Brian and Scott Tepfer Waive Placement Rights, Eliminating Potentially Dilutive Feature from Balance Sheet
NEW YORK, NY / ACCESSWIRE / August 3, 2016 / uSell.com (OTCQB: USEL), a technology driven company focused on extracting the
maximum value from used mobile devices, announced today that Brian and Scott Tepfer have waived their right to sell $1,500,000 of
shares every quarter, up to a total value of $6,000,000, at a minimum price of $1.20, thus eliminating a derivative liability of
$1,855,000 from uSell's balance sheet. In return, they have been given the right to participate in uSell's new Management Incentive
Compensation Plan, which better aligns management with uSell.com shareholders.
"We are happy with the deal for both ourselves and for the company, as we believe in the long term value of the business," said
Brian Tepfer, CEO of We Sell Cellular, uSell's wholly owned subsidiary. "We have already seen the impact of uSell's technology on
our profitability and scalability and we believe that there is a lot more to come."
Nik Raman, uSell's CEO, said, "This deal goes to show that Brian and Scott have confidence, as I do, in the future. Now that
everyone's incentives are aligned there are no distractions and we can focus intensely on execution."
Details of both the deal and the Management Incentive Compensation Plan are as follows:
On July 27, 2016, uSell.com, Inc. (the "Company") entered into an agreement with Brian Tepfer, who is Executive Vice President
of the Company and Chief Executive Officer of the Company's wholly-owned subsidiary, We Sell Cellular LLC ("We Sell"), and Scott
Tepfer, who is also Executive Vice President of the Company and We Sell's President. Pursuant to the agreement, effective July 1,
2016, the Tepfers agreed to waive certain stock placement rights granted to them under the Stock Purchase Agreement among BST
Distribution, Inc., the Tepfers and the Company dated October 23, 2015. The Company had the obligation with respect to such
placement rights to assist the Tepfers in selling $1,500,000 in shares of common stock held by the Tepfers at a minimum price per
share of $1.20 each calendar quarter until the Tepfers had received $6,000,000 in total gross proceeds. If the Company was unable
to meet these obligations, the Company was required to issue the Tepfers additional shares of common stock, which would have
resulted in dilution for existing stockholders. Therefore, these placement rights had resulted in a derivative liability of
$1,855,000 on the Company's balance sheet as of March 31, 2016. The Tepfers also agreed to waive the bonus rights under their
respective employment agreements with the Company dated October 23, 2015 which provided for potential annual bonuses in a combined
amount exceeding $1,000,000. In exchange for agreeing to waive these placement rights and bonus rights, each of Brian Tepfer and
Scott Tepfer was granted the right to receive a quarterly bonus equal to 4.5% of quarterly gross EBITDA under the Company's new
Management Incentive Compensation Plan (the "Plan").
The Plan provides that each quarter that the Company meets certain gross EBITDA thresholds, participants will be eligible to
receive quarterly bonuses. The Plan is effective through September 2018. The Plan provides for minimum bonus eligibility thresholds
set at quarterly gross EBITDA levels that ensure that the Company will remain cash-flow positive and in compliance with all debt
covenants over the term after payment of bonuses. If the Company does not meet the minimum EBITDA threshold in a given quarter, no
bonus is payable under the Plan for that quarter. Bonuses will be subject to adjustment in the event the Company's year-end audit
results in restatement of a prior quarter's EBITDA.
About uSell.com, Inc.
uSell.com, Inc. is a technology driven company focused on extracting the maximum value from used mobile devices, at large scale.
uSell acquires products from both individual consumers, on its website, uSell.com, and from major carriers, big box retailers, and
manufacturers through its subsidiary, We Sell Cellular. These devices are then distributed globally, leveraging both a traditional
sales force and an online marketplace where professional buyers of used smartphones compete to buy inventory in an on-demand
fashion. Through participation on uSell's marketplace platforms and through interaction with uSell's salesforce, buyers can acquire
high volumes of inventory in a cost effective manner, while minimizing risk.
Visit www.uSell.com and http://wesellcellular.com.
Contact Information
Nik Raman Chief Executive Officer p212-213-6805 nik@usell.com
SOURCE: uSell.com, Inc.
