SUPPLEMENTAL
DISCLOSURE TO PROXY STATEMENT
The
following information should be read in conjunction with the Proxy Statement, which should be read in its entirety. All page references
in the information below are to pages in the Proxy Statement, and all capitalized terms used below, unless otherwise defined,
shall have the meanings set forth in the Proxy Statement. Paragraph references used herein refer to the Proxy Statement before
any additions or deletions resulting from the Supplemental Disclosure. Underlined text shows text being added to a referenced
disclosure in the Proxy Statement and a line through text shows text being deleted from a referenced disclosure in the Proxy Statement.
The information contained herein speaks only as of July 31, 2019, unless the information indicates that another date applies.
Letter
to Stockholders
The
disclosure in the letter addressed to TheStreet’s stockholders from Larry Kramer, Chairman of the Board, Eric Lundberg,
Chief Executive Officer and Chief Financial Officer of the Company, and Kevin Rendino, Chair of the Strategic Committee, is hereby
amended and supplemented by adding the underlined disclosure and deleting the lined-out disclosure in the seventh full paragraph,
as follows:
Currently,
we estimate that the amount of cash we will be able to distribute immediately prior to the merger will range from approximately
$2.44
$2.22
per share to approximately $
2.61
$2.37
per share
, or approximately
$2.92 per share to approximately $3.06 per share in the event of an early release of the full amount of the RateWatch escrows
.
This
These
estimate
s
reflect
s
management’s estimate of cash on hand assuming
that the distribution is effectuated on or about July 31, 2019
, and the release of the full amount of the RateWatch escrows
as of such date
. The actual amount to be distributed will be affected by our operating results, transaction expenses, certain
severance benefits that were earned prior to the merger, the actual timing of the distribution and other factors. Currently, we
estimate that the total amounts that will be released from the escrows for the CVRs will range from approximately $0.66 per share
to approximately $0.77 per share
, or $0.09 per share in the event of an early release of the RateWatch escrows
. As a result
of the foregoing, TheStreet stockholders are expected to receive total cash consideration, including payments under the CVRs,
of approximately
$33.0 million to $34.5 million, or approximately $6.19 to $6.47 per share
$32.5 million to
$33.3 million, or approximately $6.10 to $6.24 per share
, which represents an average premium of
7.8% to 12.6%
6.2%
to 8.8%
, respectively, over the seven-day volume weighted average price of $5.74 of our common stock as of June 11, 2019,
the last trading day before we announced the merger transaction.
Summary
of the Terms of the Merger
The
disclosure under the heading “Summary of the Terms of the Merger—Merger Consideration—TheStreet Common Stock”
is hereby amended and supplemented by adding the underlined disclosure and deleting the lined-out disclosure in the sixth full
paragraph starting on page 2 of the Proxy Statement, as follows:
Each
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.
TheStreet currently expects that the RateWatch escrows originally scheduled to be
released after August 20, 2019 will now be released early on August 1, 2019, prior to the closing of the Merger.
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, Maven and a rights agent (the “CVR Agreement”). For additional information, see the section
entitled “Proposal No. 1: The Merger Proposal—Agreements Related to the Merger—The CVR Agreement” beginning
on page 88. 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 TheStreet common stock to approximately $0.77 per share of TheStreet common stock
,
or $0.09 per share of TheStreet common stock in the event of an early release of the full amount of the RateWatch escrows
.
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.
The
disclosure under the heading “Summary of the Terms of the Merger—Pre-Merger Distribution” is hereby amended
and supplemented by adding the underlined disclosure and deleting the lined-out disclosure in the third full paragraph on page
3 of the Proxy Statement, as follows:
Immediately
prior to the Effective Time, TheStreet will distribute all of its cash on hand, less certain liabilities and expenses relating
to the Prior Transactions and the Merger Agreement and the related transactions, in the form of a cash distribution declared by
the Board of Directors and paid to holders of TheStreet common stock (the “Pre-Merger Distribution”), which is expected
to be paid concurrently with the cash consideration in the Merger. Currently, TheStreet’s management estimates that the
amount of cash TheStreet will be able to distribute in the Pre-Merger Distribution will range from approximately
$2.44
$2.22
per share of TheStreet common stock to approximately $
2.61
$2.37
per share of TheStreet
common stock
, or approximately $2.92 per share to approximately $3.06 per share in the event of an early release of the full
amount of the RateWatch escrows
.
This
These
estimate
s
reflect
s
management’s
estimate of cash to be held by TheStreet assuming that the Pre-Merger Distribution is effectuated on or about July 31, 2019
,
and the release of the full amount of the RateWatch escrows as of such date
. The actual amount to be distributed will be affected
by TheStreet’s operating results, transaction expenses, certain severance benefits that were earned prior to the Merger,
the actual timing of the Pre-Merger Distribution and other factors. The effectiveness of the Merger is conditioned upon effectuation
of the Pre-Merger Distribution.
Questions
and Answers About the Merger and The Special Meeting
The
disclosure under the heading “Questions and Answers About the Merger and The Special Meeting—Will holders of TheStreet
common stock receive anything other than Merger Consideration in connection with the Merger?” is hereby amended and supplemented
by adding the underlined disclosure and deleting the lined-out disclosure in the first paragraph on page 13 of the Proxy Statement,
as follows:
As
discussed elsewhere in this proxy statement, immediately 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 B2B Business units
(collectively, the “Prior Transactions”) and the Merger Agreement and the transaction contemplated thereby, in the
form of a cash distribution declared by the Board of Directors and paid to holders of TheStreet common stock (the “Pre-Merger
Distribution”), which is expected to be paid concurrently with the cash consideration in the Merger. Currently, TheStreet’s
management estimates that the amount of cash TheStreet will be able to distribute in the Pre-Merger Distribution will range from
approximately
$2.44
$2.22
per share of TheStreet common stock to approximately $
2.61
$2.37
per share of TheStreet common stock
, or approximately $2.92 per share to approximately $3.06 per share in the event of
an early release of the full amount of the RateWatch escrows
.
This
These
estimate
s
reflect
s
management’s estimate of cash to be held by TheStreet assuming that the Pre-Merger Distribution is effectuated
on or about July 31, 2019
, and the release of the full amount of the RateWatch escrows as of such date
. The actual amount
to be distributed will be affected by TheStreet’s operating results, transaction expenses, certain severance benefits that
were earned prior to the Merger, the actual timing of the Pre-Merger Distribution and other factors. The effectiveness of the
Merger is conditioned upon effectuation of the Pre-Merger Distribution.
The
disclosure under the heading “Questions and Answers About the Merger and The Special Meeting— What are the CVRs?”
is hereby amended and supplemented by adding the underlined disclosure and deleting the lined-out disclosure in the second full
paragraph on page 13 of the Proxy Statement, as follows:
The CVRs are contractual contingent value rights that 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.
TheStreet currently expects that the RateWatch escrows
originally scheduled to be released after August 20, 2019 will now be released early on August 1, 2019, prior to the closing of
the Merger.
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, Maven 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 TheStreet common stock to approximately $0.77 per share of TheStreet common stock
, or $0.09 per share of TheStreet common
stock in the event of an early release of the full amount of the RateWatch escrows
. 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 has the discretion to determine to distribute the CVRs to stockholders as part of the Pre-Merger Distribution in lieu
of including the CVRs in the Merger Consideration.
The
disclosure under the heading “Questions and Answers About the Merger and The Special Meeting— Is it possible that
I will receive more than one payment under the CVRs?” is hereby amended and supplemented by adding the underlined disclosure
and deleting the lined-out disclosure in the first full paragraph on page 14 of the Proxy Statement, as follows:
Yes.
Although there is no guaranty that any payment will be made to holders of CVRs, in respect of their contingent value rights, such
holders may receive more than one payment under the CVR, pursuant to the terms of the CVR Agreement. In the event you receive
any cash payment as a holder of CVR, it is uncertain that there would be more than one such payment during the term of the form
of CVR agreement. You may receive one payment, you may receive more than one payment or you may not receive any payment. Any payment
to you is contingent on whether any funds escrowed in connection with the Prior Transactions are released from the relevant escrows,
which are
currently
scheduled to be released after August 20, 2019, and January 31, 2020, respectively.
TheStreet
currently expects that the RateWatch escrows originally scheduled to be released after August 20, 2019 will now be released early
on August 1, 2019, prior to the closing of the Merger, in which event these funds would be included in the Pre-Merger Distribution
instead of the CVRs.
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.
The
disclosure under the heading “Questions and Answers About the Merger and The Special Meeting—Is it possible that I
will not receive any payment under the CVRs?” is hereby amended and supplemented by adding the underlined disclosure and
deleting the lined-out disclosure in the second full paragraph on page 14 of the Proxy Statement, as follows:
Yes.
There is no guaranty that any payment will be made to holders of CVRs in respect of their contingent value rights. Any payment
to you as a holder of CVRs is contingent on whether any funds escrowed in connection with the Prior Transactions are released
from the relevant escrows, which are
currently
scheduled to be released after August 20, 2019, and January 31,
2020, respectively.
TheStreet currently expects that the RateWatch escrows originally scheduled to be released after August
20, 2019 will be now released early on August 1, 2019, prior to the closing of the Merger, in which event these funds would be
included in the Pre-Merger Distribution instead of the CVRs.
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.
Risk
Factors
The
disclosure under the heading “Risk Factors —Risks Related to the Merger—The projected value of the CVRs may
not be realized” is hereby amended and supplemented by adding the underlined disclosure and deleting the lined-out disclosure
in the fourth full paragraph on page 25 of the Proxy Statement, as follows:
The
CVRs will entitle each 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.
TheStreet currently expects that the RateWatch escrows originally scheduled to be
released after August 20, 2019 will now be released early on August 1, 2019, prior to the closing of the Merger, in which event
these funds would be included in the Pre-Merger Distribution instead of the CVRs.
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 TheStreet
common stock to approximately $0.77 per share of TheStreet common stock
, or $0.09 per share of TheStreet common stock in the
event of an early release of the full amount of the RateWatch escrows
. However, 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.
Proposal
No. 1: The Merger Proposal
The
disclosure under the heading “Proposal No. 1: The Merger Proposal —Overview of the Merger—Merger Consideration”
is hereby amended and supplemented by adding the underlined disclosure and deleting the lined-out disclosure in the fifth full
paragraph on page 27 of the Proxy Statement, as follows:
Each
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.
TheStreet currently expects that the RateWatch escrows originally scheduled to be
released after August 20, 2019 will now be released early on August 1, 2019, prior to the closing of the Merger, in which event
these funds would be included in the Pre-Merger Distribution described below instead of the CVRs.
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, Maven and a rights agent (the “CVR Agreement”), as described below under the heading “—Agreements
Related to the Merger—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 TheStreet common stock to approximately
$0.77 per share of TheStreet common stock
, or $0.09 per share of TheStreet common stock in the event of an early release of
the full amount of the RateWatch escrows
. 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.
The
disclosure under the heading “Proposal No. 1: The Merger Proposal —Overview of the Merger—Pre-Merger Distribution”
is hereby amended and supplemented by adding the underlined disclosure and deleting the lined-out disclosure in the first paragraph
on page 28 of the Proxy Statement, as follows:
Immediately
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 B2B Business units (collectively, the “Prior Transactions”)
and the Merger Agreement and the related transactions, in the form of a cash distribution declared by the Board of Directors and
paid to holders of TheStreet common stock (the “Pre-Merger Distribution”), which is expected to be paid concurrently
with the cash consideration in the Merger. Currently, TheStreet’s management estimates that the amount of cash TheStreet
will be able to distribute in the Pre-Merger Distribution will range from approximately
$2.44
$2.22
per
share of TheStreet common stock to approximately $
2.61
$2.37
per share of TheStreet common stock
, or
approximately $2.92 per share to approximately $3.06 per share in the event of an early release of the full amount of the RateWatch
escrows
.
This
These
estimate
s
reflect
s
management’s estimate of cash
to be held by TheStreet assuming that the Pre-Merger Distribution is effectuated on or about July 31, 2019, and the release of
the full amount of the RateWatch escrows as of such date. The actual amount to be distributed will be affected by TheStreet’s
operating results, transaction expenses, certain
severance
benefits that were earned prior to the Merger, the actual timing of the Pre-Merger Distribution and other factors. The effectiveness
of the Merger is conditioned upon effectuation of the Pre-Merger Distribution.
The
disclosure under the heading “Proposal No. 1: The Merger Proposal —Reasons for the Merger—Certainty of Value”
is hereby amended and supplemented by adding the underlined disclosure and deleting the lined-out disclosure in the first paragraph
on page 49 of the Proxy Statement, as follows:
Certainty
of Value.
The Board of Directors considered the consideration to be received by stockholders of TheStreet in the
Merger, which will equal a fixed amount of $3.09183364 per share of TheStreet common stock, to (i) the historical earnings and
financial performance of the B2C Business and share price of TheStreet and (ii) the Board of Director’s estimate of the
current and future prospects of TheStreet as a standalone entity following the sale of RateWatch and the B2B Business. The Board
of Directors took into account the fact that upon execution of the Merger Agreement, Maven agreed to deposit, and has in fact
deposited, the aggregate cash portion of the Merger Consideration (equal to $16.5 million) with an escrow agent pursuant to the
Escrow Agreement, and that these escrowed funds will be paid automatically to a paying agent immediately after the Effective Time,
which paying agent will be responsible for paying the cash portion of the Merger Consideration to the former stockholders of TheStreet.
The Board of Directors further considered the fact that the form of the Merger Consideration would be a combination of cash, which
will provide stockholders with certainty of value and immediate liquidity, and the CVRs, which will entitle the holders thereof
to receive the funds escrowed in connection with the Prior Transactions when they are released from the relevant escrows as well
as the risks that stockholders will not receive the entire escrowed amounts. 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 TheStreet common
stock to approximately $0.77 per share of TheStreet common stock
, or $0.09 per share of TheStreet common stock in the event
of an early release of the full amount of the RateWatch escrows
. The Board of Directors also considered the Pre-Merger Distribution,
which will entail the distribution immediately prior to effectiveness of the Merger of all of TheStreet’s cash on hand,
less certain liabilities and expenses relating to the Prior Transactions and the Merger Agreement, which distribution TheStreet’s
management estimates will range from approximately
$2.44
$2.22
per share of TheStreet common stock to
approximately $
2.61
$2.37
per share of TheStreet common stock
, or approximately $2.92 per share to
approximately $3.06 per share in the event of an early release of the full amount of the RateWatch escrows
. The Board of Directors
believed that the certainty of value, in the aggregate, to be so received by TheStreet stockholders was compelling compared to
the potential long-term value creation potential of TheStreet and the long-term business risks posed by continuing to operate
TheStreet as an independent entity. The Board of Directors further believed that, based upon all of the other factors considered
by the Board of Directors after discussion with TheStreet’s management, financial advisors and legal counsel, this was the
best reasonably attainable value for TheStreet stockholders and, in particular, that the consideration payable in the Merger represented
the highest price that Maven was willing to pay and the highest price per share value reasonably obtainable as of the date of
the Merger Agreement. In this regard, the Board of Directors also took into account, among other factors, that during the course
of negotiations with Maven, Maven raised its offer price for TheStreet three times, from $2.25 per share on April 9, 2019 to $2.62
per share on May 30, 2019 and finally to $3.09183364 per share on June 5, 2019.
The
disclosure under the heading “Proposal No. 1: The Merger Proposal —Agreements Related to the Merger—The CVR
Agreement—Payment Procedures and Tax Withholding” is hereby amended and supplemented by adding the underlined disclosure
and deleting the lined-out disclosure in the first paragraph under that heading starting on page 89 of the Proxy Statement, as
follows:
Each
CVR will entitle the CVR Holder thereof to receive a pro rata portion (the “CVR Percentage”) of the funds escrowed
in connection with the Prior Transactions (the “Escrows”) when they are released and received by the Rights Agent
from the relevant Escrows (an “Escrow Payment”), which are
currently
scheduled to be released after
August 20, 2019, and January 31, 2020, respectively.
TheStreet currently expects that the RateWatch escrows originally scheduled
to be released after August 20, 2019 will now be released early on August 1, 2019, prior to the Closing of the Merger, in which
event these funds would be included in the Pre-Merger Distribution instead of the CVRs.
A CVR Holder’s CVR Percentage
of an Escrow Payment will equal the quotient of the number of CVRs held by such CVR Holder divided by the number of shares of
TheStreet common stock issued and outstanding immediately prior to the Effective Time (other than shares, if any, held by TheStreet,
Maven or Merger Sub and shares with respect to which appraisal rights have been properly exercised in accordance with the DGCL).
The Escrow
s
include:
|
•
|
|
the
escrows established in connection with the sale of the RateWatch business in June 2018, which escrow amount currently comprises
an aggregate of approximately $
3.5
3.7
million in funds, pursuant to the Escrow Agreement, dated as of
June 20, 2018, by and among TheStreet, Inc., Bankers Financial Products Corporation, S&P Global Market Intelligence Inc. and
Citibank, National Association, as escrow agent
(unless such escrows are released early, as currently expected, in which event
these funds would be included in the Pre-Merger Distribution instead of the CVRs)
; and
|
|
|
|
|
|
•
|
|
the
escrows established in connection with the sale of the B2B Business in February 2019, which escrow amount currently comprises
an aggregate of approximately $0.5 million in funds, pursuant to the Escrow Agreement, dated as of February 14, 2019, by and among
TheStreet, Inc., Euromoney Institutional Investor PLC and Citibank, National Association, as escrow agent.
|
—
End of Supplemental Disclosure to Proxy Statement —
Important
Additional Information and Where to Find It
On
July 15, 2019, TheStreet filed the Proxy Statement with the SEC 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 BECAUSE THEY CONTAIN IMPORTANT
INFORMATION ABOUT THESTREET AND THE MERGER. The Proxy Statement, 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) 321-5000.
Participants
in the Solicitation
TheStreet
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, as well as the Proxy Statement. 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, is contained in the Proxy Statement.
Forward-Looking
Statements
Certain
statements in this communication 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 Pre-Merger Distribution 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, including, without limitation, risks and uncertainties relating to 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 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 the
Proxy Statement and in TheStreet’s Annual Report on Form 10-K for the year ended December 31, 2018, 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.
