into a Material Definitive Agreement.
June 11, 2019, TheStreet, Inc., a Delaware corporation (“TheStreet”), TheMaven, Inc., a Delaware corporation (“Parent”),
and TST Acquisition Co., Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), entered
into an Agreement and Plan of Merger (the “Merger Agreement”) providing for the merger of Merger Sub with and into
TheStreet (the “Merger”), with TheStreet surviving the Merger as a wholly owned subsidiary of Parent.
the time of effectiveness of the Merger (the “Effective Time”), each share of common stock, par value $0.01 per share,
of TheStreet (“Company Common Stock”) issued and outstanding immediately prior to the Effective Time (other than shares,
if any, held by TheStreet, Parent or Merger Sub and shares with respect to which appraisal rights have been properly exercised
in accordance with the General Corporation Law of the State of Delaware), after giving effect to the Distribution or the Recapitalization
described below, as the case may be, will automatically be cancelled and converted into the right to receive, (i) an amount in
cash equal to $3.09183364 per share of Company Common Stock and (ii) one contractual contingent value right per share of Company
Common Stock (each, a “CVR”) (collectively, the “Merger Consideration”).
prior to the Effective Time, TheStreet will distribute all of its cash on hand, less certain liabilities and expenses relating
to TheStreet’s prior sales of its RateWatch and its institutional business units (collectively, the “Prior Transactions”)
and the Merger Agreement and the related transactions described in this Item 1.01, either in the form of a cash distribution declared
by the Board of Directors of TheStreet and paid to holders of Company Common Stock (the “Distribution”) or a recapitalization
via an amendment to TheStreet’s certificate of incorporation pursuant to which each outstanding share of Company Common
Stock would be converted into cash and a fraction of a share of Company Common Stock (the “Recapitalization”). Currently,
TheStreet’s management estimates that the amount of cash TheStreet will be able to distribute in the Distribution or the
Recapitalization, as the case may be, will range from approximately $2.44 per share of Company Common Stock to approximately $2.61
per share of Company Common Stock. This estimate reflects management’s estimate of cash to be held by TheStreet assuming
that the Distribution or the Recapitalization, as the case may be, is effectuated on or about July 31, 2019. The actual amount
to be distributed will be affected by TheStreet’s operating results, transaction expenses, the actual timing of the Distribution
or the Recapitalization, as the case may be, and other factors. The effectiveness of the Merger is conditioned upon effectuation
of the Distribution or the Recapitalization, as the case may be.
CVR will entitle the holder thereof to receive a pro rata portion of the funds escrowed in connection with the Prior Transactions
when they are released from the relevant escrows, which are currently scheduled to be released after August 20, 2019, and January
31, 2020, respectively. The terms and conditions of the CVRs will be set forth in a contingent value rights agreement to be entered
into prior to the closing of the Merger among TheStreet, Parent and a rights agent (the “CVR Agreement”). Currently,
TheStreet’s management estimates that the total amounts that will be released from such escrows will range from approximately
$0.66 per share of Company Common Stock to approximately $0.77 per share of Company Common Stock. There can be no assurance that
these escrows will be released in full or at all since the purchasers in the Prior Transactions have certain indemnification rights
under their agreements with TheStreet which may be satisfied through their receipt of all or portions of such escrows. Under the
Merger Agreement, the Board of Directors of TheStreet has the discretion to determine to distribute the CVRs to stockholders as
part of the Distribution or the Recapitalization, as the case may be, in lieu of including the CVRs in the Merger Consideration.
CVRs will not represent any equity or ownership interest in the TheStreet, Parent or any affiliate thereof (or any other person)
and will not be represented by any certificates or other instruments. The CVRs will not have any voting or dividend rights and
no interest will accrue on any amounts payable on the CVRs to any holder thereof. The CVRs may not be sold, assigned, transferred,
pledged or encumbered in any manner, other than transfers by will or intestacy, by inter vivos or testamentary trust where the
CVR is to be passed to the beneficiaries upon the death of the trustee, pursuant to a court order, by operation of law, or in
connection with the dissolution, liquidation or termination of a corporation or other entity which is the holder thereof. The
CVRs will not be registered under the Securities Act of 1933, as amended.
the Effective Time, each option granted by TheStreet to purchase shares of Common Stock under its 2007 Performance Incentive Plan,
as amended and restated, which is outstanding and unexercised immediately prior to the Effective Time will be cancelled without
of Cash Portion of Merger Consideration
the Merger is not conditioned on Parent or any other party obtaining financing, Parent has deposited the aggregate cash portion
of the Merger Consideration (equal to $16.5 million) with an escrow agent pursuant to an Escrow Agreement, dated as of June 11,
2019 (the “Escrow Agreement”), among TheStreet, Parent and Citibank, N.A., as escrow agent. Pursuant to the Escrow
Agreement, such cash portion of the Merger Consideration will be paid automatically to a paying agent immediately after the Effective
Time, which paying agent shall be responsible for paying such cash portion of the Merger Consideration to the former stockholders
of TheStreet. TheStreet is entitled to seek specific performance against Parent in order to enforce Parent’s obligations
under the Merger Agreement, including payment of such cash portion of the Merger Consideration.
the Merger Agreement, Parent has represented to TheStreet that, at the Effective Time, Parent will have sufficient funds available
to (a) pay all costs, fees and expenses related to the Merger Agreement and the transactions contemplated thereby and (b)
to satisfy the working capital needs and other general corporate requirements of Parent and TheStreet following the Merger.
Board of Directors of TheStreet has approved the Merger Agreement and resolved to recommend the adoption of the Merger Agreement
by TheStreet’s stockholders, who will be asked to vote on the adoption of the Merger Agreement at a special stockholders
meeting (the “Merger Proposal”).
Terms of the Merger Agreement
has made customary representations and warranties to Parent in the Merger Agreement and has agreed to customary covenants, including
covenants regarding the operation of TheStreet’s business prior to the completion of the Merger. In addition, TheStreet
has agreed to covenants prohibiting it and its representatives from soliciting, providing information or entering into discussions
concerning competing proposals to the Merger, except in limited circumstances relating to bona fide, unsolicited proposals received
by TheStreet in writing before the receipt of stockholder approval of the Merger Proposal where the Board of Directors of TheStreet
determines in good faith, after consultation with TheStreet’s outside legal and financial advisors, that any such proposal
constitutes or could reasonably be expected to result in, after taking such action with respect to such proposal, a “Superior
Proposal” (as such term is defined in the Merger Agreement) and that the failure to take such action with respect to such
proposal would likely be a violation of the directors’ fiduciary duties under applicable law.
as permitted under the terms of the Merger Agreement, the Board of Directors of TheStreet may not withdraw, change, qualify or
modify, or publicly propose to withdraw, change, qualify or modify, in a manner adverse to Parent, TheStreet’s recommendation
that its stockholders adopt the Merger Agreement (an “Adverse Recommendation Change”). However, the Merger Agreement
provides that, at any time prior to the receipt of stockholder approval of the Merger Proposal, but not after, if the Board of
Directors has concluded in good faith after consultation with TheStreet’s outside legal and financial advisors that the
failure of the Board of Directors to effect an Adverse Recommendation Change may be inconsistent with the directors’ fiduciary
duties to TheStreet’s stockholders under applicable law, then the Board of Directors may effect an Adverse Recommendation
Change, provided that, subject to limited exceptions, TheStreet provides advance written notice to Parent and offers to negotiate
in good faith with Parent any adjustments to the terms and conditions of the Merger Agreement proposed by Parent before the Board
of Directors takes such action and the Board of Directors resolves that, after taking into account any such adjustments proposed
by Parent, the competing proposal remains a Superior Proposal.
consummation of the Merger is subject to certain conditions, including (i) adoption of the Merger Agreement by TheStreet’s
stockholders, (ii) the Distribution shall have occurred or the Recapitalization shall have been effectuated, as the case may be,
(iii) the absence of any law, governmental order or pending action of any governmental authority preventing or seeking to prevent
the consummation of the Merger, (iv) subject to certain materiality exceptions, the accuracy of the representations and warranties
of each of the parties to the Merger Agreement, (v) the compliance in all material respects by the parties with the covenants
contained in the Merger Agreement, (vi) the absence of a material adverse effect on TheStreet and (vii)
certain other customary closing conditions.
Merger Agreement contains certain termination rights in favor of TheStreet, on the one hand, and Parent, on the other hand, including
each party’s right to terminate the Merger Agreement if, among other things, (i) approval of the Merger Proposal is not
obtained from TheStreet’s stockholders or (ii) the Merger has not been consummated by October 31, 2019, so long as the terminating
party’s willful breach of the Merger Agreement was not the primary reason for the closing of the Merger not occurring on
or before such date.
addition, the Merger Agreement provides that the Merger Agreement may be terminated by TheStreet to enter into a definitive agreement
with respect to a Superior Proposal, provided that TheStreet complies with certain notice and other requirements set forth in
the Merger Agreement. In such event, TheStreet may be required to pay to Parent a cash termination fee equal to $330,000. TheStreet
may also be required to pay a termination fee if the Merger Agreement is terminated under certain circumstances when the TheStreet
receives or has received a “Competing Proposal” (as such term is defined in the Merger Agreement) from a third party
after the date of the Merger Agreement, which Competing Proposal becomes publicly known, and, within twelve months of the termination
of the Merger Agreement, TheStreet enters into, agrees to or consummates a transaction regarding such Competing Proposal or any
Merger Agreement has been provided pursuant to applicable rules and regulations of the SEC in order to provide investors and stockholders
with information regarding its terms; however, it is not intended to provide any other factual information about TheStreet or
Parent, their respective subsidiaries and affiliates, or any other party. In particular, the representations, warranties and covenants
contained in the Merger Agreement have been made only for the purpose of the Merger Agreement and, as such, are intended solely
for the benefit of the parties to the Merger Agreement. In many cases, these representations, warranties and covenants are subject
to limitations agreed upon by the parties and are qualified by certain disclosures exchanged by the parties in connection with
the execution of the Merger Agreement. Furthermore, many of the representations and warranties in the Merger Agreement are the
result of a negotiated allocation of contractual risk among the parties and, taken in isolation, do not necessarily reflect facts
about TheStreet, Parent, their respective subsidiaries and affiliates or any other party. Likewise, any references to materiality
contained in these representations and warranties may not correspond to concepts of materiality applicable to investors or stockholders.
In addition, such representations and warranties will not survive consummation of the Merger and were made only as of the date
of the Merger Agreement or such other date specified in the Merger Agreement. Finally, information concerning the subject matter
of the representations and warranties may change after the date of the Merger Agreement and these changes may not be fully reflected
in TheStreet’s public disclosures.
A RESULT OF THE FOREGOING, INVESTORS AND STOCKHOLDERS ARE STRONGLY ENCOURAGED NOT TO RELY ON THE REPRESENTATIONS, WARRANTIES AND
COVENANTS CONTAINED IN THE MERGER AGREEMENT, OR ON ANY DESCRIPTIONS THEREOF, AS ACCURATE CHARACTERIZATIONS OF THE STATE OF FACTS
OR CONDITION OF THESTREET OR ANY OTHER PARTY.
foregoing description of the Merger Agreement and the transactions contemplated thereby is subject to, and qualified in its entirety
by, the full text of the Merger Agreement, including the form of CVR Agreement attached thereto as Exhibit A, and the Escrow Agreement,
copies of which are attached hereto as Exhibit 2.1 and Exhibit 10.1, respectively, and the terms of which are incorporated herein
statements in this Current Report on Form 8-K may constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to a variety of matters, including,
without limitation, statements regarding the anticipated timing of the Merger, the possibility of obtaining stockholder approval
of the Merger Proposal or other approvals or consents for the Merger and the anticipated timing and ability of stockholders to
receive cash payments pursuant to the Distribution or the Recapitalization, as the case may be, or the CVRs. These forward-looking
statements are made on the basis of the current beliefs, expectations and assumptions of the management of TheStreet and are subject
to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements.
All such forward-looking statements speak only as of the date they are made, and TheStreet undertakes no obligation to update
or revise these statements, whether as a result of new information, future events or otherwise, except as may be required by law.
These forward-looking statements involve many risks and uncertainties that may cause actual results to differ materially from
what may be expressed or implied in these forward-looking statements. For example, risks and uncertainties that could affect the
forward-looking statements set forth in this Current Report on Form 8-K include: potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the Merger; unexpected costs, charges or expenses relating to or
resulting from the Merger; litigation or adverse judgments relating to the Merger; risks relating to the completion of the proposed
Merger, including the risk that the required stockholder vote might not be obtained in a timely manner or at all, or other conditions
to the completion of the Merger not being satisfied; any difficulties associated with requests or directions from governmental
authorities resulting from their review of the Merger; any changes in general economic or industry-specific conditions; and factors
generally affecting the business, operations, and financial condition of TheStreet, including the information contained in TheStreet’s
Annual Report on Form 10-K for the year ended December 31, 2018, including the amendments thereto, subsequent Quarterly Reports
on Form 10-Q, including the Transition Report on Form 10-QT for the period January 1, 2019, to March 31, 2019, filed with the
SEC on May 15, 2019, and other reports and filings with the SEC.
Information and Where to Find It
intends to file with the SEC and furnish to its stockholders a proxy statement in connection with, among other things, the Merger.
INVESTORS AND STOCKHOLDERS OF THESTREET ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THESTREET AND THE PROPOSED MERGER. This filing does not constitute
a solicitation of any vote or approval. The proxy statement and other relevant materials (when they become available), and any
other documents filed by TheStreet with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In
addition, investors and stockholders may obtain free copies of the documents filed with the SEC by TheStreet by directing such
requests to TheStreet, Inc., 14 Wall Street, 15th Floor, New York, New York 10005, Attention: Investor Relations, Telephone: (212)
in the Solicitation
and its directors and executive officers may, under SEC rules, be deemed to be participants in the solicitation of proxies from
TheStreet’s stockholders in connection with the proposed Merger. Information regarding TheStreet’s directors and executive
officers is contained in TheStreet’s Annual Report on Form 10-K filed with the SEC on March 15, 2019, as amended on March
21, 2019, and April 30, 2019. To the extent that holdings of the TheStreet’s securities by its directors and executive officers
have changed since the amounts shown in TheStreet’s Annual Report, such changes have been or will be reflected on Statements
of Change in Ownership on Form 4 or Form 5 filed with the SEC. Additional information regarding the participants in the solicitation
of proxies in respect of the proposed Merger and a description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement when it becomes available.