TIDMPPIX
RNS Number : 0695S
ProPhotonix Limited
11 November 2021
11 November 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
RECOMMED CONDITIONAL CASH ACQUISITION
of
ProPhotonix Limited ("ProPhotonix" or the "Company")
by Exaktera, LLC ("Exaktera")
through its wholly owned subsidiary PPL Merger Sub Inc. ("Merger
Sub")
to be effected under the terms of a merger agreement by and
among ProPhotonix, Exaktera and Merger Sub
Proposed Cancellation from Trading on AIM
Related Party Transaction
ProPhotonix, a designer and manufacturer of LED illumination
systems and laser diode modules with operations in Ireland and the
United Kingdom, is pleased to announce that it has reached an
agreement on the terms of a recommended acquisition ("Acquisition")
under which Exaktera will, subject to stockholder approval, acquire
all of the outstanding shares of ProPhotonix ("Company Common
Stock") for an aggregate consideration of approximately $11,600,000
(which equates to GBP8,700,000 as of the date of the Merger
Agreement, as defined below) in cash (or $0.117 per share) pursuant
to the terms of an agreement and plan of merger entered into on 10
November 2021 between ProPhotonix, Exaktera, Merger Sub and others
(the "Merger Agreement"). All amounts shown in Pounds Sterling
(GBP) are based on the closing foreign currency rate as at 10
November 2021.
Exaktera was founded by Union Park Capital ("Union Park") to act
as a holding company for a group of companies Union Park is
building in the high-precision OEM market.
The ProPhotonix Board of Directors (the "Board") unanimously
approved the Merger Agreement and has recommended that the
Stockholders vote in favour of adoption of the Merger Agreement. As
described in greater detail below, this transaction will require
the approval of Stockholders at the Stockholders Meeting of the
Company to be held on 15 December 2021 as described below. At the
same time, and conditional upon the successful approval of the
Merger Agreement, the Company is also seeking Stockholder approval
for the proposed cancellation of the Company's common stock from
trading on AIM, a market of the London Stock Exchange. Further
details of which, including a timetable of principal events, are
set out below.
Certain capitalized terms used in this announcement have the
meanings specified in the Appendix affixed hereto.
Key terms of the Acquisition
-- Under the terms of the Merger Agreement, Stockholders will be
entitled to receive $0.117 (which equates to GBP0.087 as of the
date of the Merger Agreement) for each share of Company Common
Stock.
-- The Acquisition Price is fixed and will be paid in US Dollars.
-- The Acquisition Price values the entire issued and to be
issued share capital of the Company at approximately $11.6 million
(which equates to GBP8.7 million as of the date of the Merger
Agreement) and represents a premium of:
1. approximately 54.6% over the thirty trading day average
closing price of the Company's Common Stock on the OTC market of
$0.076 ending on 9 November 2021; and
2. approximately 53.8% over the thirty trading day average
closing price of the Company's Common Stock on AIM of 0.056 pence
ending on 9 November 2021.
-- As at the date of this announcement, ProPhotonix has
93,300,402 shares of Company Common Stock outstanding and admitted
to trading on AIM.
-- Tim Losik, the Company's CEO, has agreed to personally
indemnify the acquiror for damages up to $ 341,362 resulting from
the potential breach of certain representations and warranties by
the Company in the merger agreement.
-- Merger Sub is a newly incorporated company formed for the
purpose of implementing the Acquisition. Merger Sub has not carried
on any business prior to the date of the Merger Agreement and has
not prepared any historical financial accounts. The Acquisition is
proposed as a merger of Merger Sub with and into the Company, in
accordance with the Delaware General Corporation Law, with the
Company being the surviving corporation. The Acquisition is not
governed by the UK City Code on Takeovers and Mergers ("Takeover
Code") by virtue of ProPhotonix's status as a corporation
incorporated in Delaware with its registered office located outside
the UK. Accordingly, the Acquisition is not subject to the
jurisdiction of, nor is it being regulated by, the Panel on
Takeovers and Mergers in the UK and Stockholders will not be
afforded the protections of the Takeover Code.
-- The Acquisition is subject to the approval of Stockholders at
the Stockholders Meeting of the Company to be convened by way of an
explanatory circular and notice of meeting ("Proxy Statement") to
be published as soon as practicable and, in any event, within 30
days of the date of this Announcement. A copy of this document will
also be available, pursuant to the Aim Rules for Companies, on the
Company's website (www.prophotonix.com) from that date. Please see
"Expected Timetable of Principal Events" below. At the Stockholders
Meeting, the Stockholders will be asked to consider and vote on two
resolutions (the "Resolutions") as follows:
1. a resolution approving and adopting the Acquisition and the
terms of the Merger Agreement (the "Merger Resolution"), which
resolution will require approval by Stockholders holding a majority
(greater than 50%) of the issued and outstanding shares of Company
Common Stock entitled to vote at the Stockholders Meeting; and
2. a resolution approving the cancellation of the admission of
the Company's Common Stock from trading on AIM prior to the closing
of the Acquisition (the "Delisting Resolution"), which resolution
will require approval by Stockholders holding at least 75% of the
votes cast at the Stockholders Meeting.
-- In connection with the entry into the Merger Agreement, Tim
Losik, holding approximately 15.6 percent of the outstanding
Company Common Stock, entered into the Joinder Agreement, which,
among other things, obligates him to affirmatively vote all of his
shares of Company Common Stock in favour of the Resolutions and
against any competing proposal.
-- The Board considers the terms of the Acquisition to be fair
to all Stockholders. Accordingly, the Board has unanimously
approved the transaction and intends unanimously to recommend that
the Stockholders vote in favour of the Resolutions to be proposed
at the Stockholders Meeting.
-- The Proxy Statement, which will be posted to stockholders
shortly after this Announcement, incorporates a notice convening
the Stockholders Meeting at 11:30 a.m. Eastern Time (U.S.) on 15
December 2021 at the offices of Nutter, McClennen & Fish LLP,
155 Seaport Boulevard, Boston, Massachusetts, 02210, United
States.
-- The Acquisition is subject to the satisfaction or waiver of
the conditions and further terms that are set out in the Merger
Agreement and will be further described in the Proxy Statement.
-- Conditional to the Acquisition closing, Tim Losik, the
president and chief executive officer of the Company will receive a
performance/retention bonus of US$300,000 (which equates to
GBP225,000 as of the date of the Merger Agreement) (the
"Performance Bonus") in recognition of the many contributions he
made to the Company, including exceptional leadership through
challenging periods (including but not limited to those resulting
from the COVID-19 global pandemic), reducing the debt burden on the
Company (thereby eliminating the Company's dependence on lenders
and debt), strengthening the Company's balance sheet, voluntarily
reducing his compensation to reduce expenses during the COVID-19
pandemic and then being the last employee to reinstate his full
salary, frequent international travel on behalf of the Company,
improved operational and financial results, leadership in
connection with the Company's efforts to identify and consummate a
favorable transaction with an acquiror and his willingness to
remain an employee of the Company subsequent to the closing of the
transaction.
The bonus was approved by the Governance, Nominations and
Remuneration committee of the Board at a meeting held on 10
November 2021. Given the nature of this payment, it is deemed to be
a related party transaction pursuant to AIM Rule 13 of the AIM
Rules for Companies, and further details on this are set out
below.
The Board considers the Acquisition to be advisable and in the
best interests of the Stockholders. Accordingly , the Board
unanimously recommends that Stockholders vote in favour of the
Resolutions to be proposed at the Stockholders Meeting.
Proposed Cancellation
If the Merger Agreement is approved then, following the
associated Merger, the Common Stock of the Company will cease to
exist in its current form and accordingly the Directors have agreed
it is necessary to seek the Cancellation. In accordance with Rule
41 of the AIM Rules for Companies (" AIM Rules "), the Company has
notified the London Stock Exchange of the proposed Cancellation
which is conditional upon the consent of not less than 75 per cent.
of votes cast by the Company's stockholders in the meeting detailed
above
Subject to the relevant resolutions being passed at the
stockholder meeting, it is anticipated that trading in the Common
Stock on AIM will cease at close of business on 16 December 2021
with Cancellation taking effect at 7.00 am on 17 December 2021. A
full timetable of events is set out below.
Upon Cancellation becoming effective, WH Ireland will cease to
be nominated adviser and broker to the Company and the Company will
no longer be required to comply with the AIM Rules.
The principal effects of the Cancellation would be that:
-- there would no longer be a formal market mechanism enabling
Stockholders to trade their shares on AIM or any other market or
trading exchange;
-- the Company would not be bound to announce material events,
administrative changes or material transactions nor to announce
interim or final results;
-- the Company would no longer be required to comply with any of
the additional specific corporate governance requirements for
companies admitted to trading on AIM; and
-- the Company would no longer be subject to the AIM Rules and
Stockholders will no longer be required to vote on certain matters
as provided in the AIM Rules.
Related Party Transaction
The payment of the Performance Bonus is deemed to be a related
party transaction pursuant to AIM Rule 13 of the AIM Rules for
Companies. The Company's board of directors (excluding Tim Losik,
who is the recipient of the Performance Bonus) having consulted
with Company's Nominated Adviser, WH Ireland Limited, consider that
the terms of the Performance Bonus are fair and reasonable insofar
as the Stockholders of the Company are concerned.
For Further Information:
ProPhotonix Limited:
Tim Losik
President and CEO
Tel: +1 603 893 8778
Email: ir@prophotonix.com
WH IRELAND LIMITED (NOMAD and Broker):
Katy Mitchell/Harry Ansell
Nominated Adviser and Broker
Tel: +44 (0) 20 7220 1666
Expected Timetable of Principal Events
Event Time and/or Date
Execution of Merger Agreement 10 November 2021
-------------------------------------
Last time for lodging the Form 11:30 a.m. Eastern Time (U.S.)
of Direction on 10 December 2021***
-------------------------------------
Record Date for determining the 11 November 2021
Stockholders entitled to vote
at and receive notice of the
Stockholders Meeting
-------------------------------------
Last time for lodging the Form 11:30 a.m. Eastern Time (U.S.)
of Proxy on 13 December 2021***
-------------------------------------
Last time for lodging the Form 11:30 a.m. Eastern Time (U.S.)
of Declarations on 13 December 2021***
-------------------------------------
Stockholders Meeting of Company 11:30 a.m. Eastern Time (U.S.)
on 15 December 2021
-------------------------------------
Distribution of the Proxy Statement 16 November 2021
and Notice of Stockholders Meeting
-------------------------------------
Last day of dealing in Company 16 December 2021*
Common Stock on AIM
-------------------------------------
Closing of the Acquisition 16 December 2021*
-------------------------------------
Payment of Acquisition Price 16 December 2021*
to Stockholders commences**
-------------------------------------
Termination of the Depository 7:00 a.m. London Time on 17 December
Interest Register 2021
-------------------------------------
Date of Cancellation 7:00 a.m. London time on 17 December
2021*
-------------------------------------
*Subject to satisfaction or waiver of other conditions to
closing as provided for in the Merger Agreement.
**Further details as to how Stockholders receive the Acquisition
Price is set out below.
*** Dates based on current estimates and are subject to
change.
Reasons for the Acquisition
In the course of reaching its decision to approve the Merger
Agreement, to declare that the Merger Agreement and the Acquisition
are fair to, advisable and in the best interests of the
Stockholders and to recommend that the Stockholders vote to approve
the Merger Agreement, our Board consulted with our senior
management. Our Board also received the advice of our financial
adviser, Lincoln International, and consulted with outside legal
counsel regarding its fiduciary duties, the terms of the Merger
Agreement and related legal matters. The following discussion
includes the material reasons and factors considered by our Board
in making its decision and recommendation, but is not, and is not
intended to be, exhaustive.
Factors considered by our Board weighing in favour of the
Acquisition included:
Acquisition Price . Our Board considered the following with
respect to the Acquisition Price to be received by the
Stockholders:
-- that holders of Company Common Stock will be entitled to
receive an Acquisition Price that provides liquidity from an
otherwise thinly traded stock and as compared to the uncertain
future long-term value to Stockholders that might or might not be
realized if we remained independent (or if we were sold in a stock
deal and the Stockholders received stock of the purchaser or the
combined companies as the Acquisition Price);
-- the fact that the per share value of the Acquisition Price
represents a significant premium (54.6%) of the Company's Common
Stock on the OTC Market over the thirty trading day average closing
price of $0.076 ending on 9 November 2021, and (53.8%) of the
Company's Common Stock on AIM over the thirty trading day average
closing price of 0.056 pence ending on 9 November 2021 (with such
calculations done as of the date of the Board's approval of the
Merger Agreement) ;
-- an assessment of the Company's business, assets, prospects,
competitive position, historical and projected financial
performance, short- and long-term capital needs and the nature of
the industry in which the Company competes;
-- the fact that the Board carefully evaluated, with the
assistance of its legal advisers, its financial adviser Lincoln
International LLP, and members of management, the risks and
potential benefits associated with other strategic or financial
alternatives and the potential for shareholder value creation
associated with those alternatives, including wind-up costs
associated with the dissolution of the Company, and the Board's
belief that, in light of this rigorous evaluation process,
Exaktera's offer is the best offer available;
-- the fact that the Board and its advisors vigorously
negotiated the terms of the Acquisition with Exaktera and the
Board's belief that such negotiations have allowed it to obtain
Exaktera's best offer; and
-- the then-current financial market conditions and the recent
and historical market prices of our Company Common Stock, including
the market price performance of our Company Common Stock relative
to that of other industry participants.
Prospects in Remaining Independent . Our Board considered the
possibility of continuing to operate the Company as an independent
public company, including the perceived risks and uncertainties of
remaining an independent public company. In considering the
alternative of pursuing growth as an independent company, our Board
considered the following factors:
-- the fact that the Company would likely have difficulty
raising additional financing (or raising additional financing on
reasonable terms) and would thus have limited growth opportunities
and limited resources to operate the business and invest in its
infrastructure, and that any equity capital raised would likely be
at a price below the Acquisition Price, thus likely substantially
diluting the current equity; and
-- the fact that the market for the Company's Shares has been
highly illiquid and that, accordingly, it would be difficult for
holders of the Shares seeking to liquidate their Shares to do so
effectively, if at all.
Financial Forecasts . Our Board considered the financial
forecasts provided by our management.
Company Conditions. Our Board considered the following factors
with respect to the Company's ongoing business:
-- the uncertainty related to the spread of the COVID-19
pandemic and the current and future potential consequences of such
pandemic on the financial markets and the Company's current and
future business operations, which have included or may include
decreases and delays in supplier and vendor interactions and
deliveries, disruptions in the operations of third-party
manufacturers, suppliers and other third parties on whom the
Company relies, the availability or cost of materials, which could
damage the Company's supply chain or otherwise limit its ability to
obtain sufficient materials to manufacture its products;
-- the uncertainties related to Brexit and the economy generally; and
-- although the Company experienced an improvement in its
operations and financial condition in 2021, the Board's ultimately
determination that the costs and burdens associated with remaining
regulatorily compliant as a small publicly traded company were such
that considering an acquisition was in the best interests of the
Stockholders.
Terms of the Merger Agreement . Our Board considered the terms
and conditions of the Merger Agreement and the course of
negotiations thereof, including:
-- the conditions to Exaktera's obligations to complete the
Acquisition, including the ability of Exaktera to terminate the
Merger Agreement under certain specified circumstances;
-- the structure of the transaction as a merger, and the fact
that the Merger Agreement requires approval by our Stockholders ,
which together would provide a period of time during which a
Superior Proposal could be made ;
-- our ability, under certain circumstances, to furnish
information to and conduct negotiations with third parties, if our
Board determines in good faith that any such third party has made
an Acquisition Proposal that is, or would reasonably be expected to
lead to, a Superior Proposal;
-- the ability of our Board, in connection with an Acquisition Proposal and under certain other circumstances, to change its recommendation that our Stockholders approve the Merger Agreement, if our Board determines in good faith, after consultation with its outside counsel and financial advisers, that (A) an Acquisition Proposal either constitutes a Superior Proposal or would reasonably be expected to result in a Superior Proposal, or (B) the failure to do so would be reasonably likely to cause the Board to be in breach of its fiduciary duties to our Stockholders;
-- Stockholders who do not wish to accept the Acquisition Price
and do not vote for the Merger Resolution will be entitled to
demand appraisal of their shares of Company Common Stock under
Delaware law; and
-- that the Acquisition would only proceed if the resolution to
adopt the Merger Agreement are adopted by a majority (greater than
50%) of the issued and outstanding shares of Company Common Stock
entitled to vote thereon at the Special Meeting.
Risks of Announcement and Closing
Our Board considered:
-- the risks and contingencies related to the announcement and pendency of the Acquisition;
-- the conditions to Exaktera's obligation to complete the
Acquisition and the right of Exaktera to terminate the Merger
Agreement under certain specified circumstances;
-- the risks of a delay in receiving, or a failure to receive,
the necessary approvals and clearances necessary to complete the
Acquisition;
-- the potential risks of the Acquisition on the Company's
relationships with its employees, vendors and partners and others
that do business or may do business in the future with the Company,
including management and certain other employees who will have
expended considerable time and effort to consummate the
Acquisition;
-- the fact that the gain realized by the Company's Stockholders
as a result of the Merger generally may be taxable to the
Stockholders;
-- advice from Lincoln International, its financial advisor ; and
-- the risks and costs to the Company if the Acquisition is not
completed, including the diversion of management and the potential
impact on our stock price.
Cash Transaction
Our Board considered that the Acquisition Price is all cash and,
as a result, our Stockholders will forego any potential future
increase in our value that might result from our possible growth,
and that income realized as a result of the Acquisition will
generally be taxable to our Stockholders.
No Financing Condition
Our Board considered that Exaktera's obligation to complete the
Acquisition is not subject to a condition that it be able to obtain
financing.
Interests of Directors and Officers
Our Board considered the interests that certain of our Directors
and executive officers may have with respect to the Acquisition
(including the compensation payable to our chief executive officer
in connection with the Acquisition) in addition to their interests
as Stockholders and option holders.
Company management and employees
Following the Acquisition, substantially all of the officers of
the Company, including the CEO, are expected to continue their
employment with the Company.
Related Party Transactions
As set out above, at a meeting held on 10 November 2021, the
Governance, Nominations and Remuneration Committee of the Board of
Directors approved a performance/success bonus of $300,000 payable
to Tim Losik upon closing of the acquisition transaction (so long
as he is employed by the Company as of the date of payment). There
is no additional compensation being paid to Board members in
connection with the transaction.
Current Trading
Recent trading has been in line with market expectations and
there has been no recent significant change in the financial
position of the Company.
Proxy Statement
ProPhotonix plans to send to its Stockholders a Proxy Statement
in connection with the Acquisition and the Merger Agreement. The
Proxy Statement will contain important information about the
proposed merger and related matters. STOCKHOLDERS ARE URGED TO READ
THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE AND
PROMPTLY RESPOND AS PROVIDED IN SUCH DOCUMENT. Such Proxy Statement
will be mailed to all record holders of Company Common Stock as of
the Record Date, and we expect that additional copies will be made
available to nominee holders to share with their underlying
beneficial holders. Stockholders will also be able to obtain free
copies of the Proxy Statement (when it is available) and other
documents notified by ProPhotonix in accordance with the AIM Rules
for Companies through the website maintained by ProPhotonix at
https://www.prophotonix.com/. In addition, Stockholders will be
able to obtain copies of the Proxy Statement and the Merger
Agreement from ProPhotonix by contacting the Company's Secretary:
Thomas B Rosedale.
Process for Stockholders to Receive Acquisition
Consideration
Subject to the Acquisition becoming effective, the settlement of
the Acquisition Price will generally be effected by the despatch of
cheques or by the crediting of CREST accounts, as applicable, in
the following manner:
-- in the case of Depository Interests held in CREST, the cash
consideration to which the Depository Interest holder is entitled
to be paid by means of CREST by Exaktera procuring the creation of
an assured payment obligation in favour of such Depository Interest
holder; and
-- in the case of Company Common Stock held outside of CREST,
the cash consideration to which a Stockholder is entitled will be
made in U.S. Dollars.
All such payments will be made net of any withholding tax
required to be deducted by the Paying Agent and will be remitted by
the Paying Agent on behalf of Exaktera.
In the case of Company Common Stock held by U.S. Stockholders in
certificated or book entry form, Stockholders may be required to
provide a letter of instruction with respect to where and through
which method Acquisition Consideration should be delivered.
Acquisition Consideration will be distributed to validated
Stockholders as of the date of Closing within five business days of
Closing. Stockholders requiring validation, Stockholders who are
not holding Company Common Stock through a brokerage account and/or
those Stockholders holding Company Common Stock without valid
addresses of record shall receive the Acquisition Consideration
upon submission of appropriate information supplied by the Paying
Agent.
It should be noted that all documents and remittances sent
through the post will be sent at the risk of the person(s) entitled
thereto and none of the Company, Exaktera or any of their
respective subsidiaries nor their nominees shall be responsible for
any loss or delay in the transmission or delivery of documents
and/or remittances sent in accordance with the above
provisions.
Payments made by cheque shall be payable to the Stockholder
concerned. Cheques will be despatched to the address appearing on
the register of members of the Company (or, in the case of joint
holders, to the address of the joint holder whose name stands first
in the register in respect of such holdings). The encashment of any
such cheque as is referred to in this paragraph shall be a complete
discharge for the monies represented thereby.
For the avoidance of doubt, stockholders who hold their stock
through CREST do not need to take any further action if the Merger
completes as their CREST accounts will be credited automatically
within five Business Days of Closing.
Disclaimers
WH Ireland Limited, which is authorised and regulated in the UK
by the Financial Conduct Authority is acting exclusively for
ProPhotonix and no one else in connection with the matters set out
in this announcement. In connection with such matters, WH Ireland
Limited will not regard any other person as their client, nor will
they be responsible to any other person for providing the
protections afforded to clients of WH Ireland Limited or for
providing advice in relation any matter referred to herein.
This announcement is for information purposes only and is not
intended to, and does not constitute, or form part of any offer,
invitation, inducement or the solicitation of an offer to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of or
exercise rights in respect of any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise. Any vote, decision in respect of, or
other response to, the Acquisition should be made only on the basis
of the information contained in the Proxy Statement. Each
Stockholder is urged to consult its independent professional
advisers immediately regarding the tax consequences of the
Acquisition applicable to them.
In accordance with normal practice in the United Kingdom,
Exaktera or its nominees, or its brokers (acting as agents), may
from time to time make certain purchases of, or arrangements to
purchase, Company Common Stock, other than pursuant to the
Acquisition, until the date on which the Acquisition becomes
effective, lapses or is otherwise withdrawn. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the United Kingdom, will
be reported to a Regulatory Information Service and will be
available on the London Stock Exchange website at
www.londonstockexchange.com.
Stockholders Outside of the United Kingdom
The implications of the Acquisition for Stockholders Outside of
the United Kingdom may be affected by the laws of the relevant
jurisdictions. Such Stockholders should inform themselves about and
observe any applicable legal requirements. It is the responsibility
of each such Stockholder to satisfy himself as to the full
observance of the laws of the relevant jurisdiction in connection
therewith, including the obtaining of any governmental, exchange
control or other consents which may be required, or the compliance
with other necessary formalities which are required to be observed
and the payment of any issue, transfer or other taxes due in such
jurisdiction.
Any person (including without limitation, nominees, trustees and
custodians) who would, or otherwise intends to, forward this
announcement, the Proxy Statement or any accompanying document to
any jurisdiction outside the United Kingdom should refrain from
doing so and seek appropriate professional advice before taking any
action.
If any such Stockholder remains in any doubt, it should consult
an appropriate independent professional adviser in its relevant
jurisdiction without delay. In particular, the ability of persons
who are not resident in the United Kingdom to vote their Company
Common Stocks at the Stockholders Meeting or to execute and deliver
a Form of Proxy appointing another to vote their Company Common
Stocks in respect of the Stockholders Meeting on their behalf, may
be affected by the laws of the relevant jurisdiction in which they
are located.
Failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
Such Stockholders should consult their own legal and tax advisers
with regard to the legal and tax consequences of the Acquisition on
their particular circumstances.
Forward Looking Statements
This announcement contains statements that are or may be
forward-looking statements. All statements other than statements of
historical facts included in this announcement may be
forward-looking statements, including statements that relate to
Company, Exaktera and/or their respective subsidiaries' future
prospects, developments and strategies prior to and after the
consummation of the Acquisition.
Forward-looking statements may be identified by their use of
terms and phrases such as "believe", "targets", "expects", "aim",
"anticipate", "projects", "would", "could", "envisage", "estimate",
"intend", "may", "plan", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. Forward-looking statements may include statements
relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the
expansion and growth of Company's and Exaktera's operations and
potential synergies resulting from the Acquisition; and (iii) the
effects of government regulation on Company's and Exaktera's
business. The forward-looking statements in this announcement are
based on current expectations and are subject to known and unknown
risks and uncertainties that could cause actual results,
performance and achievements to differ materially from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of Company, Exaktera and/or their respective
subsidiaries and the environment in which each will operate in the
future prior to and after the consummation of the Acquisition and
readers are cautioned not to place undue reliance on such
forward-looking statements. All subsequent oral or written
forward-looking statements attributed to Company, Exaktera and/or
their respective subsidiaries or any persons acting on their behalf
are expressly qualified in their entirety by the cautionary
statement above.
Each forward-looking statement speaks only as at the date of
this announcement. Except as required by applicable law or
regulatory requirement (including the AIM Rules), neither Company
nor any other party intends to update or revise these
forward-looking statements, whether as a result of new information,
future events or otherwise.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements.
No Revenue or Profit Forecasts or Estimates
No statement in this announcement is intended as a revenue or
profit forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings/loss or
earnings/loss per share for ProPhotonix or Exaktera, as
appropriate, for the current or future financial years would
necessarily match or exceed the historical published earnings/loss
or earnings/loss per share for ProPhotonix or Exaktera, as
appropriate.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Exchange Rates
The Acquisition Price is fixed in USD and the risk of
fluctuations of equivalent currencies at closing will be borne by
Stockholders.
APPIX
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context otherwise requires:
"GBP" or "sterling" Pounds Sterling, the lawful currency
of the United Kingdom and reference
to "pence" and "p" shall be construed
accordingly;
"$" or "USD" US dollars, the lawful currency
of the United States of America
and reference to "cents" shall
be construed accordingly;
"EUR" Euro, the lawful currency of
the European union;
"Acquisition Price" $0.117 in cash per share;
"Acquisition Proposal" any inquiry, proposal, or offer
from, or indication of interest
in making a proposal or offer
by, any Person or group (other
than Exaktera and its Subsidiaries,
including PPL Merger Sub Inc.),
relating to any transaction or
series of related transactions
(other than the transactions
contemplated by the Merger Agreement),
involving any: (a) direct or
indirect acquisition of assets
of the Company or its Subsidiaries
(including any voting equity
interests of Subsidiaries, but
excluding sales of assets in
the ordinary course of business)
equal to 15% or more of the fair
market value of the Company's
and its Subsidiaries' consolidated
assets or to which 15% or more
of the Company's and its Subsidiaries'
net revenues or net income on
a consolidated basis are attributable;
(b) direct or indirect acquisition
of 15% or more of the voting
equity interests of the Company
or any of its Subsidiaries whose
business constitutes 15% or more
of the consolidated net revenues,
net income, or assets of the
Company and its Subsidiaries,
taken as a whole; (c) tender
offer or exchange offer that
if consummated would result in
any Person or group (as defined
in Section 13(d) of the Exchange
Act) beneficially owning (within
the meaning of Section 13(d)
of the Exchange Act) 15% or more
of the voting power of the Company;
(d) merger, consolidation, other
business combination, or similar
transaction involving the Company
or any of its Subsidiaries, pursuant
to which such Person or group
(as defined in Section 13(d)
of the Exchange Act) would own
15% or more of the consolidated
net revenues, net income, or
assets of the Company, and its
Subsidiaries, taken as a whole;
(e) liquidation, dissolution
(or the adoption of a plan of
liquidation or dissolution),
or recapitalization or other
significant corporate reorganization
of the Company or one or more
of its Subsidiaries which, individually
or in the aggregate, generate
or constitute 15% or more of
the consolidated net revenues,
net income, or assets of the
Company and its Subsidiaries,
taken as a whole; or (f) any
combination of the foregoing.
" Acquisition " or " Merger " the recommended acquisition of
the Company by the Exaktera at
the Acquisition Price in cash
through the merger of PPL Merger
Sub Inc. with and into the Company
pursuant to the laws of the State
of Delaware and the terms of
the Merger Agreement, with the
Company being the surviving corporation;
"Affiliate" when used with respect to any
party, shall mean any Person
that directly, or indirectly
through one or more intermediaries,
Controls or is Controlled by,
or is under common Control with,
the Person specified;
"AIM Rules" the AIM Rules for Companies as
published by the London Stock
Exchange from time to time;
"AIM" AIM, the market of that name
operated and regulated by the
London Stock Exchange;
"Alternative Acquisition Agreement" any letter of intent, memorandum
of understanding, agreement in
principle, acquisition agreement,
merger agreement, option agreement,
joint venture agreement, partnership
agreement or other agreement
(other than a confidentiality
agreement referred to in Section
6.2(b) of the Merger Agreement
entered into in compliance with
Section 6.2(b) of the Merger
Agreement) relating to any Acquisition
Proposal;
"Board" or "Company Board" the Board of Directors of the
Company;
"Business Day" any day ending at 11:59 p.m.
(New York time) other than a
Saturday or Sunday or a day on
which banks in the City of New
York or London or the Department
of State of the State of Delaware
is required or authorized by
Law to close;
"Change in Recommendation" if the Board or any committee
thereof: (i) withholds, withdraws,
qualifies or modifies (or publicly
proposes or resolves to withhold,
withdraw, qualify or modify)
the Company Recommendation with
respect to the Merger in a manner
adverse to Exaktera; (ii) approves
or recommends, or publicly declares
advisable or publicly proposes
to enter into, any Alternative
Acquisition Agreement; (iii)
fails to recommend against acceptance
of any tender offer or exchange
offer for the shares of Company
Common Stock within ten (10)
Business Days after commencement
of such offer, (iv) at any time
following receipt of an Acquisition
Proposal, fails to reaffirm its
recommendation of the Merger
Agreement and the Merger as promptly
as practicable (but in any event
within five Business Days) after
receipt of any written request
to do so from Exaktera; (v) makes
any public statement inconsistent
with the Company Recommendation;
or (vi) resolves or agrees to
take any of the foregoing actions;
"Chosen Courts" the United States District Court
for the District of Delaware
and any appellate court from
any thereof;
"Closing Date" unless otherwise mutually agreed
in writing between the Company
and Exaktera, the fifth Business
Day following the day on which
the last to be satisfied or waived
of the Conditions (other than
any Conditions that by their
nature are to be satisfied at
closing) have been satisfied
or waived;
"Code" Internal Revenue Code of 1986,
as amended;
"Company Common Stock" The Company's common stock, par
value $0.001 per share;
"Company Recommendation" the Board unanimously determining
that the Merger is fair to, and
in the best interests of, the
Company and its Stockholders,
approving and declaring advisable
the Merger Agreement and the
Merger and the other transactions
contemplated by the Merger Agreement
and resolving to recommend approval
of the Merger Agreement to the
holders of shares of Company
Common Stock and the delisting
from AIM;
"Company" ProPhotonix Limited, a Delaware
corporation;
"Conditions" the conditions to the Acquisition
set out in the Merger Agreement
and summarised in Part 1 of the
Proxy Statement;
"Contract" any oral or written agreement,
lease, license, contract, note,
mortgage, indenture, arrangement
or other obligation;
"Control" the possession, direct or indirect,
of the power to direct or cause
the direction of the management
and policies of a Person, whether
through the ownership of voting
securities, by contract, or otherwise;
"CREST" a relevant system (as defined
in the Regulations) in respect
of which Euroclear UK & Ireland
Limited is the Operator (as defined
in the Regulations);
"D&O Insurance" means directors' and officers'
liability insurance and fiduciary
liability insurance;
"Delisting" the cancellation of the admission
of the Company Common Stock to
trading on AIM;
"Delisting Approval" the affirmative vote in favour
of the Delisting Resolution by
at least 75% of the votes cast
at the meeting;
"Delisting Resolution" the resolution to be proposed
at the Special Meeting to approve
the Delisting;
"Depository" Computershare Investor Services
PLC
"Common Stock" or "DI" interests which represent Company
Common Stock (which are held
by Computershare Investor Services
PLC in exchange for the issue
of a dematerialised depository
interest representing Company
Common Stock and which are held
on trust for the holders of such
interests) and are tradable through
CREST;
"DGCL" General Corporation Law of the
State of Delaware;
"DI holders" holders of Company Common Stock;
"Director" or "Company Director" a director of the Company;
"Effective Date" the date on which the Acquisition
becomes effective in accordance
with its terms;
"Effective Time" the time when the Certificate
of Merger has been duly filed
with the Secretary of State of
the State of Delaware or at such
later time as may be agreed by
the parties in writing and specified
in the Certificate of Merger;
"Excluded Shares" (i) shares of Company Common
Stock owned by Exaktera, PPL
Merger Sub Inc. or any other
direct or indirect wholly owned
Subsidiary of Exaktera, (ii)
shares owned by the Company or
any direct or indirect wholly
owned Subsidiary of the Company,
in each case not held in behalf
of third parties, and (iii) shares
owned by Stockholders who have
properly demanded and not withdrawn
a demand for, and not lost their
right to, an appraisal pursuant
to Section 262 of the DGCL;
"FCA" or "Financial Conduct Authority" the UK Financial Conduct Authority;
"Form of Declarations" the form of declarations relating
the ultimate beneficial ownership
of Company Common Stock, a copy
of which is available on the
Company's website at https://www.prophotonix.com/;
"Form of Direction" the form of direction for use
at the Special Meeting, which
accompanies the Proxy Statement;
"Form of Proxy" the form of proxy for use at
the Special Meetings, which accompanies
the Proxy Statement;
"FSMA" or "Financial Services the Financial Services and Markets
and Markets Act" Act 2000 (as amended);
"Governmental Consents" all authorizations, consents,
orders or approvals of, or declarations,
notices or filings with, or expirations
of waiting periods imposed by,
any Governmental Entity in connection
with the Merger and the consummation
of the other transactions contemplated
by the Merger Agreement by the
Company, Exaktera and PPL Merger
Sub Inc. (except for a Certificate
of Merger);
"Governmental Entity" any domestic, foreign or transnational
governmental, quasi-governmental,
regulatory or self-regulatory
authority, agency, commission,
body, department or instrumentality
or any court, tribunal or arbitrator
or other entity or subdivision
thereof or other legislative,
executive or judicial entity
of any nature and any corporate
entity, instrumentality or subdivision
of any government, military or
international organization, including
any state-owned or affiliated
company or hospital and any non-governmental
body that has been authorized
by Law to act for a governmental
body;
"IRS" the US Internal Revenue Services;
"Nutter" Nutter, McClennen & Fish, LLP,
legal advisers to the Company;
"Law" means any federal, state, local,
foreign, international or transnational
law, statute, ordinance, common
law, rule, regulation, standard,
judgment, determination, order,
writ, injunction, decree, arbitration
award, treaty, agency requirement,
authorization, license or permit
of any Governmental Entity;
"London Stock Exchange" London Stock Exchange Group plc,
a public limited company incorporated
in England and Wales;
"Material Adverse Effect" any change, event, occurrence
or effect that, individually
or taken together with any other
changes, events, occurrences
or effects is, or would reasonably
be expected to be, materially
adverse to (A) the financial
condition, properties, assets,
liabilities, business, or results
of operations of the Company
and its Subsidiaries, taken as
a whole or (B) the ability of
the Company to timely perform
its obligations hereunder or
consummate the transactions contemplated
hereby on a timely basis; provided,
however, that none of the following
shall be deemed to constitute
a Material Adverse Effect: (A)
changes in the economy, credit,
capital, securities or financial
markets in the United States
or in any jurisdiction in which
the Company or any of its Subsidiaries
operates (including Brexit and
any governmental response thereto);
(B) changes that are the result
of factors generally affecting
the LED systems, laser modules
or laser diode industries, including
disruption in the global supply
chain; (C) changes in United
States generally accepted accounting
principles ("GAAP") or in any
Law unrelated to the Merger and
of general applicability after
the date of the Merger Agreement;
(D) any failure by the Company
to meet any internal or public
projections or forecasts or estimates
of revenues or earnings for any
period ending prior to the Closing;
provided that the exception in
this clause (D) shall not prevent
or otherwise affect a determination
that any change, event, occurrence
or effect underlying such failure
(if not otherwise excluded under
this definition) has resulted
in, or contributed to, a Material
Adverse Effect; (E) any change,
event, occurrence or effect resulting
from acts of war (whether or
not declared), civil disobedience
or insurrection, hostilities,
sabotage, terrorism, military
actions or the escalation of
any of the foregoing, any hurricane,
flood, tornado, earthquake or
other weather or natural disaster,
any outbreak of illness or other
public health event (including
the COVID-19 pandemic and any
governmental or public health
response thereto) or any other
force majeure event, whether
or not caused by any Person,
or any national or international
calamity or crisis; (F) a decline
in the market price, or change
in trading volume, of the shares
of Company Common Stock on AIM;
provided that the exception in
this clause (F) shall not prevent
or otherwise affect a determination
that any change, event, occurrence
or effect underlying such decline
(if not otherwise excluded under
this definition) has resulted
in, or contributed to, a Material
Adverse Effect; and (G) (i) the
negotiation, execution, announcement,
pendency or performance of the
Merger Agreement or the consummation
or pendency of the Transactions
(other than for purposes of any
representation or warranty contained
in Section 4.4 of the Merger
Agreement) or (ii) any action
taken by the Company or its Subsidiaries
that is required by the Merger
Agreement or with Exaktera's
written consent or at Exaktera's
written request, or the failure
to take any action by the Company
or its Subsidiaries if that action
is prohibited by the Merger Agreement
to the extent Exaktera fails
to give its consent thereto after
a written request therefor pursuant
to Section 6.1 of the Merger
Agreement; provided, further
that, any change, event, occurrence
or effect referred to in clauses
(A), (B), (C) and (E) immediately
above shall be taken into account
in determining whether a Material
Adverse Effect has occurred or
would reasonably be expected
to occur if it (1) primarily
relates to (or has the effect
of primarily relating to) the
Company and its Subsidiaries
or (2) disproportionately adversely
affects the Company and its Subsidiaries
compared to other participants
in the industries in which the
Company or its Subsidiaries conduct
their business (in which case,
only the incremental disproportionate
adverse effect may be taken into
account in determining whether
a Material Adverse Effect has
occurred);
"Merger Agreement" the Agreement and Plan of Merger,
dated 10 November 2021, by and
among the Company, Exaktera,
and PPL Merger Sub Inc., as described
in Part 1;
"Merger Approval" the affirmative vote in favour
of the Merger Resolution of a
majority (greater than 50%) of
the issued and outstanding shares
of Company Common Stock entitled
to vote thereon at the Special
Meeting;
"Merger Resolution" the resolution to be proposed
at the Special Meeting to approve
the Acquisition and the Merger
Agreement;
"NDA" any Non-Disclosure Agreement;
"Non-US Holder" any beneficial owner of Company
Common Stock that is not a US
Holder;
"Notice of Special Meeting" the Notice of Special Meeting
set out at the end of the Proxy
Statement;
"Official List" the Official List is the definitive
record of whether a company's
securities are officially listed
in the UK;
"Order" any Law (whether temporary, preliminary
or permanent) that is in effect
and restrains, enjoins or otherwise
prohibits consummation of the
Merger or the other transactions
contemplated by the Merger Agreement;
"Outside Date" 5:00 p.m., New York time on 11
February 2022;
"Overseas Stockholders" Stockholders (or nominees, custodians
or trustees of Stockholders)
who are resident in, or nationals
or citizens of jurisdictions
outside of the United States
or who are citizens or residents
of countries other than the United
States;
"Paying Agent" Computershare Limited;
"Person" or "Persons" any individual, corporation (including
not-for-profit), general or limited
partnership, limited liability
company, joint venture, estate,
trust, association, organization,
Governmental Entity or other
entity of any kind or nature;
"Potential Transaction" any potential transaction with
the Company;
"Prospectus Rules" the prospectus rules of the Financial
Conduct Authority made under
Part VI of FSMA;
"Proxy Statement" the document to be sent to Stockholders
in connection with seeking the
approval of the Merger Agreement,
containing and setting out the
terms of the Acquisition and
the notice convening the Special
Meeting;
"Record Date" close of trading on AIM on 11
November 2021, the time and date
set by the Board as the record
time and date for determining
the Stockholders entitled to
notice of and to vote at the
Special Meeting;
"Regulations" the Uncertificated Securities
Regulations 2001 (SI2001 No.
3755), as amended from time to
time;
"Regulatory Information Service" a service approved by the London
Stock Exchange for the distribution
to the public of announcements
and included on the list maintained
on the London Stock Exchange's
website;
"Resolutions" the Delisting Resolution and
the Merger Resolution;
"Special Meeting" the Special Meeting of the Stockholders
to be held at 11:30 a.m. Eastern
Time (U.S.) on 15 December 2021
at the offices of Nutter, McClennen
& Fish, LLP, 155 Seaport Boulevard,
Boston, Massachusetts, 02210,
United States;
"Stockholder" a holder of shares of Company
Common Stock;
"Stockholder Approval" the Delisting Approval and the
Merger Approval, collectively;
"Subsidiary" means, with respect to any Person,
any other Person of which at
least a majority of the securities
or ownership interests having
by their terms ordinary voting
power to elect a majority of
the board of directors or other
persons performing similar functions
is directly or indirectly owned
or controlled by such Person
and/or by one or more of its
Subsidiaries;
"Superior Proposal" a bona fide written Takeover
Proposal (except that, for purposes
of this definition, each reference
in the definition of "Takeover
Proposal" to "15% or more" shall
be "more than 50%") that the
Company Board determines in good
faith (after consultation with
outside legal counsel and the
Company financial advisor) is
more favorable from a financial
point of view to the holders
of Company Common Stock than
the transactions contemplated
by the Merger Agreement, taking
into account: (a) all financial
considerations; (b) the identity
of the third party making such
Takeover Proposal; (c) the anticipated
timing, conditions (including
any financing condition or the
reliability of any debt or equity
funding commitments) and prospects
for completion of such Takeover
Proposal; (d) the other terms
and conditions of such Takeover
Proposal and the implications
thereof on the Company, including
relevant legal, regulatory, and
other aspects of such Takeover
Proposal deemed relevant by the
Company Board (including any
conditions relating to financing,
stockholder approval, regulatory
approvals, or other events or
circumstances beyond the control
of the party invoking the condition);
and (e) any revisions to the
terms of the Agreement and the
Merger proposed by Exaktera during
the Superior Proposal Notice
Period set forth in Section 6.4(d)
of the Merger Agreement ;
"Surviving Corporation" the Company, as the surviving
corporation in the Merger;
"Takeover Code" the UK City Code on Takeovers
and Mergers;
"Tax" all federal, state, local and
foreign income, windfall or other
profits, franchise, net income,
gross receipts, environmental,
customs duty, capital stock,
severances, stamp, transfer,
payroll, sales, employment, unemployment,
disability, use, property, withholding,
excise (including medical device
excise taxes), production, value
added, escheat, unclaimed property,
occupancy and other taxes, duties
or assessments in the nature
of a tax, together with all interest,
penalties and additions imposed
with respect to such amounts
and any interest in respect of
such penalties and additions
;
"United Kingdom" or "UK" the United Kingdom of Great Britain
and Northern Ireland;
the United States of America,
"United States" or "US" its territories and possessions,
any state of the United States
of America and the District of
Columbia and all other areas
subject to its jurisdiction;
"US Holder" a beneficial owner of Company
Common Stock that is for US federal
income tax purposes: (a) an individual
citizen or resident of the United
States, (b) a corporation or
entity treated as a corporation
for US federal income tax purposes,
in each case organized in or
under the laws of the United
States, any state thereof or
the District of Columbia, (c)
an estate the income of which
is subject to US federal income
taxation regardless of its source,
or (d) a trust if a court within
the United States can exercise
primary supervision of the trust's
administration and one or more
United States persons have the
authority to control all substantial
decisions of the trust or if
the trust has validly elected
under US Treasury regulations
to be treated as a United States
person;
"WH Ireland Limited" WH Ireland Limited, the nominated
adviser and broker to the Company
for the purposes of the AIM Rules.
References to an enactment include references to that enactment
as amended, replaced, consolidated or re-enacted by or under any
other enactment before or after the date of this announcement
All the times referred to in the Proxy Statement are Eastern
Times of the United States unless otherwise stated.
References to the singular include the plural and vice
versa.
5361657.3
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END
ACQGZMMMKMDGMZG
(END) Dow Jones Newswires
November 11, 2021 02:00 ET (07:00 GMT)
Prophotonix (LSE:PPIX)
過去 株価チャート
から 11 2024 まで 12 2024
Prophotonix (LSE:PPIX)
過去 株価チャート
から 12 2023 まで 12 2024
