DENVER and JACKSONVILLE, Fla., Dec. 21, 2018 (GLOBE NEWSWIRE) -- Glowpoint, Inc. (NYSE American: GLOW) (“Glowpoint”), a managed
service provider of video collaboration and network applications, and SharedLabs, Inc. (“SharedLabs”), a privately held software
and technology services company located in Jacksonville, Florida, today announced that they have entered into a definitive merger
agreement (the “Merger Agreement”) for the merger of Glowpoint and SharedLabs in an all-stock transaction. Pursuant to the Merger
Agreement, SharedLabs will merge with and into a direct wholly-owned subsidiary of Glowpoint, with SharedLabs surviving the merger
as a wholly-owned subsidiary of Glowpoint. In consideration therefor, subject to the terms and conditions set forth in the
Merger Agreement, Glowpoint will issue an aggregate of 112,802,326 shares of Glowpoint common stock, subject to certain adjustment
factors included in the Merger Agreement and described below. The shares of Glowpoint common stock to be issued in the transaction
will be registered with the Securities and Exchange Commission (the “SEC”) pursuant to a Registration Statement on Form S-4
expected to be filed with the SEC by Glowpoint in the first quarter of 2019. The transaction was unanimously approved by the Board
of Directors of each of Glowpoint and SharedLabs. Upon completion of the proposed merger, the name of the merged company is
anticipated to be “Glowpoint, Inc.” and the company is expected to continue to trade on the NYSE American under the ticker symbol
“GLOW.” The combined company will maintain its headquarters in Jacksonville, Florida. Jason Cory, the current CEO of SharedLabs,
will be the CEO of the combined company.
The business combination of Glowpoint and SharedLabs, which on a combined basis generated total unaudited
revenue of approximately $86 million for the twelve month period ending September 30, 2018, will combine two highly capable
businesses with strong growth opportunities, and is expected to create a business model with increasing recurring revenue, a
diversified customer base, and significant global reach; and is expected to result in the creation of a powerful software and
technology services provider with comprehensive products and capabilities spanning managed, outsourced, and cloud services
offerings.
“We are extremely excited about the proposed transaction with SharedLabs and the transformative opportunities
the combination creates for us. SharedLabs has a strong brand, management and board along with an attractive market. We believe the
combination will enhance the business and efficiency opportunities for both companies, and provides a structure for future
expansion, organically or by opportunistic acquisitions of complementary assets in attractive markets, and the opportunity for
enhanced shareholder value for the combined institution,” said Pete Holst, president and chief executive officer of Glowpoint.
“When we first announced the possibility of this transaction, we were bullish on the combined companies’
capabilities, and after deep due diligence and seeing what is really under the hood, we are even more excited to complete this
transaction. This really is a case of two world class technology companies, which when combined, will become a global leader in
digital transformation and enablement, with substantial opportunities to capitalize on the rapid evolution of digital
technologies,” said Jason Cory, chief executive officer of SharedLabs. “Our differentiated solutions in software and applications,
web and digital, cloud, IoT, security, data and analytics combined, coupled with the highly scalable services platform Glowpoint
offers, will provide an incredible opportunity for the combined company to extend capabilities into new and high-growth emerging
markets. Along with the combined teams’ talented people, and our relentless focus on execution, the new Glowpoint will have
unparalleled opportunities for scale, a comprehensive suite of solutions, and the worldwide reach to make us the technology
industry’s global partner of choice. I am excited about leading the new Glowpoint as its president and chief executive officer upon
the closing of this transaction.”
About the Proposed Merger
Under the terms of the Merger Agreement, Glowpoint will issue an aggregate of 112,802,326 shares of Glowpoint
common stock in exchange for 100% of the equity securities of SharedLabs. The shares of Glowpoint common stock to be issued in the
merger are subject to certain adjustment factors based upon the completion by SharedLabs of a private placement of equity
securities for at least $5 million of net cash proceeds and on other terms set forth in the Merger Agreement (the “SharedLabs
Equity Financing”), the execution of one or more term sheets by SharedLabs with lending institutions for one or more credit
facilities aggregating not less than $16 million in borrowing capacity subject to a maximum interest rate (the “SharedLabs Term
Sheet”), the working capital of each of Glowpoint and SharedLabs at closing compared to certain agreed upon metrics and certain
other aspects of SharedLabs’ balance sheet at closing compared to certain agreed upon metrics. Subject to these adjustment factors,
upon consummation of the proposed merger, the stockholders of Glowpoint existing prior to the transaction would collectively own an
approximately 34% interest in the combined company and the stockholders of SharedLabs existing prior to the transaction would
collectively own an approximately 66% interest in the combined company.
Glowpoint and SharedLabs, subject to stockholder and required regulatory approvals, expect to finalize the
merger in the spring of 2019. The closing will be subject to, among other closing conditions, the receipt of all required approvals
of the stockholders of Glowpoint and SharedLabs and any required third-party consents and regulatory clearances, including receipt
of required approvals from the NYSE American, the effectiveness of a Registration Statement on Form S-4 registering the shares of
Glowpoint common stock to be issued in the merger, the completion of the SharedLabs Equity Financing, the execution by SharedLabs
of the SharedLabs Term Sheet, the satisfaction and termination prior to closing of all contracts or other agreements to which
SharedLabs is a party that provide a counterparty with redeemable or contingent common stock or a guaranteed return, the redemption
of each share of issued and outstanding redeemable SharedLabs common stock, and other customary closing conditions. If SharedLabs
fails to meet its obligations under either the debt or equity financing closing conditions, Glowpoint may elect to proceed to close
the merger with a reduction in the shares of its common stock to be issued to SharedLabs’ stockholders in the transaction, on terms
set forth in the Merger Agreement.
Pursuant to the merger agreement, Glowpoint’s board of directors will consist of seven members after the
completion of the merger, of which one member may be appointed by the members of Glowpoint’s board existing prior to closing and
the remaining members will be appointed by the members of SharedLabs’ board existing prior to closing.
The Merger Agreement includes a 45-day “go-shop” provision that allows Glowpoint and its advisors to actively
solicit and negotiate with other potential acquirers to determine whether they are interested in making a proposal to acquire
Glowpoint. Accordingly, Glowpoint will solicit competing acquisition proposals through February 3, 2019.
Advisors
Arnold & Porter is acting as legal advisor to Glowpoint and Holland & Knight LLP is acting as legal advisor to
SharedLabs.
Additional Information and Where to Find It
Glowpoint will prepare and file with the SEC a Current Report on Form 8-K which will include as exhibits this
press release and the Merger Agreement, as executed by Glowpoint and SharedLabs. The Form 8-K will contain important information
about the proposed business combination and related matters.
This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell
any securities or a solicitation of any vote or approval, nor shall there be any offer or sale of such securities in any state or
other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such state or other jurisdiction. This communication relates to a proposed business combination
between Glowpoint and SharedLabs.
In connection with the proposed transaction, Glowpoint intends to file with the SEC a registration statement on
Form S-4 that will include a proxy statement of Glowpoint that also constitutes a prospectus of Glowpoint. Glowpoint also plans to
file other relevant documents with the SEC regarding the proposed transaction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. This communication is
not intended to and does not constitute an offer to sell or the solicitation of an offer to buy any securities or the solicitation
of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise. Any definitive
proxy statement/prospectus of Glowpoint will be mailed to stockholders of Glowpoint if and when available.
INVESTORS AND SECURITY HOLDERS OF GLOWPOINT AND SHAREDLABS ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of these documents (if and when available) and
other documents containing important information about Glowpoint and SharedLabs, once such documents are filed with the SEC through
the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Glowpoint will also be
available free of charge on Glowpoint’s website at www.glowpoint.com.
Participants in the Solicitation
Glowpoint, SharedLabs and certain of their respective directors, executive officers and other persons may be
deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the
directors and executive officers of Glowpoint is available in its definitive proxy statement for its 2018 annual meeting, filed
with the SEC on April 23, 2018. Other information regarding the participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when such materials become available. Investors should read the proxy
statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free
copies of these documents from Glowpoint or SharedLabs using the sources indicated above.
About Glowpoint
Glowpoint, Inc. (NYSE American: GLOW) is a managed service provider of video collaboration and network
applications. Glowpoint’s services are designed to provide a comprehensive suite of automated and concierge applications to
simplify the user experience and expedite the adoption of video as the primary means of collaboration. Glowpoint’s customers
include Fortune 1000 companies, along with small and medium sized enterprises in a variety of industries. To learn more please
visit www.glowpoint.com.
About SharedLabs
Headquartered in Jacksonville, Florida, SharedLabs is a software and technology services company providing a
broad range of software, digital, cloud, and security services to both commercial and government clients which enable businesses to
innovate and compete in today’s competitive marketplaces. A respected partner to many of the largest technology companies in the
world, SharedLabs creates, supports, implements, and manages the software, infrastructure, and e-commerce systems which drive
today’s digital world.
Forward Looking and Cautionary Statements
This press release and any oral statements made regarding the subject of this release contain forward-looking
statements as defined under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical facts, that address activities that Glowpoint or SharedLabs assumes, plans,
expects, believes, intends, projects, estimates or anticipates (and other similar expressions) will, could, should or may occur in
the future are forward-looking statements. Glowpoint’s and SharedLabs’ actual results may differ materially from their
expectations, estimates and projections, and consequently you should not rely on these forward-looking statements as predictions of
future events. Without limiting the generality of the foregoing, forward-looking statements contained in this press release include
statements regarding Glowpoint’s and SharedLabs’ future performance and the anticipated financial impacts of the business
combination, the success of any business development initiatives to be pursued by Glowpoint or SharedLabs, the satisfaction of the
closing conditions to the business combination, including the debt and equity financings to be pursued by SharedLabs, and the
timing or success of the completion of the business combination. The forward-looking statements in this press release are based on
management’s current belief, based on currently available information, as to the outcome and timing of future events, and involve
significant factors, risks, and uncertainties that may cause actual results in future periods to differ materially from such
statements. Most of these factors are outside of the control of Glowpoint or SharedLabs and are difficult to predict, and include,
among other things, (1) the occurrence of any event, change or other circumstances that could cause the termination of the Merger
Agreement; (2) the outcome of any legal proceedings that may be instituted against Glowpoint or SharedLabs following this
announcement and the pursuit of the business combination contemplated by the Merger Agreement; (3) the inability to complete the
business combination, including due to failure to obtain approval of the shareholders of Glowpoint or SharedLabs or failure to
satisfy any other conditions to closing included in the Merger Agreement; (4) risks related to SharedLabs’ equity and debt
financing conditions to closing; (5) the risk that the pursuit or execution of the business combination will disrupt current plans
and operations as a result of the announcement and consummation of the business combination; (6) the ability to recognize the
anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of the
combined company to grow and manage growth profitably and retain its key employees; (7) costs related to the negotiation and
consummation of the business combination; (8) risks related to the disruption of the transaction to the parties and their
management; (9) the effect of the announcement of the Merger Agreement on the parties’ ability to retain and hire key personnel and
maintain relationships with customers, suppliers and other third parties; and (10) other risks and uncertainties identified in
Glowpoint’s and SharedLabs’ filings with the SEC, including in Glowpoint’s Annual Report on Form 10-K for the year ending December
31, 2017 and in other filings made by Glowpoint with the SEC from time to time, including Glowpoint’s Quarterly Report on Form 10-Q
for the three months ended September 30, 2018, and including in SharedLabs’ Form S-1 Registration Statement filed May 15, 2018
(File No. 333-224954) (including all amendments thereto) and in other filings made by SharedLabs with the SEC from time to time.
The foregoing list of factors is not exclusive. Glowpoint and SharedLabs caution readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made. Any of these factors could cause Glowpoint’s and SharedLabs’
actual results and plans to differ materially from those in the forward-looking statements. Therefore, Glowpoint and SharedLabs can
give no assurance that their future results will be as estimated. Glowpoint and SharedLabs do not intend to, and disclaim any
obligation to, correct, update or revise any information contained herein to reflect any change in expectations or any change in
events, conditions or circumstances on which any such statement is based, other than as required by applicable law.
