SCHEDULE 13E-3

(Rule 13e-100)

Transaction Statement Under Section 13(e) of the Securities
Exchange Act of 1934 and Rule 13e-3 Thereunder

SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON DC 20549 

Rule 13e-3 Transaction Statement
Under Section 13(e) of the Securities Exchange Act of 1934

SPEED COMMERCE, INC.

(Name of the Issuer)

Speed Commerce, Inc.

(Names of Persons Filing Statement)

Common Stock

(Title of Class of Securities)

639208107

(CUSIP Number of Class of Securities)

Dalton Edgecomb

Interim Chief Executive Officer

1303 East Arapaho Road, Ste. 200

Richardson, TX 75081

(214) 258-0100

(Name, Address and Telephone Number of Person Authorized to Receive

Notices and Communications on Behalf of the Persons Filing Statement)

with copies to:

Winthrop & Weinstine, P.A.

225 South Sixth Street, Suite 3500

Minneapolis, Minnesota 55402

(612) 604-6400

Attention: Philip T. Colton, Esq.

   Evan C. Sheets, Esq.

This statement is filed in connection with (check the appropriate box):

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☐

Check the following box if the filing is a final amendment reporting the results of the transaction: ☐

Calculation of Filing Fee

☐ Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) of the Securities Exchange Act of 1934 and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

INTRODUCTION

This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the “Schedule 13E-3”) is being filed by Speed Commerce, Inc., a Minnesota corporation (“Speed Commerce”, the “Company”, “we”, or “our”), in connection with a “going private” transaction. Our board of directors (“Board”) has approved a 1-for-16 share combination (the ”Reverse Split”). Shareholders that would otherwise own only a fraction of a share of our common stock following the Reverse Split will have such fractional shares cancelled and converted into the right to receive the cash consideration described herein. The entire going private transaction, including the Reverse Split and the payment of cash to shareholders who would otherwise have held a fractional share after the Reverse Split, is referred to below as the “Transaction.”

As a result of the Transaction, each share of our common stock held of record or beneficially by a shareholder owning fewer than sixteen (16) shares of our common stock a pre-split basis on February 19, 2016, the record date of the Reverse Split, will be converted into the right to receive $0.01 per pre-split share, without interest.

The purpose of the Transaction is to reduce the number of record holders of our common stock below 300 so that we will be eligible to terminate the registration of our common stock under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In such case, we will no longer be required to file periodic reports with the Securities and Exchange Commission (the “SEC”), or be subject to the reporting or other obligations under the Exchange Act and our stock will not be traded publicly. The deregistration of our common stock will have the effect of terminating the quotation of our common stock on OTC Markets Group’s OTC Pink market.

The Company is under extreme financial distress and its projections indicate that this situation will degrade further without substantial additional restructuring initiatives, ultimately resulting in an inability to continue the Company’s operations absent additional financing which is not currently available to the Company. The cash currently available to the Company is not sufficient to support the Company’s operations other than for a limited period. As a result, the Company may be required in the near future to cease operations or explore other legal options. The value of the Company’s assets and management’s projections with respect to discounted future cash flows indicate that the Company’s value is less than the current balance of the Company’s debt. Due to financial condition and lack of remedies available to the Company, management of the Company has concluded that there is substantial doubt about the Company’s ability to continue as a going concern.

In addition, as disclosed in that certain Current Report on Form 8-K filed by the Company on December 21, 2015, the Company is in default of the terms of the Amended and Restated Credit and Guaranty Agreement dated as of November 21, 2014, by and among the Company and Garrison Loan Agency Services LLC, as Administrative Agent and Collateral Agent, and the lenders from time to time party thereto (collectively, the “Lenders”), as amended (the “Credit Agreement”). The Company has not received a waiver of this default of the Credit Agreement and it is unable to cure this default.

It is not possible for the Company to effect a transaction that will allow it to repay its debt under the Credit Agreement as an alternative to the Lenders’ exercise of their rights and remedies. As disclosed in that certain Current Report on Form 8-K filed by the Company on April 16, 2015, the Company has been engaged in a process of exploring strategic alternatives, including a sale of the Company. That process resulted in the Company receiving a number of preliminary offers for it to be acquired; however, the consideration offered in each such preliminary offer was below the level of the Company’s secured debt.

The Company and the Lenders entered into a Forbearance Agreement dated December 16, 2015 (the “Forbearance Agreement”) indicating that the Company’s Lenders would refrain from exercising their respective rights or remedies under the Credit Agreement, or otherwise, in respect of this default for 45 days, or until January 30, 2016. The term of the Forbearance Agreement has since expired and the Company anticipates that the Lenders will exercise their rights and remedies under the Credit Agreement, including, but not limited to, foreclosure on the Company’s assets, in the immediate future.

Due to the Company’s financial situation, the Board determined on February 16, 2016 that the Company should enter into this Transaction. The Transaction will cause the Company’s common stock to be held by less than 300 record shareholders and permit the Company to deregister under the federal securities laws and convert the Company into a privately-held corporation. The principal purpose of the Transaction is to eliminate the Company’s obligations and expenses resulting from registration.

The Transaction has been authorized by the Board, after evaluating and reviewing the Transaction, pursuant to Section 302A.402, Subd. 1 of the Minnesota Business Corporation Act (“MBCA”), which permits us to authorize a share division or combination without shareholder approval in the circumstances presented in the Reverse Split.

We are authorized under the MBCA to pay the fair cash value for fractional shares resulting from the Reverse Split, provided that, pursuant to Section 302A.423, Subd. 2 of the MBCA, we may not pay money for fractional shares if that action would result in the cancellation of more than 20% of the outstanding shares of our common stock. We have made certain calculations regarding the Reverse Split relating to its effect upon our shareholder base. Based upon our review of our list of shareholders of record furnished to us by Wells Fargo Shareowner Services, the transfer agent for our common stock, as well as an analysis we have conducted taking into account information furnished to us by The Proxy Advisory Group, LLC concerning shareholders who beneficially own their stock in street name, referred to as non-objecting beneficial owners and objecting beneficial owners, we have determined that the Reverse Split will not result in the cancellation of more than 20% of the outstanding shares of our common stock.

Under the MCBA, shareholders are entitled to dissenters’ rights of appraisal in connection with the Reverse Split.

The Transaction will be conducted upon the terms and subject to the conditions set forth in our disclosure document, referred to herein as the “Disclosure Document.” The information contained in the Disclosure Document, including all exhibits thereto, is hereby expressly incorporated herein by reference. Capitalized terms used but not defined herein shall have the meanings given to them in the Disclosure Document.

Item 1. Summary Term Sheet. The information set forth in the Disclosure Document under the caption “Summary Term Sheet” is incorporated herein by reference.

Item 2. Subject Company Information.

(a) Name and Address. The information set forth in the Disclosure Document under the caption “Background—The Company” is incorporated herein by reference.

(b) Securities. The information set forth in the Disclosure Document under the caption “Background—The Company’s Securities” is incorporated herein by reference.

(c) Trading Market and Price. The information set forth in the Disclosure Document under the caption “Background—The Company’s Securities” is incorporated herein by reference.

(d) Dividends. The information set forth in the Disclosure Document under the caption “Background—The Company’s Securities” is incorporated herein by reference.

(e) Prior Public Offerings. The information set forth in the Disclosure Document under “Background—The Company’s Securities” is incorporated herein by reference.

(f) Prior Stock Purchases. None.

Item 3. Identity and Background of Filing Person.

(a) Name and Address. Speed Commerce, Inc. is the filing person of this Schedule 13E-3. The information set forth in the Disclosure Document under the caption “Background—The Company” is incorporated herein by reference. The names and addresses of the executive officers and directors of the Company are set forth in the Disclosure Document under the caption “Background—Management,” which is incorporated herein by reference.

(b) Business and Background of Entities. The information set forth in the Disclosure Document under the caption “Background—The Filing Person” is incorporated herein by reference.

(c) Business and Background of Natural Persons. The information set forth in the Disclosure Document under the caption “Background—Management” is incorporated herein by reference.

Item 4. Terms of the Transaction.

(a) Material Terms. The information set forth in the Disclosure Document under the caption “Summary Term Sheet” is incorporated herein by reference.

(c) Different Terms. The information set forth in the Disclosure Document under the captions “Summary Term Sheet—Reverse Split” and “Summary Term Sheet—Continuing Shareholders” is incorporated herein by reference.

(d) Appraisal Rights. The information set forth in the Disclosure Document under the caption “Special Factors—Dissenters’ Rights” is incorporated herein by reference.

(e) Provisions for Unaffiliated Security Holders. The information set forth in the Disclosure Document under the caption “Special Factors—Access Rights” is incorporated herein by reference.

(f) Eligibility for Listing or Trading. Not applicable.

Item 5. Past Contacts, Transactions, Negotiations and Agreements.

(a) Transactions. The information set forth in the Disclosure Document under the caption “Special Factors—Related Party Transactions” is incorporated herein by reference.

(b) Significant Corporate Events. The information set forth in the Disclosure Document under the caption “Special Factors—Background of the Transaction” is hereby incorporated by reference.

(c) Negotiations or Contacts. The information set forth in the Disclosure Document under the caption “Special Factors – Background of the Transaction” is hereby incorporated by reference.

(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Disclosure Document under the caption “Background—Securities Ownership of Certain Beneficial Owners and Management” is hereby incorporated by reference with respect to securities held by the Company’s officers and directors.

Item 6. Purposes of the Transaction and Plans or Proposals.

(b) Use of Securities Acquired. Any securities we obtain in the Transaction will return to the status of authorized but unissued shares of common stock.

(c) Plans. The information set forth in the Disclosure Document under the caption “Special Factors—Purpose of the Transaction” is incorporated herein by reference.

Item 7. Purposes, Alternatives, Reasons and Effects.

(a) Purposes. The information set forth in the Disclosure Document under the captions “Special Factors—Background of the Transaction” and “Special Factors—Purpose of the Transaction” is incorporated herein by reference.

(b) Alternatives. The information set forth in the Disclosure Document under the caption “Special Factors—Alternatives to the Transaction” is incorporated herein by reference.

(c) Reasons. The information set forth in the Disclosure Document under the caption “Special Factors—Reasons for the Transaction” is incorporated herein by reference.

(d) Effects. The information set forth in the Disclosure Document under the captions “Special Factors—Effects of the Transaction” and “Federal Income Tax Consequences of the Transaction” is incorporated herein by reference.

Item 8. Fairness of the Transaction.

(a) Fairness. The information set forth in the Disclosure Document under the captions “Special Factors—Background of Transaction,” “Special Factors—Fairness of the Transaction” and “Special Factors—Reports, Opinions or Appraisals” is incorporated herein by reference.

(b) Factors Considered in Determining Fairness. The information set forth in the Disclosure Document under the caption “Special Factors—Fairness of the Transaction” is incorporated herein by reference.

(c) Approval of Security Holders. The information set forth in the Disclosure Document under the caption “Special Factors—Shareholder Approval” and “Special Factors—Reports, Opinions or Appraisals” is incorporated herein by reference.

(d) Unaffiliated Representative. None.

(e) Approval of Directors. The Transaction has been approved by a majority of the directors of the Company, including a majority of directors who are not employees of the Company. The information set forth in the Disclosure Document under the caption “Special Factors—Fairness of the Transaction” is incorporated herein by reference.

(f) Other Offers. None.

Item 9. Reports, Opinions, Appraisals and Negotiations.

(a) Report, Opinion or Appraisal. The information set forth in the Disclosure Document under the captions “Special Factors—Background of Transaction,” “Special Factors— Fairness of the Transaction” and “Special Factors—Reports, Opinions or Appraisals” is incorporated herein by reference.

(b) Preparer and Summary of the Report, Opinion or Appraisal. The information set forth in the Disclosure Document under the captions “Special Factors—Background of Transaction,” “Special Factors— Fairness of the Transaction” and “Special Factors—Reports, Opinions or Appraisals” is incorporated herein by reference.

(c) Availability of Documents. The information set forth in the Disclosure Document under the captions “Special Factors— Fairness of the Transaction” and “Special Factors—Reports, Opinions or Appraisals” is incorporated herein by reference.

Item 10. Source and Amounts of Funds or Other Consideration.

(a) Source of Funds. The information set forth in the Disclosure Document under the caption “Special Factors—Source and Amount of Funds” is incorporated herein by reference.

(b) Conditions. The information set forth in the Disclosure Document under the caption “Special Factors—Source and Amount of Funds” is incorporated herein by reference.

(c) Expenses. The information set forth in the Disclosure Document under the caption “Special Factors—Source and Amount of Funds” is incorporated herein by reference.

(d) Borrowed Funds. The information set forth in the Disclosure Document under the caption “Special Factors—Source and Amount of Funds” is incorporated herein by reference.

Item 11. Interest in Securities of the Subject Company.

(a) Securities Ownership. The information set forth in the Disclosure Document under the caption “Background—Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference.

(b) Securities Transactions. None.

Item 12. The Solicitation or Recommendation.

(d) Intent to Tender or Vote in Going-Private Transaction. Not applicable.

(e) Recommendations of Others. Not applicable.

Item 13. Financial Statements.

(a) Financial Statements. The information set forth in the Disclosure Document under the caption “Financial Information” is incorporated herein by reference.

(b) Pro Forma Information. Not material.

Item 14. Persons/Assets, Retained, Employed, Compensated or Used.

(a) Solicitations or Recommendations. None.

(b) Employees and Corporate Assets. The Company’s regularly employed management staff have participated in the organization, direction and preparation of this Schedule 13E-3 and the Disclosure Document for use in consummating the Transaction.

Item 15. Additional Information.

(a) Other Material Information. The information set forth in the Disclosure Document and each Exhibit or Appendix thereto is incorporated herein by reference.

Item 16. Exhibits.

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

7

Exhibit (a)(3)

[SPEED LETTERHEAD]

DISCLOSURE DOCUMENT

                  , 2016

Dear Shareholder,

After careful consideration, our Board of Directors (the “Board”) has concluded that, due to the Company’s financial position, we are unable to continue to satisfy the costs and burdens associated with being a public company. As a result, we intend to engage in a transaction that will result in the termination of the registration of our common stock under the federal securities laws and the conversion of Speed Commerce into a privately-held Company. This will eliminate the significant expense and management and staff time required to comply with the reporting and related requirements under the federal securities laws, eliminate the burdens of being publicly traded, and provide the flexibility and benefits of being a privately-held company.

The Transaction is a reverse split of our common stock whereby each sixteen (16) shares of our common stock will be converted to one share of our common stock (the “Reverse Split”), with holders who would otherwise receive only a fraction of one whole share after completion of the reverse split receiving cash in lieu of such fractional interests in an amount equal to $0.01 per share for each pre-split share that becomes a fractional interest (the cash payment, together with the Reverse Split, referred to as the “Transaction”). As a result of the Transaction, shareholders owning fewer than sixteen (16) shares of our common stock on a pre-split basis at the close of business on February 19, 2016, the record date of the Reverse Split, will no longer be shareholders of the Company following effectiveness of the Reverse Split, which we anticipate will occur on or around March 30, 2016. The $0.01 per pre-split share price to be paid for fractional shares represents fair value for a share of our common stock. The Board based this determination upon, among other things, the Fairness Opinion provided by Lake Street Capital Markets, LLC (“Lake Street”), its financial advisor engaged for purposes of providing such Fairness Opinion with respect to the Transaction.

The Board reviewed the proposed Transaction and considered its substantive and procedural fairness to shareholders who will have all of their shares cashed out in the Transaction. As part of the review, the Board retained Lake Street as an independent financial advisor to provide the Board with a Fairness Opinion regarding the fairness from a financial point of view the consideration to be paid to the record holders of less than one whole share of our common stock following the Reverse Split. After careful consideration, the Board has determined that the transaction is substantively and procedurally fair and in the best interests of Speed Commerce and the shareholders whose entire shareholdings will be cashed out in the Transaction.

Under Minnesota law, our Board may amend our Articles of Incorporation to implement the reverse split without the approval of the shareholders. Therefore, we are not seeking shareholder approval for this action and no vote is sought in connection with this action. Under Minnesota law, shareholders are entitled to dissenters’ rights of appraisal in connection with this type of going private transaction. The attached Disclosure Document contains details on the proposed Transaction, including dissenters’ rights available in connection with the proposed Transaction, and we urge you to read it very carefully.

Thank you for your continued support.

Dalton Edgecomb
Interim Chief Executive Officer

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE TRANSACTION DESCRIBED HEREIN, PASSED UPON THE MERITS OR FAIRNESS OF THE PROPOSED TRANSACTION OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL AND A CRIMINAL OFFENSE. NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS DOCUMENT OR RELATED SCHEDULE 13E-3, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US.

TABLE OF CONTENTS

Annex A – Fairness Opinion of Lake Street Capital Markets, LLC dated February 16, 2016

Annex B – Notice of Procedure to Assert Dissenters’ Rights and Minnesota Dissenters’ Rights Statutes

SPECIAL FACTORS

The Company is under extreme financial distress and its projections indicate that this situation will degrade further without substantial additional restructuring initiatives, ultimately resulting in an inability to continue the Company’s operations absent additional financing which is not currently available to the Company. The cash currently available to the Company is not sufficient to support the Company’s operations other than for a limited period. As a result, the Company may be required in the near future to cease operations or explore other legal options. The value of the Company’s assets and management’s projections with respect to discounted future cash flows indicate that the Company’s value is less than the current balance of the Company’s debt. Due to financial condition and lack of remedies available to the Company, management of the Company has concluded that there is substantial doubt about the Company’s ability to continue as a going concern.

In addition, as disclosed in that certain Current Report on Form 8-K filed by the Company on December 21, 2015 and that certain Quarterly Report on Form 10-Q filed by the Company on February 16, 2016, the Company is in default of the terms of the Amended and Restated Credit and Guaranty Agreement dated as of November 21, 2014, by and among the Company and Garrison Loan Agency Services LLC, as Administrative Agent and Collateral Agent, and the lenders from time to time party thereto (collectively, the “Lenders”), as amended (the “Credit Agreement”). The Company has not received a waiver of this default of the Credit Agreement and it is unable to cure this default.

It is not possible for the Company to effect a transaction that will allow it to repay its debt under the Credit Agreement as an alternative to the Lenders’ exercise of their rights and remedies. As disclosed in that certain Current Report on Form 8-K filed by the Company on April 16, 2015, the Company has been engaged in a process of exploring strategic alternatives, including a sale of the Company. That process resulted in the Company receiving a number of preliminary offers for it to be acquired; however, the consideration offered in each such preliminary offer was below the level of the Company’s secured debt.

The Company and the Lenders entered into a Forbearance Agreement dated December 16, 2015 (the “Forbearance Agreement”) indicating that the Company’s Lenders would refrain from exercising their respective rights or remedies under the Credit Agreement, or otherwise, in respect of this default for 45 days, or until January 30, 2016. The term of the Forbearance Agreement has since expired and the Company anticipates that the Lenders will exercise their rights and remedies under the Credit Agreement, including, but not limited to, foreclosure on the Company’s assets, in the immediate future.

Due to the Company’s financial situation, the Board determined on February 16, 2016 that the Company should enter into the Transaction. The Transaction will cause the Company’s common stock to be held by less than 300 record shareholders and permit the Company to deregister under the federal securities laws and convert the Company into a privately-held corporation. The principal purpose of the Transaction is to eliminate the Company’s obligations and expenses resulting from registration.

As discussed above, the purpose of the Reverse Stock Split is to eliminate the allow us to terminate the registration of our common stock under the Exchange Act and to convert into a privately-held company.

As a result of the termination of our registration and reporting obligations under the Exchange Act:

Following the consummation of the Transaction and the deregistration of the Company’s common stock, the Company anticipates that it will cease operations and wind down its remaining obligations.

In the course of reaching its decision to implement the Transaction, the Board considered various factors that would affect the shareholders whose shares will be cashed-out in the Transaction. The Board made its determination that the Transaction was fair to the shareholders that will be cashed-out in the Transaction. The Board’s determination was based on the following factors:

The following factors, favorable to the determination that the Transaction is fair to the shareholders whose entire shareholdings will be cashed out, were considered by the Board:

If we cease being a public company and being subject to the reporting requirements under the Exchange Act, we estimate that our cash savings will be at least $200,000 per year, including legal, accounting and printing fees attributable to such reporting requirements, which, due to the Company’s financial position, we are unable to continue to satisfy. Moreover, cessation of such reporting requirements will avoid the need for management to spend significant time and effort preparing and reviewing our Exchange Act filings.

The most weight was given to the factors relating to the price to be paid for fractional shares and our inability to pay continued public reporting costs and expenses.

The following factors, disfavorable to the determination that the Transaction is fair to the shareholders whose entire shareholdings will be cashed out, were also considered by the Board:

The Board did not consider the following factors for the reasons stated below:

The Board determined that the Transaction was procedurally and substantively fair to our shareholders who will be cashed-out in the Transaction.

Following the review and evaluation of the Transaction, the Board determined that the Transaction was fair to the Company’s shareholders whose entire shareholdings will be cashed out in the Transaction. The Board believes that the reverse stock split is substantively and procedurally fair to the shareholders of the Company whose entire shareholdings will be cashed out in the Transaction. The Board has adopted the analysis and conclusions of Lake Street with regard to the material factors on which it based its Fairness Opinion.

MBCA Section 302A.402, Subd. 2 provides that the Board alone, without shareholder approval, may authorize a share division or combination if, as a result of the proposed share division or combination:

With respect to the requirements of paragraph (1) above, Section 302A.402, Subd. 4 of the MBCA provides that “an increase or decrease in the relative voting rights of the shares that are the subject of the division or combination that arises solely from the increase or decrease in the number of shares outstanding is not an adverse effect on the outstanding shares of any class or series.” We will file amendments to our Articles of Incorporation adjusting our authorized common stock to reflect the effects of the Reverse Split so that the requirements of paragraph (2) above are met. In addition, Section 302A.402, Subd. 4 of the MBCA provides that “any increase in the percentage of authorized shares remaining unissued arising solely from the elimination of fractional shares under Section 302A.423 must be disregarded.”

MBCA Section 302A.423, Subd. 1(b) expressly provides that, in lieu of issuing fractional shares, a corporation may “pay in money the fair value of the fractions of a share as of the time when persons entitled to receive the fractions are determined.” The Board has determined that the consideration to be paid to shareholders who would otherwise own fractional shares after the Reverse Split is fair, from a financial point of view, to such shareholders.

The Transaction is being effected without approval of the Transaction by a majority of the shareholders of the Company; however, the Transaction has been approved the majority of directors who are not employees of the Company.

The Fairness Opinion of Lake Street is filed as Annex A to this Disclosure Document.

The Board considered the following alternatives to the Transaction to accomplish the purpose described above in “Purpose of the Transaction,” each of which was ultimately rejected because of its disadvantages:

Effects of the Transaction on our Shareholders. Based on information available to us, we estimate that the Transaction will reduce the total number of record shareholders of our common stock from approximately 563 to approximately 280. The reduction in the number of our record shareholders below 300 will enable us to terminate the registration of our common stock under the Exchange Act and suspend our periodic reporting requirements.

We intend to apply for termination of registration of our common stock under the Exchange Act as soon as practicable following completion of the Transaction. However, the Board reserves the right, in its discretion, to abandon the Transaction prior to the proposed Effective Date if it determines that abandoning the Transaction is in our best interests and the best interests of our shareholders.

When the Transaction is consummated, all shareholders holding fewer than sixteen (16) shares will no longer have any equity interest and will not participate in our future earnings or any increases in the value of our assets or operations. Thus, only shareholders holding sixteen (16) or more shares of our common stock will remain shareholders after consummation of the Transaction, and only such remaining shareholders will benefit from any future increase in our earnings.

Effects of the Transaction on our Affiliates. The Transaction will apply equally among our affiliates and our non-affiliate shareholders. As such, common stock held by our affiliates, including our officers, directors and principal shareholders, will be subject to the terms of the Reverse Split, and, if applicable, cashed out by the Company or retained by such affiliates in the same manner and upon the same terms as common stock held by our non-affiliate shareholders.

Financial Effects of the Transaction. Completion of the Transaction will require us to spend approximately $156,000, which includes legal, financial, accounting and other fees and costs related to the Transaction. This estimate does not include the cost of the aggregate cash payment to shareholders when all fractional share interests are cashed out, which aggregate payment we estimate will be approximately $125. We expect to pay these amounts from available cash.

Fairness Opinion of Financial Advisor

The Board engaged Lake Street Capital Markets, LLC (“Lake Street”) on January 29, 2016 to provide a fairness opinion in connection with the Transaction. On February 16, 2016, Lake Street delivered an opinion as to the fairness from a financial point of view of the $0.01 per pre-split share to be paid to the record holders of less than one whole share of our common stock following the Reverse Split (the “Fairness Opinion”) and made a presentation to the Board, which presented various valuation analyses considered in reaching the Fairness Opinion.  The Fairness Opinion and the presentation were used by the Board to arrive at the per share price and to assess the fairness of the per share price to be paid to the shareholders whose entire shareholdings will be cashed out in the Transaction.

The Board retained Lake Street in part because Lake Street regularly engages in the valuation of businesses that are similar in size to us, across a range of industries, in connection with mergers and acquisitions, leveraged buyouts, and going private transactions and is experienced in fairness opinions, providing independent appraisals and valuations. In addition, the Company previously engaged Lake Street to provide valuation services in connection with the Company’s acquisition of certain assets from Sigma Holdings, LLC on November 11, 2014 (the “Prior Engagement”).

The Fairness Opinion was provided to the Board and addressed the fairness from a financial point of view of the consideration to be paid to the record holders who will be cashed out as a result of the Transaction. The Fairness Opinion determined that such consideration was fair to such shareholders from a financial point of view.

The Fairness Opinion did not address the merits underlying our business decision to enter into the Transaction, did not constitute a recommendation to the Board as to whether the Transaction should be approved by the Board, and did not constitute a recommendation of whether our shareholders should or should not exercise dissenters’ rights with regard to the Transaction.

We have agreed to pay Lake Street a fee of $30,000 plus reimbursement of its out-of-pocket expenses, for providing its Fairness Opinion and related financial advisory services. No portion of Lake Street’s fee is contingent upon the conclusions reached in its Fairness Opinion or upon consummation of any transaction. We have agreed to indemnify and hold harmless Lake Street, and its members, managers, governors, employees, and associates against all charges or legal actions resulting from the engagement of Lake Street by the Board.  No person or entity employed by or associated with Lake Street owns the stock of, or trades the securities of, or has any financial interest in, us or any related entities. The Company paid Lake Street approximately $970,000 in connection with the Prior Engagement. Other than the Prior Engagement, during the past two years no material relationship existed and no other compensation was received or is to be received as a result of any relationship between Lake Street, its affiliates, and/or unaffiliated representatives and Speed Commerce or its affiliates.

The complete text of the Fairness Opinion is attached to this Disclosure Document as Annex A, and the foregoing summary of the Fairness Opinion is qualified in its entirety by reference to that Fairness Opinion, as attached as Annex A. We urge you to read the Fairness Opinion carefully for a description of the procedures followed, the factors considered, and the assumptions made.

XI.     As disclosed in the Company’s Current Report on Form 8-K filed on December 21, 2015, the Company entered into an Engagement Agreement with Winter Harbor LLC in connection with the provision of the services of Dalton Edgecomb and Bruce Meier as Interim Chief Executive Officer and Interim Chief Financial Officer, respectively. The Engagement Agreement does not have a definitive term and can be terminated by the Company or Winter Harbor LLC at any time. Other than the Engagement Agreement, there is no arrangement or understanding between the Company and Messrs. Edgecomb and Meier regarding their appointments as interim officers of the Company or their compensation.

The Transaction has been approved by the Board. No vote of our shareholders is required to effectuate the Transaction. Pursuant to Section 302A.402 of the MBCA, we may effect a share division or combination without shareholder approval so long as (i) the rights or preferences of the holders of outstanding shares of any class or series will not be adversely affected and (ii) the percentage of authorized shares of any class or series remaining unissued after the division or combination will not exceed the percentage of authorized shares of that class or series that were unissued before the division or combination. For purposes of the requirement set forth in paragraph (ii), the MBCA provides that any increase in the percentage of authorized common stock remaining unissued arising solely from a corporation’s cancellation of fractional shares in accordance with Section 302A.423 of the MBCA will be disregarded. In addition, Section 302A.423 of the MBCA provides that a corporation shall not pay money for fractional shares if that action would result in the cancellation of more than 20% of the outstanding shares of a class or series. Based upon our review of our list of shareholders of record furnished to us by Wells Fargo Shareowner Services, our transfer agent, as well as an analysis we have conducted taking into account information furnished to us by the Proxy Advisory Group, LLC concerning shareholders who beneficially own their stock in street name, referred to as non-objecting beneficial owners and objecting beneficial owners, we have determined that the Reverse Split will not result in the cancellation of more than 20% of the outstanding shares of any class or series.

The Articles of Amendment to our Articles of Incorporation to be filed in connection with the Transaction will contain a statement that the amendment will not adversely affect the rights or preferences of the holders of outstanding shares of any class or series and will not result in the percentage of authorized shares of any class or series that remains unissued after the combination exceeding the percentage of authorized shares of that class or series that were unissued before the combination.

Pursuant to Sections 302A.471 and 302A.473 of the MBCA, any shareholder who will receive cash in lieu of fractional shares as part of the Transaction but believes that such cash payment does not represent the fair value of the shares being cashed out in the Transaction is entitled to dissent from the Transaction and to have a court determine the fair value of the shares. In the context of the Reverse Split, the MBCA provides that shareholders may elect to exercise their dissenters’ rights to have the Company purchase pre-Reverse Split shares that would become fractional shares as a result of the Reverse Split for a cash price that is equal to the “fair value” of such shares, as determined in a judicial proceeding in accordance with the provisions of Section 302A.473 of the MBCA. The fair value of the shares of any shareholder means the value of such shares immediately before the effective date of the Reverse Split.

Sections 302A.471 and 302A.473 of the MBCA are set forth in their entirety in Exhibit A of Annex B to this Disclosure Document. If you wish to exercise your dissenters’ rights or preserve the right to do so, you should carefully review Annex B to this Disclosure Document. If you fail to comply with the procedures specified in the MBCA in a timely manner, you may lose your dissenters’ rights. Because of the complexity of those procedures, you should seek the advice of counsel if you are considering exercising your dissenters’ rights.

Shareholders who perfect their dissenters’ rights by fully complying with the procedures set forth in the MBCA will have the fair value of their shares determined by a Minnesota state court and will be entitled to receive a cash payment equal to such fair value. Any such judicial determination of the fair value of shares could be based upon any valuation method or combination of methods the court deems appropriate. The value so determined could be equal to, more than or less than the $0.01 per pre-split share to be paid in connection with the Reverse Split. Shareholders who properly exercise dissenters’ rights may be entitled to receive interest commencing five days after the effective time of the Transaction on the amount determined to be the fair value of their shares.

Included as Annex B to this Disclosure Document is the Company’s notice to you of dissenters’ rights (the “Dissenters’ Rights Notice”). The Dissenters’ Rights Notice contains (i) the address to which a “Demand for Payment Under Dissenters’ Rights” and share certificates must be sent in order to properly and timely commence your exercise of dissenters’ rights if you choose to exercise dissenters’ rights, and the date by which they must be received; (ii) restrictions on transfer of shares that will apply after a Demand for Payment Under Dissenters’ Rights is received; (iii) a form to certify the date the shareholder acquired beneficial ownership of the shares and to so demand payment under dissenters’ rights; and (iv) a copy of Sections 302A.471 and 302A.473 of the MBCA and a brief description of the procedures that a shareholder must follow to exercise dissenter’s rights.

In order to maintain eligibility to exercise dissenters’ rights under the MBCA, you must submit the demand for payment and deposit certificated shares within 30 days of the date that the Dissenters’ Rights Notice included as Annex B to this Disclosure Document was mailed to you or, if you are a beneficial and not record holder, was mailed to your record holder.

Within 60 days after deposit of the certificates, the Company must pay each dissenter who properly complied with the provisions of the MBCA the amount the Company estimates to be the fair value of such shares, plus interest commencing five days after the effective date of the Reverse Split. The rate of interest, as prescribed by Minnesota law, will be simple interest at the rate of 4% per annum. The payment will be accompanied by the following: (i) the most recent annual financial statements the and the most recent interim financial statements for the Company; (ii) an estimate by the Company of the fair value of the shares and a brief description of the method used to reach the estimate; and (iii) a copy of Sections 302A.471 and 302A.473 and a brief description of the procedure to be followed in demanding supplemental payment if the dissenting shareholder believes he is entitled to more. If the Company does not deliver payment within 60 days of deposit of certificates, the Company shall return all deposited certificates. However, the Company may give notice under Section 302A.473, subdivision (4) again at a later date.

If a dissenting shareholder believes that the Company’s payment is less than the fair value of the shares plus interest, then the dissenting shareholder may, within 30 days of such payment, notify the Company in writing of the dissenting shareholder’s own estimate of the fair value of the dissenting shares and the amount of interest due, and demand payment of such estimate, less any payments made by the Company. If a dissenting shareholder submits a written demand as set forth above and the Company accepts the offer to purchase the shares at the offer price, then the shareholder will be sent a check for the full purchase price of the shares within 60 days of receiving the demand.

If a shareholder’s demand for additional payment remains unsettled, the Company is to commence a proceeding in Minnesota district court within 60 days after receiving the demand. Each dissenter who is made a party to the proceeding shall be entitled to a judgment in the amount, if any, by which the court finds the fair value of the dissenting shares, plus interest, exceeds the amount paid by the Company. If a proceeding is commenced to determine the fair value of the common stock, the costs of such proceeding, including the reasonable compensation and expenses of any appraisers appointed by the court, shall be assessed against the Company, unless the court finds the dissenters acted arbitrarily, vexatiously or not in good faith in demanding additional payment. The court may also assess the fees and expenses of the counsel and experts for the respective parties, in amounts the court finds equitable (i) against the Company if the court finds that the Company did not comply substantially with Section 302A.473 or (ii) against either the Company or a dissenting shareholder, if the court finds that such party acted arbitrarily, vexatiously or not in good faith in bringing the proceeding.

A person having a beneficial interest in shares that are held of record in the name of another person, such as a broker, fiduciary, depository or other nominee, must act to cause the record holder to follow the requisite steps properly and in a timely manner to perfect dissenters’ rights of appraisal. If the shares are owned of record by a person other than the beneficial owner, including a broker, fiduciary (such as a trustee, guardian or custodian), depositary or other nominee, the written demand for dissenters’ rights of appraisal must be executed by or for the record owner. If shares are owned of record by more than one person, as in joint tenancy or tenancy in common, the demand must be executed by or for all joint owners. An authorized agent, including an agent for two or more joint owners, may execute a demand for appraisal for a shareholder of record, provided that the agent identifies the record owner and expressly discloses, when the demand is made, that the agent is acting as agent for the record owner. If a shareholder owns shares through a broker who in turn holds the shares through a central securities depository nominee such as CEDE & Co., a demand for appraisal of such shares must be made by or on behalf of the depository nominee and must identify the depository nominee as the record holder of such shares.

A record holder, such as a broker, fiduciary, depository or other nominee, who holds shares as a nominee for others, will be able to exercise dissenters’ rights of appraisal with respect to the shares held for all or less than all of the beneficial owners of those shares as to which such person is the record owner. In such case, the written demand must set forth the number of shares covered by the demand. Where the number of shares is not expressly stated, the demand will be presumed to cover all shares outstanding in the name of such record owner.

The foregoing summary of the rights of dissenting shareholder under the MBCA does not purport to be a complete statement of the procedures to be followed by shareholder desiring to exercise any dissenters’ rights or appraisal rights available under the MBCA. The preservation and exercise of dissenters’ rights of appraisal require strict adherence to the applicable provisions of the MBCA, and the foregoing summary is qualified in its entirety by reference to Annex B to this Disclosure Document.

The Company has not made any provision to obtain counsel or appraisal services for the shareholders who will be cashed out in the Transaction.

We have made no provision in connection with the Transaction to grant our unaffiliated shareholders access to our corporate files or to obtain counsel or appraisal services at our expense.

The following is an estimate of the costs that we have incurred or expect to incur in connection with the Transaction, but does not include the cost of the aggregate cash payment to shareholders who will be cashed out in the Transaction, which we estimate will be approximately $125. Final costs of the Transaction may be more or less than the estimates shown below.

We expect to pay the estimated costs, including the amounts to be paid to shareholders who will be cashed out in the Transaction, out of our currently available cash.

BACKGROUND

The filings person under Rule 13e-3 of the Exchange Act is Speed Commerce, Inc., the subject company. The principal executive office and telephone number of the Company, is 1303 East Arapaho Road, Ste. 200, Richardson, TX 75081, Tel: (214) 258-0100.

The Company’s principal business is as a provider of flexible end-to-end E-commerce services to retailers and manufacturers. It provides web platform development and hosting, order management, fulfillment, logistics and contact center services which provide clients with easy-to-implement, cost-effective, transaction-based services and information management tools.

Neither the Company, nor any of its executive officer or directors, has been convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors), nor has the Company or any such person been party to any judicial or administrative proceeding during such time that has resulted in a judgment, decree or final order enjoining the Company or such person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of a violation of federal or state securities laws.

The Board has authorized the Transaction. The Transaction consists of a 1-for-16 reverse stock split, such that shareholders owning fewer than sixteen (16) shares of common stock on the Record Date, will have all of their shares cancelled and converted into the right to receive the cash consideration set forth herein. The Transaction is intended to take effect on the date we file articles of amendment to our Articles of Incorporation with the Secretary of State of the State of Minnesota, or on any later date that we may specify in such articles of amendment, which we will refer to as the Effective Date and which date will be the same date as the Record Date.

As of the Effective Date, we will effect the Reverse Split, pursuant to which a holder of sixteen (16) shares of our common stock on the Record Date will hold one share of the common stock immediately after the Reverse Split. Any shareholder owning fewer than sixteen (16) shares of the common stock on the Record Date will receive only the right to receive cash in exchange for the resulting fractional share thereof and will no longer be a shareholder of the Company. A shareholder owning sixteen (16) or more shares of common stock immediately before the Transaction will receive the number of whole shares of Common Stock resulting from Reverse Split and will receive on additional whole share for any fractional shares resulting from the Reverse Split. Following the Transaction, we expect that our common stock will be held of record by 280 shareholders.

The Board has set the cash consideration for cashed out fractional shares to be $0.01 for each pre-split share of common stock that is cashed out. The Board determined in good faith, based upon factors the Board deemed relevant, including the Fairness Opinion of Lake Street.

The Transaction is considered a “going private” transaction as defined in Rule 13e-3 promulgated under the Exchange Act because it is intended to and, if completed, will likely terminate the registration of our common stock under Section 12(g) of the Exchange Act and suspend our duty to file periodic reports with the SEC. In connection with the Transaction, we have filed with the SEC a Rule 13e-3 Transaction Statement on Schedule 13E-3.

On February 16, 2016, there were approximately 563 record holders of our common stock, not including holders in street name, and 96,619,907 shares of our common stock outstanding.

On October 6, 2015, the Company received approval from NASDAQ to transfer the listing of its common stock from the NASDAQ Global Market to the NASDAQ Capital Market. This transfer was effective upon the opening of business on October 8, 2015.

On November 24, 2015, the Company received written notice from NASDAQ that is was not in compliance with the minimum stockholders’ equity requirements for continued listing on The NASDAQ Capital Market, which requires the issuing company of listed securities to maintain a minimum stockholders’ equity of $2.5 million. The reported stockholders’ equity for the period ending September 30, 2015 did not meet this minimum requirement. Further, the Company did not meet any of the alternatives to the minimum stockholders’ equity standard for continued listing requirements.

On January 12, 2016, the Company received a notification letter from NASDAQ indicating that it would delist and suspend trading in the Company’s shares effective at the open of business on Thursday, January 21, 2016. On January 21, 2016, the Company’s common stock was suspended from the NASDAQ Capital Market, and currently trades on the OTC Markets Group’s OTC Pink Market under the trading symbol SPDC.

NASDAQ filed with the Securities and Exchange Commission a Form 25 Notification of Removal of Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934 with respect to the Company’s common stock on February 17, 2016. The Company’s common stock will be delisted from NASDAQ ten (10) calendar days from the date the Form 25 was filed with the Securities and Exchange Commission.

The following table shows the range of high and low sales prices per share of our common stock for the periods indicated:

On February 18, 2016, the closing price of our common stock on the OTC Pink was $0.018 per share.

During the past three years, the Company has made the following underwritten public offerings of its common stock:

We have never declared or paid any cash dividends on our common stock and we do not intend to pay dividends on our common stock in the foreseeable future.  The declaration or payment of dividends, if any, on our capital stock in the future is subject to the discretion of our Board of Directors and will depend on our earnings (if any), financial condition, capital requirements and other relevant factors.

As of February 18, 2016, there were outstanding options to purchase 605,881 shares of our common stock and outstanding warrants to purchase 10,610,117 shares of our common stock.

The following table sets forth information known to us with respect to the beneficial ownership of each class of our capital stock as of February 16, 2016 for (1) each person known by us to beneficially own more than 5% of any class of our voting securities, (2) each of our named executive officers, (3) each of our directors and (4) all of our named executive officers and directors as a group.  Except as otherwise indicated, we believe that each of the beneficial owners of our capital stock listed below, based on information provided by these owners, has sole investment and voting power with respect to its shares, subject to community property laws where applicable.  Unless otherwise indicated, each natural person is a citizen of the United States, and the address for each listed shareholder is c/o Speed Commerce, Inc., 1303 East Arapaho Road, Ste. 200, Richardson, TX 75081.  All share amounts as set forth below are prior to the completion of the Transaction. Percentage computations are based on 96,619,907 shares of our Common Stock outstanding as of February 16, 2016.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. We believe that all persons named in the table have sole voting and sole investment power with respect to all shares beneficially owned by them, unless otherwise indicated. All figures include shares of Common Stock which are not currently outstanding but are deemed beneficially owned because of the right to acquire shares pursuant to options exercisable and other convertible securities (including restricted stock units) vesting within 60 days of February 16, 2016 and, which are deemed to be outstanding and to be beneficially owned by the person holding such rights for the purpose of computing the percentage ownership of that person, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

Management Shareholdings

The following table sets forth the number of shares of our common stock beneficially owned as of February 16, 2016 by each of our named executive officers, by each of our current directors and director nominees, and by all of our current directors and executive officers (including the named executive officers) as a group.

* Indicates ownership of less than one percent.

__________

Principal Shareholders

The following table provides information concerning the only persons known to us to be the beneficial owners of more than five percent (5%) of our outstanding common stock as of February 16, 2016.

* Indicates ownership of less than one percent.

_______________

Rebecca Lynn Atchison, Director, Age 53. Ms. Atchison has served as a director of the Company since October 2013. Since August 2006, she has been the Chief Financial Officer of HomeAway, Inc. (NASDAQ: AWAY), an internet-based operator of the world’s largest online marketplace for the vacation rental industry. Previously, Ms. Atchison was Chief Financial Officer of Infoglide Software Corporation, an enterprise software provider, from February 2004 to August 2006. From October 2003 to January 2004, Ms. Atchison worked as a business consultant for Range Online Media, an internet marketing firm. From May 1996 to April 2003, Ms. Atchison served as Chief Financial Officer and Vice President of Finance and Administration of Hoover’s, Inc., a provider of online business information. From November 1994 to April 1996, Ms. Atchison served as Chief Financial Officer of Travelogix, Inc., a provider of travel ticketing systems software. From May 1990 to November 1994, Ms. Atchison worked as a consultant providing controller functions for software, technology and non-profit organizations, including Trilogy Development, a provider of sales automation software, and Austin American Technology. Prior to that, Ms. Atchison worked for eight years as an accountant with Ernst & Young LLP. Ms. Atchison holds a B.B.A. in accounting from Stephen F. Austin State University.

Stephen Duchelle, Director, Age 58. was appointed to the Board on April 1, 2014. Mr. Duchelle’s appointment filled a vacancy that arose from the retirement of director Keith A. Benson from the Company’s Board of Directors on May 31, 2014. Since October 2012, Mr. Duchelle has been the Vice President of e-commerce for Juicy Couture, a retail provider of women’s and girl’s apparel and accessories, which recently operated as Fifth & Pacific Companies, where he was responsible for its e-commerce business strategy and web operations. Previously, from August 2009 to September 2012, Mr. Duchelle served as the Vice President of e-commerce Strategy at GSI Commerce, Inc., now eBay Enterprise, a provider of e-commerce and interactive marketing services related to direct to consumers sales, where he was responsible for a portfolio of e-commerce clients providing e-commerce omni-channel consulting and client services support. Mr. Duchelle also served as the Senior Vice President of e-commerce for Belk, Inc., a retail provider of fashion apparel, shoes, and accessories, as well as additional house ware merchandise, from September 2007 to July 2009. Mr. Duchelle holds both a B.S. and M.S. degree from Virginia Tech as well as a M.B.A. from James Madison University.

Timothy R. Gentz, Director, Age 63. Mr. Gentz has served as a director of the Company since May 2004 and as Chairman of the Board since September 2011 and is Chair of the Governance and Nominating Committee. From January 2005 to June 2012, Mr. Gentz was a self-employed consultant to multiple medical products and services companies and also was engaged in such activity from January to December 2003. During 2004, Mr. Gentz served as the COO of The Palm Tree Group, a Houston-based international distributor of medical products and supplies. From October 2000 to December 2002, he was the COO and CFO for Gulf South Medical Supply, Inc., a wholly-owned subsidiary of PSS World Medical (NASDAQ), Inc. Previously, Mr. Gentz was a private investor in an Internet entertainment start-up company, a CD package company, a Houston-based investment banking firm and other private companies. In May 2011, Mr. Gentz was elected as a director of TOBI, Inc. (TOAK.OB), an inactive bank holding company formerly known as Treaty Oak Bancorp, Inc.

Frederick C. Green IV, Director, Age 56. Mr. Green has served as a director of the Company since September 2009 and is Chair of the Compensation Committee and a member of the Strategic Transactions Committee. Mr. Green is the Chief Development Officer of Range Systems, Inc. and Sealed Mindset, LLC, companies providing live fire shooting products and services for the military, law enforcement and consumer communities. Previously, Mr. Green was the President of Jonaco Machine, a contract manufacturer to the aerospace and medical equipment industries. From 2005 to 2010, Mr. Green was the Managing Director of Denali Partners, LLC, a private equity firm that he co-founded in 2004. Jonaco Machine was previously a portfolio company of Denali Partners and was sold by Denali in late 2010. Previously, from 2002 to 2004, he founded and was the Managing Director of Marathon Partners LLC, a management firm for the portfolio companies of private equity firms. From 1999 to 2002, he served as the Chief Operating Officer of Bracknell Corporation, a $1.4 billion facilities infrastructure company with 33 locations in North America, and previously he was the President and CEO of Nationwide Electric, Inc., a national electrical installation and services company that was acquired by Bracknell. From 1996 to 1998, he was the President and CEO of Product Safety Resources, Inc., a company focused on electronic product safety information, and from 1988 to 1996, Mr. Green held various operations and leadership positions with Emerson Electric Co. (NYSE:EMR), a multinational manufacturer of a broad range of electrical, electromechanical and electronic products and systems, including: Vice President, General Manager, Process Flow; Vice President Marketing and Sales; and Vice President of Strategic Planning and Technology. Prior to joining Emerson Electric Mr. Green was a management consultant with McKinsey & Company.

Scott Guilfoyle, Director, Age 56. Mr. Guilfoyle has served as a director since July 2014. He joined eBay in 2008 as Chief Technology Officer of PayPal in charge of the PayPal payments platform operations. His other responsibilities at eBay included participating on the 12 member eBay leadership team and on the technology committee of the eBay Board of Directors and serving as Chief Information Officer of eBay and an executive director of the PayPal Bank Board in Luxembourg. Since his retirement from eBay in 2012, Mr. Guilfoyle has been serving as an angel investor and board advisor to several firms focused primarily in technology, e-commerce and payments. Prior to working at eBay, Mr. Guilfoyle served as Chief Information Officer of LendingTree from 2007 to 2008 and as Chief Information Officer of eCommerce and Card Services at Bank of America from 2002 to 2007. At Bank of America, he was responsible for leading the technology organization for online banking, credit card, debit and ATM, merchant services and mortgage services. While at Bank of America, Mr. Guilfoyle played a significant role in the acquisition and integration of MBNA Corporation, a leading provider of credit card and payment products. Mr. Guilfoyle began his professional career with General Electric, where he worked for 18 years, including as a Chief Information Officer overseeing multiple GE businesses, including GE Power Systems, GE Appliances, GE Plastics, GE ebusiness and GE Aviation Services. Mr. Guilfoyle holds a B.B.A from Wilmington College.

Bradley J. Shisler, Direcor, Age 43. Mr. Shisler has served as a director of the Company since February 2011 and is a member of the Compensation, Governance and Nominating, and Strategic Transactions Committees. Mr. Shisler currently serves on the board of directors of Pixelworks, Inc. (NASDAQ: PXLW), which creates, develops and markets video display processing technology for digital video applications that demand the very highest quality images, and on the board of directors of RealManage Holdings, Inc., a community association management company. Mr. Shisler is a Managing Director of Condire Investors, LLC and is an employee of CPMG, Inc., both of which are Dallas-based investment management companies. From September 2007 until December 2008, Mr. Shisler served as a partner at Blue River Partners, L.L.C., a start-up private equity firm formed to make control investments in lower middle-market companies. Previously, from 1996 to 2007, Mr. Shisler was a principal of Willis Stein & Partners, a private equity fund with nearly $3 billion of equity capital under management. While at Willis Stein, Mr. Shisler served on the boards of directors of Baker & Taylor Corporation, a leading national distributor of books, DVDs and music; CompuPay, Inc., a provider of outsourced payroll processing, tax filing and other related services; National Veterinary Associates, Inc., an owner and operator of 96 companion animal veterinary hospitals throughout the U.S.; and Ziff Davis Media Inc., an integrated media company focused on the technology and video game markets. Mr. Shisler has a M.B.A., with distinction, from the Kellogg School of Management at Northwestern University, as well as both a B.S. degree in chemical engineering and a B.A. degree in political science from Rice University.

Dalton Edgecomb, Interim Chief Executive Officer, Age 51. Mr. Edgecomb is a principal of Winter Harbor, LLC and has more than 20 years of experience advising companies through cash management and cost reduction, capital structure refinancing, crisis management and business plan development for restructuring purposes. He has participated in more than 50 successful turnaround engagements in a variety of industries including food and agribusiness, retail, textiles, healthcare, engineering and construction, energy, transportation, and industrial manufacturing. Since January 2012, Mr. Edgecomb has been a member and managing director of Winter Harbor, LLC. Prior to that time, Mr. Edgecomb was a managing director at Huron Consulting where, for approximately five years, he provided various business and consulting services.

Bruce Meier, Interim Chief Financial Officer, Age 47. Mr. Meier is a professional of Winter Harbor, LLC and has more than 25 years of diversified business experience including more than 17 years of providing interim management and advisory services to companies, lenders, and investors in distressed situations. His primary areas of concentration include financial management and performance improvement, strategic planning, development and evaluation of business plans, as well as formulating debt restructuring plans and divesting of unprofitable and/or non-strategic operations and assets. For the past one and one-half years Mr. Meier has been an employee of Winter Harbor, LLC. Prior to Winter Harbor, LLC, Mr. Meier worked for Alvarez and Marsal for 6 years as a senior director in the corporate restructuring group.

Each director and executive officer is a citizen of the United States, and the address for each director and executive officer is c/o Speed Commerce, Inc., 1303 East Arapaho Road, Ste. 200, Richardson, TX 75081. None of our directors or executive officers has been convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors), nor has any such person been party to any judicial or administrative proceeding during such time that has resulted in a judgment, decree or final order enjoining such person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of a violation of federal or state securities laws.

FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION

Summarized below are certain material federal income tax consequences to us and our shareholders resulting from the Transaction. This summary is based upon United States federal income tax law, as currently in effect, which is subject to differing interpretations or change, possibly on a retroactive basis. This summary addresses only those shareholders who have held their shares as capital assets. This summary does not discuss all aspects of federal income taxation that may be important to shareholders in light of their individual circumstances. In addition, this summary does not discuss any state, local, foreign, or other tax considerations. This summary assumes that each shareholder is a United States citizen and has held, and will hold, shares of common stock as capital assets under the Internal Revenue Code of 1986, as amended. Each shareholder should consult its tax advisor as to the particular federal, state, local, foreign, and other tax consequences, in light of its specific circumstances.

We believe that the Transaction should be treated as a tax-free “recapitalization” for federal income tax purposes and, accordingly, it should not result in any material federal income tax consequences to us. We will not apply for any ruling from the Internal Revenue Service, nor will we receive an opinion of counsel with respect to the tax consequences of the Transaction.

A shareholder who receives a cash payment for a fractional share of our common stock as a result of the Transaction and does not continue to hold our shares directly, or indirectly by virtue of being related to a person who continues to hold shares of our common stock directly, immediately after the Transaction, will recognize capital gain or loss, for United States federal income tax purposes, equal to the difference between the cash received for the common stock and the aggregate adjusted tax basis in such stock.

Capital gain or loss recognized will be long-term if the shareholder’s holding period with respect to the stock surrendered is more than one year at the time of the Transaction. The deductibility of capital loss is subject to limitations.

The foregoing discussion summarizing certain federal income tax consequences does not refer to the particular facts and circumstances of any specific shareholder. Our views regarding the tax consequences of the Transaction are not binding upon the Internal Revenue Service or the courts, and there can be no assurance that the Internal Revenue Services or the courts would accept the positions expressed above. Accordingly, we recommend that shareholders consult their own tax advisors for more specific and definitive advice as to the federal income tax consequences to them of the Transaction, as well as advice as to the application and effect of state, local and foreign income and other tax laws.

FINANCIAL INFORMATION

Our historical financial information is located at (i) “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Item 8—Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended March 31, 2015, filed with the SEC on June 15, 2015, which financial information is incorporated herein by reference and (ii) in our Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, filed with the SEC on February 16, 2016, which financial information is incorporated herein by reference.

Our book value per share of common stock as of December 31, 2015 was ($0.90) based on 96,619,907 shares of common stock outstanding and common stockholders’ equity of ($86,694,000).

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This document contains certain statements of a non-historical nature constituting “forward-looking statements.” Such forward-looking statements may be identified by the use of terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “should,” or “continue” or the negative thereof or other variations thereof or comparable terminology. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or from those results currently anticipated or projected. Such factors include, among other things, the following: the Company’s ability to complete the Transaction; the benefits of the Transaction to the Company and to the shareholders who will receive cash for their shares in the Transaction; and other matters discussed in our “Risk Factors” set forth in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014 and subsequent public filings. We undertake no obligation to release publicly the result of any revisions to these forward-looking statements, except as required by law, including under Rule 13e-3 under the Exchange Act to reflect any material Changes in information previously disclosed. The “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, however, do not apply to going private transactions.

Annex A

CONFIDENTIAL

February 16, 2016

Board of Directors of Speed Commerce, Inc.

1303 E. Arapaho Road, Suite 200

Richardson, TX 75081

Members of the Speed Commerce Board of Directors:

We understand that Speed Commerce, Inc. (“Speed” or the “Company”) is considering a 1- for- 16 reverse stock split (the "Reverse Split') whereby each record holder of common stock owning less than 16 pre-split shares and, according to the structure of the Reverse Split chosen by the Board of Directors of the Company and described to us by the Company and its legal counsel, not entitled to one whole share following the Reverse Split (all such record holders of less than 16 pre-split shares, the "Cashed-Out Holders") will receive cash in the amount of $0.01 per pre-split share that was held by such record holder immediately prior to the Reverse Split (the "Consideration") (together with the Reverse Split, the "Transaction"). You have requested our opinion as to the fairness, from a financial point of view, to the Cashed-Out Holders of the Consideration to be received by the Cashed-Out Holders in the Transaction for their pre-split shares. We have not been requested to opine as to, and our opinion does not in any manner address the underlying business decision to proceed with or effect the Transaction, the structure used by the Company for the Transaction or the relative merits of the Transaction compared to any alternative business strategy or transaction in which Speed might engage.

We, as a customary part of our investment banking business, engage in the valuation of businesses and their securities in connection with mergers and acquisitions, underwriting and secondary distributions of securities, private placements and other valuations for estate, corporate and other purposes.  We will receive a fee from the Company for providing this opinion. This opinion fee is not contingent upon the consummation of the Transaction. Further, the Company has agreed to reimburse our expenses and indemnify us against certain liabilities that may arise in relation to our engagement.  In the ordinary course of our business, we and our affiliates may actively trade securities of the Company for our own account or the account of our customers and, accordingly, we may at any time hold a long or short position in such securities. We also have provided research coverage on the Company’s common stock from time to time.  We have performed financial services for the Company in the past and have received customary fees and expense reimbursements for such services. Specifically, during the two years preceding the date of this opinion, we served as the Company’s financial advisor for the acquisition of Fifth Gear, LLC, completed on November 24, 2014.

In connection with our review of the Transaction, and in arriving at our opinion, we have, among other things:

CONFIDENTIAL 

In conducting our review and in rendering our opinion, we have relied upon and assumed the accuracy, completeness and fairness of the financial, accounting and other information discussed with us, reviewed by us, provided to us or otherwise made available to us, and have not attempted to independently verify, and have not assumed responsibility for the independent verification, of such information. We have assumed that there have been no material changes in Speed’s assets, financial condition, results of operations, business or prospects since the date of the last financial statements made available to us.  Without limiting the generality of the foregoing, for the purpose of this opinion, we have assumed that Speed is not party to any material pending transaction, including any external financing, recapitalization, acquisition or merger, other than the Transaction.  With respect to financial forecasts and forward-looking information relating to Speed and the Transaction reviewed by us, we have assumed that such information reflects the best currently available estimates and judgments of Speed management.  We express no opinion as to any financial forecasts or other estimates or forward-looking information of Speed or the assumptions on which they were based.

In arriving at our opinion, we have not performed any appraisals or valuations of any specific assets or liabilities (fixed, contingent or other) of Speed or concerning the solvency or appraised or fair value of Speed, and have not been furnished with any such appraisals or valuations, and we have made no physical inspection of the property or assets of Speed.  We express no opinion regarding the liquidation value of any entity.  The analyses we performed in connection with this opinion were going concern analyses of an entity.  We were not requested to opine, and no opinion is hereby rendered, as to whether any analyses of an entity, other than as a going concern, is appropriate in the circumstances and, accordingly, we have performed no such analyses.

We have undertaken no independent analysis of any pending or threatened litigation, governmental proceedings or investigations, possible unasserted claims or other contingent liabilities, to which either Speed or its affiliates is a party or may be subject and at the Company’s direction and with its consent, our opinion makes no assumption concerning and therefore does not consider, the possible assertion of claims, outcomes, damages or recoveries arising out of any such matters.  No company or transaction used in any analysis for purposes of comparison is identical to Speed or the Transaction, respectively.  Accordingly, an analysis of the results of the comparisons is not mathematical; rather, it involves complex considerations and judgments about differences in the companies and transactions to which Speed and the Transaction were compared and other factors that could affect the public trading value or transaction value of the companies.

CONFIDENTIAL 

This opinion is necessarily based upon the information available to us, facts and circumstances and economic, market and other conditions as they exist and are subject to evaluation on the date hereof; events occurring after the date hereof could materially affect the assumptions used in preparing this opinion.  We have not undertaken to reaffirm or revise this opinion or otherwise comment upon any events occurring after the date hereof and do not have any obligation to update, revise or reaffirm this opinion.

This opinion is furnished pursuant to our engagement letter dated January 29, 2016.  This opinion is directed to the Board of Directors of the Company in connection with its consideration of the Transaction.  This opinion is not intended to be and does not constitute a recommendation to the Company or its shareholders.  This opinion shall not be published or otherwise used, nor shall any public references to us be made, without our prior written approval, except that this opinion may, if required by law, be included in its entirety in any filing made by Speed with the Securities and Exchange Commission in connection with the Transaction.  This opinion has been approved by the Lake Street Capital Markets, LLC fairness opinion committee.

This opinion addresses solely the fairness, from a financial point of view, of the Consideration to be paid by the Company to the Cashed-Out Holders for their pre-split shares and does not address any other term or agreement relating to the Transaction or to the shareholders of the Company who are not Cashed-Out Holders. We are not expressing any opinion herein as to the price at which shares of common stock of Speed have traded or may trade following announcement or consummation of the Transaction, or at any future time. We did not consider any benefits that may inure to any shareholder of Speed as a result of the Transaction or any related transactions other than in such party’s capacity as a Cashed-Out Holder of common stock of Speed, and we express no opinion as to the amount, nature or fairness of any consideration or items to be received in or as a result of the Transaction by other shareholders or persons relative to or in comparison with the Consideration to be received by the Cashed-Out Holders for their pre-split shares. We were not requested to opine as to, and this opinion does not address, the basic business decision to proceed with or effect the Transaction, the structure or tax effects of the Transaction, or any solvency or fraudulent conveyance consideration relating to the Transaction.  This opinion should not be considered legal or tax advice. We express no opinion as to the relative merits of the Transaction as compared to any alternative business strategies or transactions that might exist for the Company or any other party or the effect of any other transaction in which the Company or any other party might engage. With your consent and at your direction, we have assumed the Transaction does not involve a change of control under applicable state law.

Based upon and subject to the foregoing and based upon such other factors as we consider relevant, it is our opinion that, as of the date hereof, the Consideration to be received by the Cashed-Out Holders in the Transaction for their pre-split shares is fair, from a financial point of view, to such Cashed-Out Holders.

Sincerely,

Lake Street Capital Markets, LLC

Annex B

    , 2016

Dear Shareholders:

If, pursuant to the terms of the Transaction set forth in the accompanying Disclosure Document, you will receive cash from Speed Commerce, Inc. (the “Company”) for your fractional share resulting from the Reverse Split, you may, instead of receiving the cash payment of $0.01 per pre-split share, you may exercise dissenters’ rights under Minnesota Statutes Sections 302A.471 and 302A.473. If you validly exercise dissenters’ rights, you will receive cash equal to fair value of your fractional share. Fair value of your fractional share will be determined by a court if you follow the procedures of Minnesota Statutes Section 302A.473. The amount ultimately determined as fair value by the court may be equal to, more than or less than the $0.01 per pre-split share paid pursuant to the terms of the Transaction. A dissenter is entitled to judgment in cash if the amount of the fair value of the shares as determined by the court, plus interest, exceeds the amount remitted or offered by the Company pursuant to Minnesota Statutes Section 302A.473 Subd. 5.

A copy of Minnesota Statutes Sections 302A.471 and 302A.473 is included as Exhibit A to this Notice of Procedure to Assert Dissenters’ Rights. It contains detailed procedures you must follow and time deadlines you must meet in order to exercise your dissenters’ rights. Failure to follow those procedures or meet those time deadlines will result in loss of your right to dissent with respect to your shares of the Company. If you choose to exercise dissenters’ rights, the responsibility is all yours to make certain you perfect full and precise satisfaction of all the requirements of the Minnesota Statutes throughout the entire dissenting process; the Company is not required, and does not intend, to provide legal counsel or appraisal services for you in such process.

Because only shareholders of record may exercise dissenters’ rights, if you beneficially own Company shares that are held of record by brokers, fiduciaries, nominees or others and wish to exercise your dissenters’ rights, you must instruct the record holder of your Company shares to satisfy the requirements set forth in Minnesota Statutes Sections 302A.471 and 302A.473. If the record holder does not satisfy those requirements, the dissenters’ rights with regard to your shares will be lost.

This Notice of Procedure to Assert Dissenters’ Rights from the Company constitutes the notice required by Minnesota Statutes Sections 302A.471 and 302A.473 to be given to the shareholders of the Company following approval of the transaction by the Board of Directors of the Company.

IN ORDER TO FOR YOU TO ASSERT DISSENTERS RIGHTS FOR YOUR SHARES, THE FOLLOWING MATERIALS MUST BE RECEIVED BY THE COMPANY NOT LATER THAN 30 DAYS AFTER THE DATE OF THIS NOTICE:

The address to which these materials must be sent is as follows:

THE METHOD OF DELIVERY OF ALL MATERIALS, INCLUDING STOCK CERTIFICATES, IS AT THE ELECTION AND RISK OF THE SHAREHOLDER. IF DELIVERY IS BY MAIL, INSURED REGISTERED MAIL, RETURN RECEIPT REQUESTED, IS RECOMMENDED.

A SHAREHOLDER WHO FAILS TO DEPOSIT STOCK CERTIFICATES AND SUBMIT A “DEMAND FOR PAYMENT UNDER DISSENTERS’ RIGHTS” AS REQUIRED WILL LOSE THE RIGHT TO EXERCISE DISSENTERS’ RIGHTS.

After                     , or after the Company receives a valid “Demand for Payment Under Dissenters’ Rights” accompanied by stock certificates, whichever is later, the Company will, except as provided in Minnesota Statutes Section 302A.473, Subd. 5(b), with respect to certain shareholders who have acquired their shares after the date the Transaction was first announced to the public, remit to each shareholder who has complied with the provisions of Minnesota Statutes Section 302A.473, Subd. 4, the amount the Company estimates to be the fair value of the shares, with interest commencing five days after the Effective Date (as such term is defined in the accompanying Disclosure Document) through the date of payment, calculated at the rate provided in Minnesota Statutes Section 549.09 for interest on verdicts and judgments (which is 4.0% for the calendar year ended December 31, 2016), accompanied by certain financial statements, an estimate of the Company’s estimate of fair value, a description of the method used by the Company for such estimate, a copy of Minnesota Statutes Sections 302A.471 and 302A.473 and a brief description of the procedure to be followed if the dissenting shareholder believes he is entitled to demand supplemental payment.

If a shareholder believes that the amount remitted or offered by the Company is less than the fair value of the shares, with interest, such shareholder may give written notice to the Company of his, her, or its estimate of fair value, with interest, within 30 days after the Company mails such remittance or offer, and demand payment of the difference. Unless a shareholder makes such a demand within such 30-day period, the shareholder will be entitled only to the amount remitted or offered by the Company.

Within 60 days after the Company receives such a demand from a shareholder properly requesting supplemental payment, the Company will be required either to pay such shareholder the amount demanded or agreed to after discussion between the shareholder and the Company or file in court a petition requesting the court to determine the fair value of the shares, with interest. In such event, the court will then determine whether shareholders making such demand have fully complied with the provisions of Minnesota Statutes Section 302A.473, and will determine the fair value of the shares, taking into account all factors the court finds relevant (including, without limitation, the recommendation of any appraisers which may have been appointed by the court), computed by any method that the court in its discretion sees fit to use, whether or not used by the Company or the shareholder. The fair value of the shares as determined by the court is binding upon all shareholders. The costs and expenses of the court proceedings will be assessed against the Company, except that the court may assess part or all of those costs and expenses against a shareholder whose action in demanding payment is found to be arbitrary, vexatious or not in good faith.

Once the Company receives your original “Demand for Payment Under Dissenters’ Rights” properly completed in the form attached hereto as Exhibit B, you may not transfer your Company share. You must comply with this restriction in order to continue your exercise of dissenters’ rights.

You may wish to review the reports, proxy statements and other information that the Company has filed with the Securities and Exchange Commission (“SEC”) before you decide whether to exercise dissenters’ rights in connection with the Transaction. You can read and copy any materials that the Company has filed with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. You can obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company has filed its reports and proxy statements with the SEC electronically. The SEC maintains an Internet site that contains reports, proxy statements and other information regarding the Company. The address of the SEC Internet site is http://www.sec.gov.

Sincerely,

Speed Commerce, Inc.

EXHIBIT A

302A.471 Rights Of Dissenting Shareholders.

Subdivision 1. Actions creating rights. A shareholder of a corporation may dissent from, and obtain payment for the fair value of the shareholder’s shares in the event of, any of the following corporate actions:

(a) unless otherwise provided in the articles, an amendment of the articles that materially and adversely affects the rights or preferences of the shares of the dissenting shareholder in that it:

(1) alters or abolishes a preferential right of the shares;

(2) creates, alters, or abolishes a right in respect of the redemption of the shares, including a provision respecting a sinking fund for the redemption or repurchase of the shares;

(3) alters or abolishes a preemptive right of the holder of the shares to acquire shares, securities other than shares, or rights to purchase shares or securities other than shares;

(4) excludes or limits the right of a shareholder to vote on a matter, or to cumulate votes, except as the right may be excluded or limited through the authorization or issuance of securities of an existing or new class or series with similar or different voting rights; except that an amendment to the articles of an issuing public corporation that provides that section 302A.671 does not apply to a control share acquisition does not give rise to the right to obtain payment under this section; or

(5) eliminates the right to obtain payment under this subdivision;

(b) a sale, lease, transfer, or other disposition of property and assets of the corporation that requires shareholder approval under section 302A.661, subdivision 2, but not including a disposition in dissolution described in section 302A.725, subdivision 2, or a disposition pursuant to an order of a court, or a disposition for cash on terms requiring that all or substantially all of the net proceeds of disposition be distributed to the shareholders in accordance with their respective interests within one year after the date of disposition;

(c) a plan of merger, whether under this chapter or under chapter 322B, to which the corporation is a constituent organization, except as provided in subdivision 3, and except for a plan of merger adopted under section 302A.626;

(d) a plan of exchange, whether under this chapter or under chapter 322B, to which the corporation is a party as the corporation whose shares will be acquired by the acquiring organization, except as provided in subdivision 3;

(e) a plan of conversion adopted by the corporation;

(f) an amendment to the articles in connection with a combination of a class or series under section 302A.402 that reduces the number of shares of the class or series owned by the shareholder to a fraction of a share if the corporation exercises its right to repurchase the fractional share so created under 302A.423; or

(g) any other corporate action taken pursuant to a shareholder vote with respect to which the articles, the bylaws, or a resolution approved by the board directs that dissenting shareholders may obtain payment for their shares.

Subd. 2. Beneficial owners. (a) A shareholder shall not assert dissenters’ rights as to less than all of the shares registered in the name of the shareholder, unless the shareholder dissents with respect to all the shares that are beneficially owned by another person but registered in the name of the shareholder and discloses the name and address of each beneficial owner on whose behalf the shareholder dissents. In that event, the rights of the dissenter shall be determined as if the shares as to which the shareholder has dissented and the other shares were registered in the names of different shareholders.

(b) A beneficial owner of shares who is not the shareholder may assert dissenters’ rights with respect to shares held on behalf of the beneficial owner, and shall be treated as a dissenting shareholder under the terms of this section and section 302A.473, if the beneficial owner submits to the corporation at the time of or before the assertion of the rights a written consent of the shareholder.

Subd. 3. Rights not to apply. (a) Unless the articles, the bylaws, or a resolution approved by the board otherwise provide, the right to obtain payment under this section does not apply to a shareholder of (1) the surviving corporation in a merger with respect to shares of the shareholder that are not entitled to be voted on the merger and are not canceled or exchanged in the merger or (2) the corporation whose shares will be acquired by the acquiring organization in a plan of exchange with respect to shares of the shareholder that are not entitled to be voted on the plan of exchange and are not exchanged in the plan of exchange.

(b) If a date is fixed according to section 302A.445, subdivision 1, for the determination of shareholders entitled to receive notice of and to vote on an action described in subdivision 1, only shareholders as of the date fixed, and beneficial owners as of the date fixed who hold through shareholders, as provided in subdivision 2, may exercise dissenters’ rights.

(c) Notwithstanding subdivision 1, the right to obtain payment under this section, other than in connection with a plan of merger adopted under section 302A.621, is limited in accordance with the following provisions:

(1) The right to obtain payment under this section is not available for the holders of shares of any class or series of shares that is listed on the New York Stock Exchange or the American Stock Exchange or designated as a national market security on the Nasdaq Stock Market.

(2) The applicability of clause (1) is determined as of:

(i)  the record date fixed to determine the shareholders entitled to receive notice of, and to vote at, the meeting of shareholders to act upon the corporate action described in subdivision 1; or

(ii) the day before the effective date of corporate action described in subdivision 1 if there is no meeting of shareholders.

(3) Clause (1) is not applicable, and the right to obtain payment under this section is available pursuant to subdivision 1, for the holders of any class or series of shares who are required by the terms of the corporate action described in subdivision 1 to accept for such shares anything other than shares, or cash in lieu of fractional shares, of any class or any series of shares of a domestic or foreign corporation, or any other ownership interest of any other organization, that satisfies the standards set forth in clause (1) at the time the corporate action becomes effective.

Subd. 4. Other rights. The shareholders of a corporation who have a right under this section to obtain payment for their shares, or who would have the right to obtain payment for their shares absent the exception set forth in paragraph (c) of subdivision 3, do not have a right at law or in equity to have a corporate action described in subdivision 1 set aside or rescinded, except when the corporate action is fraudulent with regard to the complaining shareholder or the corporation.

302A.473 Procedures For Asserting Dissenters’ Rights.

Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this subdivision have the meanings given them.

(b) “Corporation” means the issuer of the shares held by a dissenter before the corporate action referred to in section 302A.471, subdivision 1 or the successor by merger of that issuer.

(c) “Fair value of the shares” means the value of the shares of a corporation immediately before the effective date of the corporate action referred to in section 302A.471, subdivision 1.

(d) “Interest” means interest commencing five days after the effective date of the corporate action referred to in section 302A.471, subdivision 1, up to and including the date of payment, calculated at the rate provided in section 549.09 for interest on verdicts and judgments.

Subd. 2. Notice of action. If a corporation calls a shareholder meeting at which any action described in section 302A.471, subdivision 1 is to be voted upon, the notice of the meeting shall inform each shareholder of the right to dissent and shall include a copy of section 302A.471 and this section and a brief description of the procedure to be followed under these sections.

Subd. 3. Notice of dissent. If the proposed action must be approved by the shareholders and the corporation holds a shareholder meeting, a shareholder who is entitled to dissent under section 302A.471 and who wishes to exercise dissenters’ rights must file with the corporation before the vote on the proposed action a written notice of intent to demand the fair value of the shares owned by the shareholder and must not vote the shares in favor of the proposed action.

Subd. 4. Notice of procedure; deposit of shares. (a) After the proposed action has been approved by the board and, if necessary, the shareholders, the corporation shall send to (i) all shareholders who have complied with subdivision 3, (ii) all shareholders who did not sign or consent to a written action that gave effect to the action creating the right to obtain payment under section 302A.471, and (iii) all shareholders entitled to dissent if no shareholder vote was required, a notice that contains:

(1) the address to which a demand for payment and certificates of certificated shares must be sent in order to obtain payment and the date by which they must be received;

(2) any restrictions on transfer of uncertificated shares that will apply after the demand for payment is received;

(3) a form to be used to certify the date on which the shareholder, or the beneficial owner on whose behalf the shareholder dissents, acquired the shares or an interest in them and to demand payment; and

(4) a copy of section 302A.471 and this section and a brief description of the procedures to be followed under these sections.

(b) In order to receive the fair value of the shares, a dissenting shareholder must demand payment and deposit certificated shares or comply with any restrictions on transfer of uncertificated shares within 30 days after the notice required by paragraph (a) was given, but the dissenter retains all other rights of a shareholder until the proposed action takes effect.

Subd. 5. Payment; return of shares. (a) After the corporate action takes effect, or after the corporation receives a valid demand for payment, whichever is later, the corporation shall remit to each dissenting shareholder who has complied with subdivisions 3 and 4 the amount the corporation estimates to be the fair value of the shares, plus interest, accompanied by:

(1) the corporation’s closing balance sheet and statement of income for a fiscal year ending not more than 16 months before the effective date of the corporate action, together with the latest available interim financial statements;

(2) an estimate by the corporation of the fair value of the shares and a brief description of the method used to reach the estimate; and

(3) a copy of section 302A.471 and this section, and a brief description of the procedure to be followed in demanding supplemental payment.

(b) The corporation may withhold the remittance described in paragraph (a) from a person who was not a shareholder on the date the action dissented from was first announced to the public or who is dissenting on behalf of a person who was not a beneficial owner on that date. If the dissenter has complied with subdivisions 3 and 4, the corporation shall forward to the dissenter the materials described in paragraph (a), a statement of the reason for withholding the remittance, and an offer to pay to the dissenter the amount listed in the materials if the dissenter agrees to accept that amount in full satisfaction. The dissenter may decline the offer and demand payment under subdivision 6. Failure to do so entitles the dissenter only to the amount offered. If the dissenter makes demand, subdivisions 7 and 8 apply.

(c) If the corporation fails to remit payment within 60 days of the deposit of certificates or the imposition of transfer restrictions on uncertificated shares, it shall return all deposited certificates and cancel all transfer restrictions. However, the corporation may again give notice under subdivision 4 and require deposit or restrict transfer at a later time.

Subd. 6. Supplemental payment; demand. If a dissenter believes that the amount remitted under subdivision 5 is less than the fair value of the shares plus interest, the dissenter may give written notice to the corporation of the dissenter’s own estimate of the fair value of the shares, plus interest, within 30 days after the corporation mails the remittance under subdivision 5, and demand payment of the difference. Otherwise, a dissenter is entitled only to the amount remitted by the corporation.

Subd. 7. Petition; determination. If the corporation receives a demand under subdivision 6, it shall, within 60 days after receiving the demand, either pay to the dissenter the amount demanded or agreed to by the dissenter after discussion with the corporation or file in court a petition requesting that the court determine the fair value of the shares, plus interest. The petition shall be filed in the county in which the registered office of the corporation is located, except that a surviving foreign corporation that receives a demand relating to the shares of a constituent domestic corporation shall file the petition in the county in this state in which the last registered office of the constituent corporation was located. The petition shall name as parties all dissenters who have demanded payment under subdivision 6 and who have not reached agreement with the corporation. The corporation shall, after filing the petition, serve all parties with a summons and copy of the petition under the Rules of Civil Procedure. Nonresidents of this state may be served by registered or certified mail or by publication as provided by law. Except as otherwise provided, the Rules of Civil Procedure apply to this proceeding. The jurisdiction of the court is plenary and exclusive. The court may appoint appraisers, with powers and authorities the court deems proper, to receive evidence on and recommend the amount of the fair value of the shares. The court shall determine whether the shareholder or shareholders in question have fully complied with the requirements of this section, and shall determine the fair value of the shares, taking into account any and all factors the court finds relevant, computed by any method or combination of methods that the court, in its discretion, sees fit to use, whether or not used by the corporation or by a dissenter. The fair value of the shares as determined by the court is binding on all shareholders, wherever located. A dissenter is entitled to judgment in cash for the amount by which the fair value of the shares as determined by the court, plus interest, exceeds the amount, if any, remitted under subdivision 5, but shall not be liable to the corporation for the amount, if any, by which the amount, if any, remitted to the dissenter under subdivision 5 exceeds the fair value of the shares as determined by the court, plus interest.

Subd. 8. Costs; fees; expenses. (a) The court shall determine the costs and expenses of a proceeding under subdivision 7, including the reasonable expenses and compensation of any appraisers appointed by the court, and shall assess those costs and expenses against the corporation, except that the court may assess part or all of those costs and expenses against a dissenter whose action in demanding payment under subdivision 6 is found to be arbitrary, vexatious, or not in good faith.

(b) If the court finds that the corporation has failed to comply substantially with this section, the court may assess all fees and expenses of any experts or attorneys as the court deems equitable. These fees and expenses may also be assessed against a person who has acted arbitrarily, vexatiously, or not in good faith in bringing the proceeding, and may be awarded to a party injured by those actions.

(c) The court may award, in its discretion, fees and expenses to an attorney for the dissenters out of the amount awarded to the dissenters, if any.

EXHIBIT B

DEMAND FOR PAYMENT
UNDER DISSENTERS’ RIGHTS

NOTE – DO NOT USE THIS FORM IF YOU ARE RETURNING YOUR CERTIFICATES IN ORDER TO RECEIVE THE $0.01 PER PRE-SPLIT SHARE BEING PAID TO SHAREHOLDERS WHO OWN ONLY A FRACTIONAL SHARE FOLLOWING THE REVERSE STOCK SPLIT. (Use the “Letter of Transmittal” form provided by the Company or its transfer agent, and NOT this form, if you are submitting your shares in order to receive the $0.01 per pre-split share being paid in the Transaction.) This “Demand for Payment Under Dissenters’ Rights” form should be used ONLY by those, if any, who are exercising dissenters’ rights.

In connection with the process for exercising dissenters’ rights, the undersigned, pursuant to Minnesota Statutes Section 302A.473, Subd. 4(b), hereby encloses with this “Demand for Payment Under Dissenters’ Rights” and hereby deposits with Speed Commerce, Inc. (the “Company”), the shares of Common Stock of the Company represented by the certificates listed below, and the undersigned demands payment therefor under such dissenters’ rights:

DESCRIPTION OF SHARES DEPOSITED

(To be Completed by the Shareholder)

(ATTACH A SEPARATE SHEET IF ADDITIONAL SPACE IS NECESSARY AND CHECK HERE [   ])

The undersigned hereby transfers all right, title and interest in the above-described shares to the Company and represents and warrants to the Company that (i) the undersigned has full authority to transfer the above-described shares and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, charges, encumbrances and claims, and (ii) the undersigned, or the beneficial owner on whose behalf the undersigned is submitting this “Demand for Payment Under Dissenters’ Rights,” acquired the shares on the date(s) set forth above.

All authority conferred hereby shall survive the death or incapacity of the undersigned, and all obligations of the undersigned hereunder shall be binding upon the undersigned’s heirs, representatives and assigns.

[Signature page follows]

Signature page to “Demand for Payment Under Dissenters’ Rights”

 B-2