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Item 8.01.
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Other Information.
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On December 17,
2012, in its proxy statement the Company announced it plans to seek stockholder approval at its annual meeting for a reorganization in which the Company would become a wholly owned subsidiary of Mobile Systems Corp., a newly formed Delaware
corporation (the “Reorganization”). In the Reorganization, each outstanding share of common stock of Motricity would be exchanged for one share of common stock of Mobile Systems Corp., each outstanding share of preferred stock of Motricity
would be exchanged for one share of preferred stock of Mobile Systems Corp., each outstanding warrant to purchase shares of common stock of Motricity would be exchanged for a warrant to purchase an equivalent number of shares of Mobile Systems Corp,
and each option to purchase shares of common stock of Motricity would be assumed by Mobile Systems Corp. and become exercisable for an equivalent number of shares of Mobile Systems Corp. The consolidated assets and liabilities of Mobile Systems
Corp. immediately after the merger would be the same as the consolidated assets and liabilities of Motricity immediately prior to the merger. The sole purpose of the Reorganization is to protect the long-term value to the Company of its substantial
net operating loss carryforwards against limitations that could be imposed as a result of certain “ownership changes” as specified under the Internal Revenue Code, which will be accomplished by imposing certain restrictions on the transfer
of the common stock of Mobile Systems Corp. Under Mobile Systems Corp.’s certificate of incorporation, its common stock is subject to limited transfer restrictions that are intended to protect against a potential ownership change for tax
purposes. The transfer restrictions are described in detail in the Proxy Statement. That filing also includes the full text of the transfer restrictions, as they appear in the certificate of incorporation of Mobile Systems Corp.
The Company said it plans to submit the transaction to a vote of its stockholders as part of the upcoming annual meeting of Motricity stockholders. The
date of the annual meeting is currently set for January 29, 2013, pending clearance by the SEC of the Proxy Statement, and the record date for determining the
stockholders entitled to receive notice of and to vote at the annual meeting is December 31, 2012. The Reorganization requires the approval of the holders of a majority of the Company’s
outstanding shares of common stock and Series J preferred stock, voting together as a single class (with each share of common stock having one vote and each share of Series J preferred stock having 40 votes). There can be no assurance that the
Reorganization will be approved.
Cautionary Note Regarding Forward-Looking Statements
Statements made in this report and related statements that express Motricity’s or its management’s intentions, indications, beliefs,
expectations, guidance, estimates, forecasts or predictions of the future constitute forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, and relate to matters that are not historical facts. They include,
without limitation, statements regarding the company’s intention to appeal the Delisting Notice, whether or not the delisting action will be stayed and whether or not the reverse stock split will be implemented. These statements represent
beliefs and expectations only as of the date they were made. The Company may elect to update forward-looking statements but expressly disclaims any obligation to do so, even if its beliefs and expectations change. Actual results may differ from
those expressed or implied in the forward-looking statements.
Such forward-looking statements involve and are subject to certain risks and
uncertainties that may cause our actual results to differ materially from those discussed in a forward-looking statement. These include, but are not limited to: the company’s ability to regain compliance with NASDAQ continued listing
requirements, whether NASDAQ will grant the company’s request to remain on the NASDAQ Global Select Market, whether the Company's stockholders will approve the Proposal, whether the board of directors determines that the reverse stock split is
necessary to regain compliance and other uncertainties described more fully in its filings with the SEC.
Where to Find Additional
Information
On December 17, 2012, Motricity filed a registration statement with the SEC on Form S-4 that includes a preliminary proxy
statement/prospectus and other relevant materials regarding the proposed Reorganization. Stockholders are urged to read the preliminary proxy statement/prospectus filed with the SEC on December 17, 2012, the definitive proxy
statement/prospectus when it becomes available and any other relevant materials filed with the SEC when they become available because they contain, or will contain, important information about Motricity and the proposed Reorganization. The
definitive proxy statement/prospectus will be sent to Motricity stockholders seeking their approval of the Reorganization. Stockholders may obtain a free copy of the preliminary proxy statement/prospectus filed with the SEC, as well as other
documents filed by Motricity with the SEC at the SEC’s web site at www.sec.gov or through Motricity web site as www.motricity.com. The definitive proxy statement/prospectus and Motricity’s other SEC filings also may be obtained for free
from Motricity. Stockholders are urged to read the definitive proxy statement/prospectus and other relevant materials relating to the reorganization when they become available before voting or making any investment decision with respect to the
reorganization.
Motricity, its directors, executive officers and certain members of management and employees may be considered
“participants in the solicitation” of proxies from Motricity’s stockholders in connection with the transaction. Information regarding such persons and a description of their interests in the transaction is contained in the proxy
statement/prospectus and Motricity’s other filings with the SEC. Additional information regarding the interests of those persons may be obtained by reading the definitive proxy statement/prospectus when it becomes available.
