement of the business combination;
changes in applicable laws or regulations; (9) the ability of Enteractive Media
to meet its post-closing financial and strategic goals, due to, among other
things, competition; (10) the ability of the company post-closing to grow and
manage growth profitability and retain its key employees; (11) the possibility
that the company post-closing may be adversely affected by other economic,
business, and/or competitive factors;(12) risks relating to the successful
retention of Enteractive Media's customers; (13) the potential impact that
COVID-19 may have on Enteractive Media's customers, suppliers, vendors,
regulatory agencies, employees and the global economy as a whole; (14) the
expected duration over which Enteractive Media's balances will fund its
operations; (15) and other risks and uncertainties described herein, as well as
those risks and uncertainties indicated from time to time in the final
prospectus of PCX for its initial public offering dated
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an exemption therefrom.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description 2.1 Merger Agreement dated as ofOctober 13, 2022 by and amongParsec Capital Acquisitions Corp. ,Enteractive Merger Sub, Inc. andEnteractive Media Inc. 10.1 Sponsor Support Agreement dated as ofOctober 13, 2022 , by and amongParsec Capital Acquisitions Corp. andParsec Acquisitions Sponsor, LLC . 10.2 Shareholder Support Agreement dated as ofOctober 13, 2022 , by andParsec Capital Acquisitions Corp. ,Enteractive Media Inc. , and each of the Persons set forth on Schedule I attached thereto. 99.1 Press release datedOctober 18, 2022 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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