Spindle, Inc. (OTCPK:SPDL) entered into an asset purchase agreement to acquire the assets of Yowza International, Inc. from Pasadena Angels, Tech Coast Angels Inc. and others for $3.4 million on December 9, 2013. The consideration will be $0.5 million in cash to the holders of certain outstanding promissory notes issued by Yowza and an aggregate of 1.64 million unregistered shares of Spindle's voting common stock (share consideration) issuable to the holders of Yowza's outstanding capital stock; provided, however, that 10% of the share consideration shall be issued to certain Executive management members and advisors of Yowza in accordance with consulting or employment agreements and subject to certain vesting provisions. In addition, an aggregate of 0.2 million shares of common stock (the indemnification escrow), representing 12% of the share consideration, will be held in escrow for a period of one year from the date of the closing. The indemnification escrow will be available to compensate Spindle pursuant to the indemnification obligations of Yowza under the agreement, and for any necessary accounts receivable adjustment after the closing date in the event Spindle is unable to collect the acquired outstanding accounts receivable of Yowza within 120 days after the closing date.

Spindle will also assume certain specified liabilities to be determined upon the closing of the transaction contemplated by the agreement, not to exceed the amount of accounts receivable of Yowza acquired by Spindle by more than $0.015 million. Upon completion of the transaction, Spindle expects to integrate Yowza's services with its MeNetwork platform. Post acquisition, Yowza headquarters will belong to Spindle and Spindle will pick up some of the staff of Yowza.

This transaction is subject to shareholder approval, dissenter's rights, non-competition agreement, non-solicitation agreement, consulting agreement, escrow agreement and is expected to close by the end of the year.

Manhattan Transfer Registrar Co. acted as escrow agent in the transaction. Ryan Azlein of Stubbs Alderton & Markiles, LLP acted as legal advisor to Yowza International. Kevin Friedmann of Richardson & Patel, LLP acted as legal advisor to Spindle.

Spindle, Inc. (OTCPK:SPDL) completed the acquisition of substantially all of the assets of Yowza International, Inc. from Pasadena Angels, Tech Coast Angels Inc. and others on January 3, 2014.