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Item 3.02
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Unregistered Sales of Equity Securities.
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Altair Engineering Inc., a Delaware corporation (“Altair,” or the “Company”), has entered into a stock purchase agreement (the “Stock Purchase Agreement”), dated as of October 7, 2019, pursuant to which the Company has acquired 97% of the outstanding capital stock of Polliwog Co., Ltd., a privately-held, joint stock company organized and existing under the laws of Korea (“Polliwog”), from Polliwog’s existing shareholders. Simultaneously, the Company entered into a separate stock purchase agreement with one of such stockholders to acquire the remaining 3% of the outstanding Polliwog shares in October 2022 (the “Second Stock Purchase Agreement”).
Polliwog is engaged in the business of developing, researching and selling electronic design automation (EDA) software and hardware, and providing maintenance and consulting services in connection with its products, including the UDE Platform and software products marketed under the PollEx name such as, without limitation, PollEx PCB products, PollEx Logic, PollEx CAM, PollEx Cross Probe, PollEx BOM, PollEx Metal Mask Manager, PollEx JIG Generator and Pollex UPE.
The consideration under the Stock Purchase Agreement consists of $10.7 million in cash, subject to a customary working capital adjustment, and an aggregate of 459,539 shares (the “SPA Stock Consideration”) of the Company’s Class A Common Stock, par value $0.0001 per share. Forty percent of the SPA Stock Consideration (i.e., 183,815 shares) was issued at closing (which occurred concurrently with the execution of that Stock Purchase Agreement) and is subject to customary securities law restrictions on transferability for the first six months after the closing. The remaining sixty percent (an aggregate of 275,724 shares) of the SPA Stock Consideration will be issuable in equal installments of 91,908 shares on each of the one, two and three year anniversaries of the closing, subject to potential reduction in certain circumstances. The Company will pay an additional $0.3 million in cash and issue an additional 14,213 shares of its Class A Common Stock (together, with the SPA Stock Consideration, the “Stock Consideration”) at the closing under the Second Stock Purchase Agreement, representing three percent of the aggregate consideration to be paid by Altair to acquire all of Polliwog’s outstanding capital stock.
In connection with the closing under the Stock Purchase Agreement, each of the existing Polliwog stockholders has entered into customary restrictive covenants agreements and releases in favor of the Company.
All shares of Class A Common Stock issued or to be issued as Stock Consideration were or will be issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act. Polliwog’s existing stockholders provided customary representations for a private placement of securities and agreed to customary restrictions on transferability.