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Section 1: 8-K (FORM 8-K)













Date of Report (Date of earliest event reported):

May 15, 2019


Commission File Number: 0-29923


CUI Global, Inc.

(Exact Name of registrant as specified in Its Charter)






   (State or jurisdiction of


(I.R.S. Employer

   incorporation or organization)


Identification No.)


   20050 SW 112th Avenue, Tualatin, Oregon



   (Address of Principal Executive Offices)


(zip code)


(503) 612-2300

(Registrant’s telephone number)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):



Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a- 12)



Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.1 4d-2(b))



Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company ☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.001 par value


Nasdaq Capital Market





Item 8.01     Other Events.


On May 15, 2019, CUI Global, Inc. (“Registrant”, “CUI”, “we”, or “our”) filed a press release to announce the entry into a non-binding letter of intent, dated May 6, 2019, relating to a business combination with Nikola, LLC. Copies of the press release and non-binding letter of intent are included herewith as Exhibits 99.1 and 99.2, which are incorporated herein by reference.


The non-binding letter of intent anticipates that we will enter into an acquisition agreement with a newly formed entity, Nikola LLC, as the parent company of four wholly owned subsidiaries. The consideration for this intended acquisition includes: a combination of cash, seller debt, and equity (“Potential Transaction”).


The Potential Transaction contemplates that we will issue shares representing approximately 85% ownership of CUI on a post transaction basis, plus cash consideration of $30 million payable at closing, plus $45 million as evidenced by a 1-year unsecured promissory note at 6.0% annualized interest paid quarterly in cash, plus assumption of $15 million in indebtedness. Additionally, the terms contemplate a potential earn out of an additional aggregate consideration of up to $200 million in cash payable over five years that is contingent on our consolidated post-closing EBITDA. The Potential Transaction, if consummated, will result in the equity holders of Nikola, LLC obtaining voting control over CUI.


Some of the risks and uncertainties relating to the Potential Transaction include, but are not limited to:


There is no assurance that we will consummate the Project Nikola transaction for a variety of reasons, including but not limited to: (i) completion of acceptable due diligence procedures; (ii) inability to consummate the financing on acceptable terms; (iii) failure to obtain required regulatory approvals or third party consents; (iv) the parties being unable to finalize or agree to definitive terms and conditions as described in the non-binding letter of intent; (v) failure to obtain the required audited financial statements of the Nikola entities in conformity with Regulation S-X and (vi) our shareholders not approving the transaction.

The market price for shares of our common stock following the completion of the acquisition may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of CUI common stock.

CUI stockholders will have substantially reduced ownership and voting interest in and will exercise less influence over management of the combined company.

Whether or not the acquisition is completed, the announcement and pendency of the acquisition could cause disruptions in the businesses of CUI, which could have an adverse effect on our financial results.





CUI will incur significant transaction, acquisition-related and restructuring costs in connection with the acquisition.

Combining the businesses of CUI and the acquired Nikola subsidiaries may be more difficult, costly or time-consuming than expected.

New debt covenants will limit our financial flexibility.

If we fail to maintain proper and effective internal control over the financial reporting of the acquired subsidiaries, their ability to produce accurate and timely financial statements could be impaired which could cause investors to lose confidence in our financial reporting and the trading price of the combined company’s common stock may decline.

Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the acquisition.



Item 9.01          Financial Statements and Exhibits.






Press Release, dated May 15, 2019.



Non-binding letter of intent between CUI Global, Inc. and Nikola, LLC, dated May 6, 2019 (furnished with the Commission as a part of this Form 8-K).

99.3 Presentation on Proposed Transaction to Create a Diversified Energy Services Company (“Pro Forma CUI”).


Information contained on the Registrant’s website is not incorporated by reference into this Current Report on Form 8-K. The information in the preceding paragraphs, as well as Exhibits 99.1 and 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section. It may only be incorporated into another filing under the Exchange Act or the Securities Act of 1933 if such subsequent filing specifically references Section 8.01 of this Current Report on Form 8-K. All information in the press release speaks as of the date thereof, and the Registrant does not assume any obligation to update such information in the future. In addition, the Registrant disclaims any inference regarding the materiality of such information which otherwise may arise as a result of its furnishing such information under Item 8.01 of this report on Form 8-K.




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Signed and submitted this 15th day of May 2019.



CUI Global, Inc.




   /s/ Daniel N. Ford


        Daniel N. Ford


        Chief Financial Officer




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Section 2: EX-99.1 (EXHIBIT 99.1)


Exhibit 99.1



CUI Global Enters Into Non-Binding Letter of Intent to Acquire Four Companies

-Transformational Transaction to Create Diversified Energy Services Company-

-Pro Forma CUI Global to be Led by former Quanta Services CEO Jim O’Neil-


TUALATIN, Ore., May 15, 2019 -- CUI Global, Inc. (NASDAQ: CUI) (“the Company”), today announced the execution of a non-binding Letter of Intent to acquire 100% of the outstanding stock of four privately-held companies for consideration consisting of cash, seller debt, and CUI Global equity.


Description of Pro Forma CUI

The combination of CUI Global (“Pro Forma CUI”) as the public company platform with four privately-held companies will create a diversified energy services company addressing an estimated $184 billion in annual spend1 in the U.S. mid-stream/mid-and down-stream sector of the oil and gas industry. The senior management team of Pro Forma CUI will consist of seasoned industry leaders, including new CEO and Vice-Chairman, Jim O’Neil; President and General Counsel, Bill Clough; Rusty Brown, former Executive VP of Corporate Development for Shaw Group, and others to be named later.    


Management Commentary

“This proposed transaction will immediately transform CUI Global into a much larger company with annual revenues of approximately $350 million and EBITDA of approximately $43 million on a pro forma basis for 2019, and that is committed to a near-term acquisition strategy designed to continue to grow EBITDA to approximately $180 million within 18-months after closing,” said William J. Clough, president and CEO of CUI Global. “Having established a presence for CUI Global in the U.S. energy market at our Orbital facility in Houston, we are thrilled to present our shareholders with an opportunity to enhance the company’s valuation in the future. With Jim O’Neil at the helm, executing his vision for a transformed CUI Global and leveraging his extensive experience as an integrated infrastructure solutions provider for the electric power, oil & gas and telecommunication industries, the new CUI Global will be positioned to chart a path of long-term value creation for our shareholders.”





Proposed Transaction Highlights

The Terms of the Letter of Intent contemplate a total consideration for the transaction consisting of: the issuance of ~160 million shares of CUI Global stock; $30 million in cash; a $45 million 1-year unsecured sellers note; the assumption of $15 million of sellers outstanding secured debt and an earn-out payable over 5 years of up to $200 million, depending on certain specific performance criteria. Closing the transaction is subject to completion of due diligence, negotiation of a definitive merger agreement, customary closing conditions and the approval of CUI Global shareholders. Upon completion of the transaction, CUI Global shareholders will own approximately 15% of the stock of the combined company. The parties contemplate entering into a definitive agreement in connection with the transaction on or before June 1st, 2019.


CUI Global expects to finance the cash contribution of the transaction through debt financing. The Company is being assisted and represented by B. Riley FBR, Inc.; the selling companies are represented by Sanjiv Shah and David Faherty of Simmons Energy | A Division of Piper Jaffray.



1Conglin Xu, “US oil, gas industry capital spending to increase in 2018,” Oil and Gas Journal, March 5, 2018.


About CUI Global, Inc.

Delivering Innovative Technologies for an Interconnected World . . . . .


CUI Global, Inc. is a publicly traded company dedicated to maximizing shareholder value through the acquisition and development of innovative companies, products and technologies. From Orbital Gas Systems' advanced GasPT2 platform targeting the energy sector, to CUI Inc.’s digital power platform serving the networking and telecom space, CUI Global and its subsidiaries have built a diversified portfolio of industry leading technologies that touch many markets. As a publicly traded company, shareholders are able to participate in the opportunities, revenues, and profits generated by the products, technologies, and market channels of CUI Global and its subsidiaries. But most importantly, a commitment to conduct business with a high level of integrity, respect, and philanthropic dedication allows the organization to make a difference in the lives of their customers, employees, investors and global community.


For more information please visit


About the Proposed Acquisition Targets

Target 1 provides critical maintenance and repair services to downstream and midstream companies in the oil & gas industries. Services include scheduled turnarounds and emergency outages; piping and welding and tower installation and replacement. Customers include Fortune 100 and 500 energy companies such as: ExxonMobil and Motiva.






Target 2 is a diversified infrastructure services provider supporting utility, oil and gas and other industries with power generation and electrical installation and construction services. Customers include Fortune 100 and 500 companies such as: BP, OG+E, Noble Energy, and more.


Target 3 is an industrial services firm focused on insulation and related services across a wide range of industries throughout North America and the Caribbean. Customers include: KBR, Kiewit, Gulf Island Fabrication, and others.


Target 4 is a wireless telecommunications firm focused on site acquisition activities and construction for the wireless industry that operates in the Southeastern United States and Puerto Rico. Customers include: AT+T, MasTec, Nokia, Verizon, and more.    




Important Cautions Regarding Forward Looking Statements


The release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations, opinion, belief or forecasts of future events and performance. A statement identified by the use forward-looking words including “will,” “may,” “expects,” “projects,” “anticipates,” “plans,” “believes,” “estimate,” “should,” and certain of the other foregoing statements may be deemed forward-looking statements. Although CUI believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. We may experience significant fluctuations in future operating results due to a number of economic, competitive, and other factors, including, among other things, our reliance on third-party manufacturers and suppliers, government agency budgetary and political constraints, new or increased competition, changes in market demand, and the performance or reliability of our products. These factors and others could cause operating results to vary significantly from those in prior periods, and those projected in forward-looking statements. Additional information with respect to these and other risk factors, which could materially affect us and our operations, are included in our Annual Report on Form 10-K and other filings with the SEC, including the Form 8-K to which this press release is attached, available at the SEC’s website at Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. We take no obligation to update or correct its own forward-looking statements, except as required by law, or those prepared by third parties that are not paid for by the Company.



Media Contact:                

External IR Counsel:

CUI Global, Inc.       

LHA Investor Relations

Jeff Schnabel             

Sanjay M. Hurry

Main: 503-612-2300     


[email protected]     

[email protected]




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Section 3: EX-99.2 (EXHIBIT 99.2)


Exhibit 99.2


May 1st, 2019





Delivered via email


Sanjiv Shah

Managing Director, Simmons Energy

609 Main Street, Ste. 3800

Houston, Texas 77002

[email protected]

[email protected]


RE: Purchase Offer Outline to “Project Nikola” owners from CUI Global Inc. (NASDAQ:CUI).





Thank you for your time and effort in the discussion of a potential transaction (“Transaction”) between CUI-Global Inc. (“CUI”) and our quest to effect an acquisition “roll-up” of Signature Associates, LLC; Fusion Industries, LLC; Land Coast Insulation, Inc.; and Castille Telecom, LLC (collectively hereafter: “PROJECT NIKOLA”).


CUI agrees and has engaged B. Riley FBR & Co. (“BRFBR”) which is a leading middle market broker dealer, investment bank and principal investment fund for its review of providing a suitable Pubco with enough cash funding to close on the purchase of PROJECT NIKOLA. BRFBR is a publicly traded broker-dealer with extensive experience in M&A, capital raising, equity research and direct investment activities, besides owning a subsidiary, Great American Group, who is the nation’s premier asset valuation and disposition service.


CUI proposes to purchase PROJECT NIKOLA for a combination of cash, seller debt, and CUI equity (described below) in what we believe would be potentially favorable capital gain (entity) purchase transaction. There would be a combination of shares representing 85% ownership in the pro forma combined CUI entity (the “Stock Consideration”), plus a cash component with $30 million (the “Cash Consideration”), plus $45 million paid out in a 1-year unsecured seller note (the “Seller Note”) plus the assumption of PROJECT NIKOLA’s outstanding debt (the “Debt Assumption”), plus up to $200 million in aggregate contingent earnout payments payable over five years (the “Earnout Consideration”), outlined below. This will allow PROJECT NIKOLA’s key owners to be part of the operating team, strategically assisting in developing the direction and vision for the new entity.


The cash component of the purchase will be made via CASH available from CUI with moderate leverage. CUI is confident in the Transaction, believes it can close, and will ultimately benefit all parties – a true “win-win” transaction.


At this time, we are highly interested in moving forward with the Transaction, and I am pleased to present this non-binding Purchase Offer.


The specific terms of our proposal are as follows:




Purchase Price At Closing: Subject to confirmatory due diligence and receipt of audited financials, CUI is prepared to purchase up to 100% of the PROJECT NIKOLA ownership for a consideration including:

(i) Stock Consideration: shares representing 85% ownership in the combined company on a fully diluted basis; plus

(ii) Cash Consideration: $30 million in cash at closing in US dollars; plus

(iii) Seller Note: $45 million paid out in a 1-year unsecured note payable carrying 6.0% annualized interest (paid quarterly in cash); plus

(iv) Debt Assumption: the assumption of PROJECT NIKOLA’s outstanding consolidated indebtedness at closing (including, without limitation, bank debt, capital leases and other lines of credit).








Earnout Consideration: In addition to Purchase Price At Closing, CUI agrees to pay PROJECT NIKOLA additional aggregate consideration of up to $200 million in cash payable over five years that is contingent on CUI consolidated financial results meeting the below-mentioned conditions (see Exhibit A for illustrative examples of such earnout computations).



2H 2019: An earnout payment equal to the greater of $0 and the difference between CUI consolidated Adjusted EBITDA generated (pro forma for acquisitions) in 2H 2019 and $15 million (“2H 2019 EBITDA Hurdle”);



2020, 2021, 2022, 2023: An earnout payment equal to the greater of $0 and the difference between CUI consolidated Adjusted EBITDA generated (pro forma for acquisitions) in the applicable fiscal year and $35 million (“Annual EBITDA Hurdle”);



1H 2024: An earnout payment equal to the greater of $0 and the difference between CUI consolidated Adjusted EBITDA generated (pro forma for acquisitions) in the fiscal 1H 2023 and $17.5 million (“1H 2024 EBITDA Hurdle”);



Additional Acquisitions: In the event CUI acquires an additional entity (“Target”), the 2H 2019 Hurdle EBITDA, Annual EBITDA Hurdle and 1H 2024 EBITDA Hurdle (collectively “EBITDA Hurdles”), shall be increased by an incremental amount (“EBITDA Hurdle Adjustment”) equal to 50% of the Target’s trailing twelve month (“TTM”) Adjusted EBITDA;



EBITDA Hurdle Adjustments shall only apply to future earnout periods and the effect shall be cumulative if multiple Targets are acquired.



The earnout payments will be subject to all indebtedness of CUI. If CUI does not have sufficient cash available when any earnout payment is due, CUI may, instead make such earnout payment in CUI shares rather than cash or defer the payment based on good faith negotiations between the parties.



Corporate Governance: Upon closing, CUI shall increase its authorized Board Members from eight (8) to nine (9) Directors and four (4) additional Directors shall be appointed by PROJECT NIKOLA on a temporary basis to stand for election at the next regularly scheduled Shareholders’ Meeting.



Sources of Financing: In addition to the other capital resources available to CUI as described above, CUI intends to make this purchase via BRFBR support to raise additional funds in either the equity or debt capital markets, as needed.



Timetable and Due Diligence: CUI has completed substantially all of its commercial due diligence of PROJECT NIKOLA, but will require a period of confirmatory due diligence and formal legal opinions and closing documentations that are customary for a transaction of this nature, including confirmation of the current audited statements of PROJECT NIKOLA being acceptable to our auditors and other reasonable due diligence. Nevertheless, it is our goal to close said transaction promptly.



A/P, A/R, Cash-on-Hand: The parties agree that reasonable negotiation, accommodation, and resolution of A/P, A/R, and excess cash-on-hand shall be resolved before closing.



Exclusivity-No Shop: CUI is confident and plans to execute a focused diligence effort in an expeditious timeframe. CUI is prepared to devote significant time and resources to complete this transaction and is ready to draft legal document and its various diligence efforts upon the execution of this agreement; therefore, from acceptance of this offer, and for thirty (30) days thereafter, PROJECT NIKOLA will not solicit, or negotiate for its sale by any party other than CUI and will not disclose this offer to anyone besides PROJECT NIKOLA’s principals, and/or its advisors. Notwithstanding anything in this Section 7 to the contrary, PROJECT NIKOLA will not be prohibited from negotiating with potential capital partners for additional investments, so long as such investments would not cause a change of control in PROJECT NIKOLA. Additionally, all parties agree to keep this agreement and its contents confidential until such time as all parties agree to make such information public.



Non-Binding Obligations: This agreement creates no legally binding obligations (other than the above “No Shop” provision in Section 7 above) by any party, as those will be subject to further definitive agreement.



Fees and Expenses: Except as otherwise provided in a definitive agreement, CUI and PROJECT NIKOLA will pay their respective fees, and expenses (including those of legal counsel, accountants, investment bankers, and other representatives) incurred in connection with the Transaction.








Time is of the essence: This proposed offer must be accepted no later than close-of-business on Tuesday, May 3rd, 2019.


CUI is excited about this Transaction’s prospects and the meaningful benefits it should generate for the Companies and their respective stakeholders. CUI is confident in its ability, along with its engagement with BRFBR, to complete the Transaction promptly.














/s/ William J. Clough




William Clough, Chairman & CEO







Agreed and Accepted to this 6th of May 2019



/s/ Michel Moreno                        


By:  Michel Moreno                           

Title:  Manager                             




20050 SW 112th Avenue ● Tualatin, Oregon 97062







(Dollar amounts in millions)



EBITDA Hurdles¹

2H 2019










1H 2024


¹ Plus EBITDA Hurdle Adjustments.



Examples with no Acquisitions:




CUI 2H 2019 EBITDA = $30


2H 2019 earnout payment = $30 - $15 = $15




CUI 2021 EBITDA = $50


2021 earnout payment = $50 - $35 = $15


Examples with Acquisitions




CUI 2020 EBITDA = $50

Target 2020 EBITDA = $20

Pro Forma 2020 EBITDA $70


Target TTM EBITDA = $20

EBITDA Hurdle Adjustment = 50% x $20 = $10

2020 EBTIDA Hurdle = $35 + $10 = $45


2020 earnout payment = $70 - $45 = $25




CUI 2020 EBITDA = $50

Target 2020 EBITDA = $40

Pro Forma 2020 EBITDA = $50 + $40 = $90


Target TTM EBITDA = $20

EBITDA Hurdle Adjustment = 50% x $20 = $10

2020 EBTIDA Hurdle = $35 + $10 = $45


2020 earnout payment = $90 - $45 = $45


Note: If Target is acquired during a given year (versus January 1st), then only Target’s EBITDA after closing is included in consolidated CUI Adjusted EBITDA. EBITDA Hurdle Adjustment is made to next earnout period (and not to the current earnout period during which the Target is acquired).



20050 SW 112th Avenue ● Tualatin, Oregon 97062

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Section 4: EX-99.3 (EXHIBIT 99.3)

Image Exhibit

Exhibit 99.3




















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