ISDR Issuer Direct Corporation

Item 1.01 Entry into a Material Definitive Agreement.

On November 1, 2022 (the “Closing Date”), Issuer Direct Corporation, a Delaware corporation (the “Company”) entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Lead Capital, LLC, a Delaware limited liability company (the “Seller”), whereby the Company purchased all of the issued and outstanding membership interests of iNewsWire.com LLC, a Delaware limited liability company (“Newswire”). Newswire is a leading media and marketing communications technology company that provides press release distribution, media databases, media monitoring, and newsrooms through its Media Advantage Platform.

Under the terms of the Purchase Agreement and on the Closing Date, the Company paid to the Seller aggregate consideration of approximately $43.9 million, consisting of the following: (i) a cash payment of $18.0 million subject to a 60-day escrow to secure the payment of any working capital adjustments or any employee bonus obligations of Newswire; (ii) the issuance of a Secured Promissory Note in the principal amount of $22.0 million (the “Secured Note”); and (iii) the issuance of 180,181 shares of the Company’s common stock, par value $0.001 (the “Equity Payment”).

The Secured Note is due and payable on November 8, 2023 (the “Maturity Date”) and bears an annual interest rate of 6%. The Secured Note is secured by the intellectual property (with certain exceptions) and the domain names acquired by the Company as part of the acquisition. The Secured Note may be prepaid, however, the 6% interest payment is guaranteed through the Maturity Date even if prepayments are made.

The Equity Payment is valued at approximately $3.9 million based on the Company’s closing stock price of $21.60 on the Closing Date.

The Purchase Agreement and the transaction contemplated thereby were not subject to approval by the shareholders of the Company. The Purchase Agreement contains certain representations and warranties regarding the Seller and the Newswire business and certain more limited representations and warranties regarding the Company. Except for fraud and certain tax liabilities, the Company’s recovery right under the indemnification provisions of the Purchase Agreement are limited solely to a representation and warranty insurance policy with an aggregate coverage amount of $12.9 million and a retention amount of $0.4 million. The Seller and its managing member agreed to 4-year non-compete provisions as part of the Purchase Agreement.

This summary of certain terms of the Purchase Agreement and Secured Note do not purport to be complete and are subject to, and qualified in its entirety by, the full text of the Purchase Agreement and Secured Note, copies of which are attached hereto as Exhibit 10.1 and 10.2, respectively, and are hereby incorporated into this Current Report on Form 8-K (this “Form 8-K”) by reference.

The Purchase Agreement has been included solely to provide investors and security holders with information regarding its terms. It is not intended to be a source of financial, business or operational information, or to provide any other factual information, about Newswire, the Seller or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Purchase Agreement are made only for purposes of the Purchase Agreement and are made as of specific dates; are solely for the benefit of the parties (except as specifically set forth therein); may be subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Purchase Agreement; and may be subject to standards of materiality and knowledge applicable to the contracting parties that differ from those applicable to investors or security holders. Investors and security holders should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of Newswire, the Seller or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, as applicable, which subsequent information may or may not be fully reflected in public disclosures.