Item 1.01 Entry Into Material Definitive Agreement.
On January 30, 2023 Vado Corp. (the "Company") entered into a Share Exchange
Agreement (the "Exchange Agreement") with Socialcom, Inc, d/b/a AudienceX, a
California corporation ("AX") and the shareholders of AX signatory thereto who
collectively own 19,363,959 shares of AX common stock, or approximately 96.6% of
the outstanding shares of AX common stock. On February 17, 2023, the parties
amended and restated the Exchange Agreement. The Exchange Agreement as amended
and restated provides that, upon the terms and subject to the conditions set
forth therein, the Company will issue the AX shareholders signatory thereto a
total of 169,434,641 shares of the Company's common stock, representing
approximately 96% of the shares of the Company's common stock to be outstanding
after giving effect to such issuance, in exchange for all of the shares of AX
common stock held by such AX shareholders (the "Exchange"). The closing of the
Exchange (the "Closing") is conditioned upon AX shareholders collectively owning
at least 19,363,959 shares of AX common stock executing the Exchange Agreement.
Under the Exchange Agreement, in connection with and subject to the Exchange,
the Company agreed, among other things, to the following covenants and closing
conditions: (i) enter into an agreement with David Lelong, the sole officer and
director and majority shareholder of the Company, for the cancellation of 93
million shares of common stock held by him at the Closing, (ii) issue 22,793,540
options to purchase common stock of the Company to AX directors, officers,
employees and consultants under a newly adopted equity incentive plan of the
Company in exchange for the cancellation of 2,604,976 outstanding AX stock
options held by such persons, and (iii) execute a binding agreement for a
financing resulting in gross proceeds to the Company of $1,500,000. In the
furtherance of the foregoing, Mr. Lelong, in his capacity as the sole member of
the Board of Directors and majority shareholder of the Company, approved and
adopted the 2023 Equity Incentive Plan of the Company, under which the Company
is authorized to grant and issue up to 30 million shares of common stock and
common stock equivalents to the Company's directors, officers, employees and
consultants for services rendered or to be rendered by such persons.
In addition, on January 30, 2023 in connection with the Exchange Agreement, the
Company entered into a Stock Purchase Agreement (the "SPA") and an Investor
Rights Agreement ("IRA") with an accredited investor (the "Investor"), which is
also an AX shareholder, and amended and restated those agreements on February
17, 2023, pursuant to which the Company agreed to sell the Investor up to 50,000
shares of the Company's Series A Convertible Preferred Stock (the "Series A"),
which subject to beneficial ownership limitations is convertible into up to
1,000,000 shares of the Company's common stock, at a purchase price of $30 per
share of Series A in two equal tranches, with the first tranche closing
simultaneously with the Closing of the Exchange and the second tranche closing
on the 90th day after the Closing. Under the IRA the Company agreed to register
for resale by the Investor the shares of the Company's common stock issued or
issuable to the Investor under the Series A and the Exchange Agreement on a
registration statement to be filed with the Securities and Exchange Commission
(the "SEC"). Under the IRA, at any time after 180 days following the Closing,
the Investor may request the Company to prepare a registration statement on Form
S-1 (or Form S-3, if available to the Company at such time) and the Company will
be obligated to file such registration statement with the SEC within 120 days
after such request, and to use its commercially reasonable efforts to cause the
registration statement to be declared effective by the SEC as soon as
practicable thereafter, subject to certain exceptions and limitations.
Subject to the terms of the Exchange Agreement, the Closing of the Exchange is
scheduled to take place on or before February 24, 2023, subject to the
satisfaction or waiver of the conditions to Closing set forth in the Exchange
Agreement. If the conditions to Closing have not been satisfied by that
deadline, the Company and AX may extend the Closing to a later date by mutual
agreement. Effective at the Closing, the number of directors of the Company will
be fixed at three, and Jason Wulfsohn and Reeve Benaron will be appointed to
serve on the Board of Directors. Upon or immediately prior to the Closing, David
Lelong shall have tendered his resignation as the sole officer of the Company,
and the Company's Board of Directors will appoint Jason Wulfsohn and Ryan
Carhart as the Company's Chief Executive Officer and Chief Financial Officer,
respectively, effective upon the Closing. Immediately following the Closing, the
AX shareholders who executed the Exchange Agreement as of that time will
collectively own approximately 96% of the issued and outstanding shares of the
Company's common stock, and AX will continue as a subsidiary of the Company. AX
is a digital marketing and services company focused on delivering integrated
advertising and technology performance solutions to independent agencies and
brands through its omnichannel trading desk platform. However, there is no
assurance the Closing will occur.
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The Exchange Agreement contains customary representations and warranties,
customary covenants and conditions to Closing and additional conditions to
Closing including as described above and as more particularly set forth therein.
The foregoing description of the Exchange Agreement, the SPA, the IRA, the Plan
and the transactions contemplated thereby, does not purport to be complete and
is qualified in its entirety by reference to the full text of such document,
forms of which are filed as Exhibits 10.1 through 10.4, respectively, of this
Current Report on Form 8-K.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On February 21, 2023, the Company filed a Certificate of Amendment to the
Certificate of Designations of the Series A with the Secretary of State of the
State of Nevada, which amended the Series A by: (i) providing the holders with
senior ranking with respect to the Company's capital stock upon the occurrence
of a liquidation, dissolution or winding up, (ii) providing the holders with a
liquidation preference in the event of the merger or consolidation of the
Company in which the Company is not the surviving entity, the sale of all of the
assets of the Company in a transaction which requires shareholder approval or
the dissolution or winding up of the Company, and (iii) clarifying the
adjustment provisions of the conversion ratio of the Series A upon the
occurrence of certain corporate events. A copy of the amendment is filed as
Exhibit 4.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
4.1 Certificate of Amendment to Certificate of Designations of Series A
Convertible Preferred Stock
10.1 Form of Share Exchange Agreement*
10.2 Form of Stock Purchase Agreement*
10.3 Form of Investor Rights Agreement*
10.4 Vado Corp. 2023 Equity Incentive Plan
104 Cover Page Interactive Data File (formatted as Inline XBRL and
contained in Exhibit 101)
* Certain schedules and exhibits to this agreement have been omitted in
accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule
and/or exhibit will be furnished to the Securities and Exchange Commission upon
request.
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