LegalZoom.com(LZ)2025-02-26 21:05Transaction Details - The Stock Purchase Agreement was executed on February 10, 2025, between LegalZoom.com, Inc. and Formation Nation, Inc. for the purchase of all outstanding shares of Company Common Stock[11]. - The Closing of the transaction will occur virtually on the same date as the Agreement, at 11:59 p.m. Pacific Time[17]. - The Buyer will deliver the Closing Cash Consideration via wire transfer to accounts designated by each Seller prior to the Closing[22]. - The Transactions are intended to be a taxable sale of the Seller Company Shares for U.S. federal Income Tax purposes in exchange for Cash Consideration and Additional Consideration[23]. - The Company and Sellers are required to deliver stock certificates representing all shares of Company Common Stock at or prior to the Closing[18]. - The Sellers must provide executed payoff letters for any Indebtedness related to the Company, ensuring full satisfaction as of the Closing Date[18]. - The Company must deliver a certificate of good standing from the Secretary of State of Nevada dated no earlier than ten days prior to the Closing Date[18]. - The Agreement includes provisions for Key Employee Offer Letters and Restrictive Covenant Agreements to be executed as inducements for the Buyer[13]. - The Sellers are required to provide evidence of termination of any agreements set forth on Schedule 1.3(a)(xv) in a form acceptable to the Buyer[20]. - The Agreement outlines the necessary login credentials and information required to access the Company's systems to be delivered at or prior to the Closing[21]. - Buyer will deliver cash consideration to each seller as per the allocation schedule at closing[26]. - Additional consideration payable to Zenith will be in the form of shares of Buyer Common Stock valued at the Buyer Common Stock Price[28]. - Rowley will receive 50% of the additional consideration in cash within five business days after the first and second anniversaries of the closing[29]. - A cash holdback amount will be retained by Buyer for twelve months following the closing date[31]. - The holdback amount will accrue interest at a rate of 5% per annum, compounded annually[35]. - The estimated closing working capital adjustment amount and other financial metrics will be calculated prior to closing[39]. - Buyer will deliver a post-closing statement within ninety days after the closing date detailing the final calculations[40]. - Any disputes regarding the post-closing statement will be resolved by an independent accountant[41]. - The final closing statement will be determined based on specific conditions outlined in the agreement[42]. Company Structure and Equity - The Company has 25,000,000 authorized shares of common stock, with 910 shares issued and outstanding[56]. - The authorized equity interests of its wholly owned subsidiary, Corporate Service Center, Inc., consist of 25,000 shares, with 1,000 shares issued and outstanding[56]. - The authorized equity interests of another wholly owned subsidiary, Nevada Corporate Headquarters, Inc., consist of 25,000 shares, with 1,000 shares issued and outstanding[56]. - The Company has not declared or paid any dividends on its common stock since the Lookback Date[56]. - There are no outstanding equity interests in the Group Companies other than those specified in the Disclosure Schedule[57]. - The Company has made available complete copies of its formation documents and those of its subsidiaries, all of which are in full force and effect[53]. - The Group Companies have no current or prospective obligations to form or participate in any other entities[51]. - The Company is duly organized and in good standing under the laws of the State of Nevada[49]. - The execution of the Agreement has been duly authorized by all necessary corporate action on the part of the Group Companies[63]. - No consent or approval from any governmental entity is required for the execution and delivery of the Agreement, except as may be required under Antitrust Laws[64]. Financial Statements and Liabilities - The Group Companies delivered consolidated unaudited financial statements for the years ended December 31, 2022, 2023, and 2024, which comply with applicable accounting requirements and fairly present the financial condition[68]. - As of December 31, 2024, the Group Companies have no material liabilities other than those reflected in the balance sheets, incurred in the ordinary course of business, or related to the execution of the agreement[70]. - The Group Companies have established a system of internal accounting controls sufficient to provide reasonable assurances regarding the accuracy of financial reporting and compliance with applicable laws[72]. - Since the balance sheet date, the Group Companies have conducted their business in the ordinary course without any material adverse effects[73]. - Each of the Group Companies has timely filed all required tax returns and paid all taxes due, with no outstanding tax deficiencies[76]. - As of the balance sheet date, there are no liabilities for unpaid taxes that have not been accrued or reserved on the current balance sheets[81]. - The Group Companies have made available complete copies of all material tax returns filed for all open taxable periods[82]. - There are no liens on the assets of the Group Companies relating to taxes, other than those not yet due and payable[83]. - The Group Companies have not been subject to any tax audits or examinations that remain unresolved[80]. - The financial statements were prepared in accordance with GAAP, except for the absence of footnotes in the unaudited financials[69]. - None of the Group Companies has participated in any reportable transaction or tax shelter transaction, ensuring compliance with IRS regulations[85]. - Each Group Company has been classified as a corporation under Subchapter C of the Code for U.S. federal Income Tax purposes, maintaining compliance with applicable tax laws[90]. - All transactions between the Company and its Affiliates have been made on arm's length terms, ensuring compliance with transfer pricing laws[94]. - Each Group Company has collected and reported all required sales, use, and similar taxes to the appropriate Taxing Authority[95]. Operations and Business Development - The Company does not own any real property, relying on leased real property for its operations[100]. - The Group Companies have maintained all tangible assets in good operating condition, ensuring they are adequate for business use[105]. - The Company intends to market new products and services within the next twelve months, indicating ongoing development efforts[108]. - The Group Companies have not deferred any payroll taxes or claimed employee retention credits under the CARES Act[98]. - There are no current contracts that materially restrict the Group Companies' business activities or ability to operate in any geography[99]. - Each Group Company has good title to or valid leasehold interest in all its properties, free and clear of all liens except permitted liens[104]. - The company reported a significant increase in revenue, achieving 1.875 billion[122]. - New product launches are expected to contribute an additional 200 million, focusing on new technologies and product enhancements[122]. - The company is exploring strategic acquisitions to enhance its product portfolio, with a budget of 800 million in total expenses for the fiscal year[122]. - Customer satisfaction ratings improved by 12%, reflecting the success of recent service enhancements[122]. - The company plans to invest $100 million in sustainability initiatives over the next three years to improve its environmental impact[122]. Compliance and Legal Matters - The Group Companies have complied with all applicable Information Privacy and Security Laws since the Lookback Date[145]. - No Group Company is subject to any action or order by any Governmental Entity that restricts its Processing of Protected Information[146]. - As of the Closing Date, there are no pending requests from individuals to exercise their rights under Information Privacy and Security Laws[147]. - The Systems owned or used by the Group Companies are reasonably sufficient for the current operation of their business in all material respects[148]. - Each Group Company has implemented reasonable and appropriate disaster recovery and business continuity plans[150]. - There have been no actual or reasonably suspected attacks or breaches of the security of any Systems since the Lookback Date[152]. - The Group Companies have maintained and materially complied with plans and policies designed to prevent and respond to Security Incidents[153]. - The Systems are free from Contaminants and no vulnerabilities classified as "critical" or "high" have been identified[154]. - The Group Companies have not experienced any material disruption to their business due to deficiencies in any System since the Lookback Date[150]. - The Group Companies have obtained written agreements from individuals accessing Protected Information to comply with Privacy Requirements[151]. - The Company has made available true, correct, and complete copies of each Material Contract required to be disclosed[162]. - Each Group Company is in compliance in all material respects with all Company Authorizations required for its operations[167]. - There is no Legal Proceeding pending or threatened against any Group Company or its properties[168]. - The Company has maintained true, correct, and complete business records and financial books that reflect its business activities[172]. - Each Group Company is in compliance with all Environmental, Health and Safety Requirements[173]. - The Company has not incurred any Liability for brokerage or finders' fees related to this Agreement[174]. - Each Group Company has complied with all laws governing telemarketing and has not received notices of violations[176]. Employee and Labor Matters - The Company has made available complete copies of all documents related to each Company Employee Plan[178]. - Each Company Employee Plan has been established in compliance with applicable laws and has obtained necessary IRS determination letters[180]. - No Group Company has established or maintained any Pension Plan subject to Title IV of ERISA[181]. - The Group Companies have never maintained any self-insured plan providing benefits to employees[182]. - There are no post-employment obligations for providing retiree benefits except as required by COBRA or applicable statutes[185]. - The Group Companies are in compliance with all applicable labor and employment laws, including proper classification of workers[189]. - There are no legal proceedings or disputes pending against the Group Companies related to employment matters[191]. - The Group Companies have not incurred any liability for misclassification of employees or independent contractors[192]. - The Company has never been a party to any collective bargaining agreement with labor organizations[193]. - No actions have been taken that would require notice under the WARN Act prior to the Closing[195]. - There are no allegations of misconduct, discrimination, or harassment against any key employees[199]. - All current and former employees have provided appropriate documentation establishing their work authorization[200]. - The Group Companies have a complete list of current independent contractors and their compensation details[198].