Item 2.02 Results of Operations and Financial Condition; Item 2.03 Creation of a
Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
Draw-down of Revolving Credit Facility
On December 29, 2022, Digital Media Solutions, LLC ("DMS" or the "Company"), a
subsidiary of Digital Media Solutions, Inc. (the "Company"), drew $35.0 million
under its $50 million senior secured revolving credit facility (the "Revolving
Facility"), which is maintained under our May 25, 2021 senior secured credit
facility (the "Credit Facility") with a syndicate of lenders ("Lenders"),
arranged by Truist Bank and Fifth Third Bank, as joint lead arrangers, and
Truist Bank, as administrative agent. Together with the previously disclosed
draw of $5.0 million on October 4, 2022, $40.0 million is currently outstanding
under our Revolving Facility. The Company intends to use the borrowings for
general corporate purposes, including certain acquisition opportunities that it
is considering. In the event that no acquisition opportunity is realized, the
Company intends to repay all or a substantial portion of the $35.0 million
draw-down. As of December 31, 2022, the Company had approximately $48.9 million
in cash on the unaudited consolidated balance sheet, inclusive of the draw-downs
under the Revolving Facility. The approximate cash amount as of December 31,
2022, is preliminary and subject to change as part of the Company's normal
fiscal year closing process, which has not yet been completed.
As of December 31, 2022, the effective interest rate on the borrowings under the
Revolving Facility was 8.6%. Under the Revolving Facility, DMS LLC pays a 0.50%
per annum commitment fee in arrears on the undrawn portion of the revolving
commitments.
Item 8.01 Other Events
Strategic Alternatives Update
As previously disclosed, on August 16, 2021, we commenced a process to evaluate
potential strategic alternatives to maximize shareholder value, and as part of
that process, have been evaluating a full range of strategic, operational and
financial alternatives. On September 8, 2022, our board of directors received an
offer from Prism Data, LLC, an investment vehicle affiliated with our CEO Joseph
Marinucci and our COO Fernando Borghese, to acquire all of our outstanding Class
A common stock of DMS for $2.50 per share in cash.
Our board of directors, together with its independent outside financial adviser
with respect to the Prism Data proposal, continues to engage in dialogue with
Prism Data and its financial adviser regarding the proposal as part of the
ongoing strategic alternatives process. In addition, as noted in Items 2.02/2.03
above, our board of directors is reviewing certain additional acquisition
opportunities as part of the strategic alternatives. There can be no assurance
that the Prism Data proposal, the other acquisition opportunities, or the
strategic alternatives process will result in any transaction, or any assurance
as to the outcome or timing of any such transaction.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of that term in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and are made in reliance upon the protections provided by such
acts for forward-looking statements. These forward-looking statements are often
identified by words such as "expect," "estimate," "project," "budget,"
"forecast," "anticipate," "intend," "plan," "may," "will," "could," "should,"
"believes," "predicts," "potential," "continue," and similar expressions. These
forward-looking statements include, without limitation, DMS's expectations with
respect to its future performance and its ability to implement its strategy, and
are based on the beliefs and expectations of our management team from the
information available at the time such statements are made. These
forward-looking statements involve significant risks and uncertainties that
could cause the actual results to differ materially from the expected results.
Factors that may cause such differences include, but are not limited to, those
disclosed under "Risk Factors" in DMS's Annual Report on Form 10-K and its
subsequent filings with the SEC. There may be additional risks that we consider
immaterial or which are unknown, and it is not possible to predict or identify
all such risks. DMS cautions that the foregoing list of factors is not
exclusive. DMS cautions readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made. DMS does not
undertake or accept any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements to reflect any change in
its expectations or any change in events, conditions or circumstances on which
any such statement is based.
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