Item 1.01.
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Entry Into a Material Definitive Agreement.
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On March 23, 2017,
Akoustis Technologies, Inc. (the “Company”) entered into a Definitive Asset Purchase Agreement (the “AP Agreement”)
and a Definitive Real Property Purchase Agreement (“RP Agreement”) (collectively, the “Agreements”) with
The Research Foundation for the State University of New York (“RF-SUNY”) and Fuller Road Management Corporation (“FRMC”),
an affiliate of RF-SUNY (collectively, “Sellers”), respectively, to acquire certain specified assets,
including
STC-MEMS, a semiconductor wafer-manufacturing operation and microelectromechanical systems (MEMS) business with associated wafer-manufacturing
tools, as well as the real estate and improvements associated with the facility located in Canandaigua, New York, which is used
in the operation of STC-MEMs (the assets and real estate and improvements referred to together herein as the “Acquired Business”).
The Company also agreed to assume substantially all of the on-going obligations of the Acquired Business incurred in the ordinary
course of business
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Pursuant to the Agreements,
and subject to the satisfaction or waiver of certain conditions, the Company will purchase the Acquired Business from Sellers for
an aggregate purchase price of $2.75 million (subject to adjustment as provided in the AP Agreement), payable in cash, at closing.
The Company has delivered $10,000 into escrow as a good faith deposit to be refunded to the Company only under certain limited
circumstances, such as Sellers’ failure to complete the sale or the Company’s termination of the Agreements due to Sellers’
failure to satisfy a condition precedent to closing not waived by the Company.
Consummation of the transactions contemplated
by the Agreements is subject to the satisfaction of certain conditions precedent, including, but not limited to, delivery
to the Company of the financial books and records of the Acquired Business sufficient for the completion of an audit, certain third-party
consents, and other customary conditions of closing. The Company has made various representations and warranties and
covenants in the Agreements that are customary for a company acting as a buyer in its industry except that the Company is required
to pay to FRMC a penalty, as set forth below, if the Company sells the property subject to the RP Agreement within three (3) years
after the date of the RP Agreement for an amount in excess of $1,750,000, subject to certain enumerated exceptions. The penalty
imposed shall be equivalent to the amount that the sales price of the property exceeds $1,750,000 up to the maximum penalty (“Maximum
Penalty”) defined below:
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Maximum Penalty
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Year 1
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$5,960,000
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Year 2
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$3,973,333
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Year 3
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$1,986,667
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Year 4
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0
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While the Agreement contemplates that a closing of the sale of the Acquired Business (the “Closing”)
will take place on or about June 30, 2017, or up to 14 additional days in the Company’s discretion if certain required consents
have not been obtained, the conditions precedent to closing are such that there can be no assurance that the Company will complete
its acquisition of the Acquired Business in that time or at all.
The Acquired Business
currently consists of a 120,000 square foot commercial wafer-manufacturing facility, including Class 100/Class 1000 cleanroom space,
located in Canandaigua, New York, 57-acres of real estate and improvements associated with the manufacturing facility, 150-mm silicon
MEMS wafer fab operations, including semiconductor manufacturing tools, an existing silicon-based MEMS business with historical
annual revenues of approximately $3.0 million from multiple customers, Trusted Foundry accreditation for MEMS processing, packaging
and assembly, a 30 employee workforce that will be offered employment upon the Closing and two existing tenants with multi-year
leases.
The AP Agreement and
RP Agreement have been included to provide investors and shareholders with information regarding their terms. They are not intended
to provide any other factual information about the Company. Each of the Agreements contains representations and warranties that
each party thereto made to and solely for the benefit of each other as of specific dates. The assertions embodied in those representations
and warranties were made solely for purposes of the contract between the parties thereto and may be subject to important qualifications
and limitations agreed by the parties in connection with negotiating the terms of the contracts. Moreover, some of those representations
and warranties (a) may not be accurate or complete as of any other specified date, (b) may be subject to a contractual
standard of materiality different from that generally applicable to stockholders, or (c) may have been used for the purpose
of allocating risk between the parties to the AP Agreement and RP Agreement rather than establishing matters as facts. For the
foregoing reasons, the representations and warranties should not be relied upon as statements of factual information.
The foregoing description
of the AP Agreement and RP Agreement contained in this Item 1.01 does not purport to be complete and is qualified in its entirety
by reference to the AP Agreement and RP Agreement, copies of which are filed herewith as Exhibits 2.1 and 2.2, and are incorporated
herein by reference.
Forward–Looking Statements
The foregoing contains
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
in this report that are not descriptions of historical facts are forward-looking statements that are based on management’s
current expectations and assumptions and are subject to risks and uncertainties. In some cases, you can identify forward-looking
statements by terminology including “anticipates,” “believes,” “can,” “continue,”
“could,” “estimates,” “expects,” “intends,” “may,” “plans,”
“potential,” “predicts,” “should,” “will,” “would” or the negative
of these terms or other comparable terminology. Factors that could cause actual results to differ materially from those currently
anticipated include, without limitation:
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the ability to obtain any required approvals and consents for the transactions contemplated herein
or to satisfy other conditions to the transactions on the proposed terms and timeframe;
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the possibility that the transactions do not close when expected or at all, or that the parties
may be required to modify aspects of the transactions to receive any required approvals and consents;
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the outcome of pending or future litigation;
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our ability to successfully integrate the Acquired Business into our operations;
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risks relating to the results of our research and development activities, including uncertainties
relating to semiconductor process manufacturing;
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the early stage of our BulkONE
®
technology presently under development;
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our need for substantial additional funds in order to continue our operations and the uncertainty
of whether we will be able to obtain the funding we need;
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our ability to retain or hire key scientific, engineering or management personnel;
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our ability to protect our intellectual property rights that are valuable to our business, including
patent and other intellectual property rights;
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our dependence on third-party manufacturers, suppliers, research organizations, testing laboratories
and other potential collaborators;
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our ability to successfully market and sell our technologies;
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the size and growth of the potential markets for any of our technologies, and the rate and degree
of market acceptance of any of our technologies;
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competition in our industry; and
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regulatory developments in the U.S. and foreign countries.
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In light of these
risks, uncertainties and assumptions, the forward-looking statements regarding future events and circumstances discussed in this
report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking
statements. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements
included in this report speak only as of the date hereof, and, except as required by law, we undertake no obligation to update
publicly or privately any forward-looking statements for any reason after the date of this presentation to conform these statements
to actual results or to changes in our expectations. This report does not constitute an offer to sell, or the solicitation of
any offer to buy, any securities of the Company, or any other entity whatsoever. Any representation to the contrary by any party
should be ignored.