Item
1.03
|
Bankruptcy
or Receivership
|
As
previously reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on August 31, 2017, Uni-Pixel,
Inc., a Delaware corporation (the “
Company
”), and its wholly-owned subsidiary, Uni-Pixel Displays, Inc., a
Texas Corporation (“
Displays
”, and, together with the Company, the “
Debtors
”), filed a voluntary
petition for reorganization (the “
Chapter 11 Case
”) under Chapter 11 of the United States Bankruptcy Code (the
“
Bankruptcy Code
”) in the United Stated Bankruptcy Court for the Northern District of California – San
Jose Division (the “
Court
”). Debtors continue to operate their business as “debtor-in-possession”
under the jurisdiction of the Court, under Cases No. 17-52100 and 17-52101, respectively, in accordance with the applicable provisions
of the Bankruptcy Code and order of the Court.
As
previously reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on October 3, 2017 (the
“
October 3 Form 8-K
”), the Debtors on September 29, 2017 entered into a “stalking horse” asset
purchase agreement (the “
Asset Purchase Agreement
”) with Future Tech Capital, LLC, a California limited liability
company (the “
Purchaser
”). On November 8, the Debtors and the Purchaser entered into Amendment No. 1 to the
Asset Purchase Agreement, which made the following material amendments to the previously disclosed Asset Purchase Agreement:
(a)
The assets being sold to the Purchaser carved out all intellectual property and other intangible property pertaining to the Debtors’
Diamond Guard assets, but otherwise provided for the sale of certain of the Debtors machinery, equipment, tangible and intangible
personal property (the “
Assets
”). The Assets as described in the October 3rd Form 8-K otherwise did not change.
(b)
The Debtors agreed to grant the Purchaser an irrevocable, perpetual, non-royalty bearing, fully-paid up, non-exclusive, transferable
and assignable worldwide license to the Diamond Guard intellectual property and intangible property carved out from the Assets
being sold to the Purchaser (the “
License Grant
”). The Purchaser also has the right to sublicense this Diamond
Guard intellectual property and intangible property, with the consent of the Debtors not to be unreasonably withheld, to any person
provided that the sublicense is non-exclusive and the license fees are allocated 75% to the Debtors and 25% to the Purchaser.
(c)
The purchase price for the purchased Assets and the License Grant is $1,500,000. In addition, the Purchaser will exercise the
right to purchase this Diamond Guard intellectual property and intangible property for $1.00 as a result of a restructuring plan
proposed by ESW Capital, LLC (“
ESW
”) as discussed below not proceeding.
On
November 8, 2017, the Court entered an order approving the sale to the Purchaser of the Assets free and clear of all liens, claims,
encumbrances and interests, pursuant to the terms of the Asset Purchase Agreement, as amended by Amendment No. 1. The sale of
the Assets is expected to close on or about November 15, 2017. In addition, the Court’s order also provided that upon receipt
of funds from the Purchaser, the payment to the Debtors’ secured lender, Western Alliance Bank, of the sum of $675,000 in
full and final satisfaction of all amounts owed by the Debtors to Western Alliance Bank. Although the sale of the Assets had not
yet closed, the Purchaser advanced payment of this sum which was then paid to Western Alliance Bank on November 10, 2017.
In
addition, the Court’s November 8, 2017 order also approved a bid proposed by ESW to provide capital for a restructuring
of the Debtors to be effectuated through a Chapter 11 plan of reorganization that would be sponsored by ESW, but on November 13,
2017, ESW informed the Debtors that it would not be proceeding with this bid and proposed restructuring plan. As a result, the
Purchaser has the right to purchase the Diamond Guard intellectual property and intangible property for $1.00 as provided for
in Amendment No. 1 to the Asset Purchase Agreement.
On November 8, 2017, the Court also authorized
the payment of $80,000 from the Purchaser to the Debtors’ lessor, Microchip Technology, Inc. (“
Microchip
”).
In addition, had ESW not withdrawn from proceeding with its proposed restructuring plan, it would have sought entry of an order
from the Court approving a debtor-in-possession financing facility which ESW would have provided. If that had occurred, then the
Court’s November 8, 2017 order would have provided that within three business days of entry of such order that ESW would
fund $160,000 to be immediately paid to Microchip. That payment will now not occur because ESW is not seeking entry of this order.
As a result, that payment will also be made by the Purchaser. Pursuant to the Court’s November 8th order, Microchip has waived
and is forever barred from asserting any administrative rent expense claim against the Debtors and releases the Debtors for pre-petition
environmental contamination relating to the Debtors’ facility in Colorado Springs leased by the Debtors from Microchip.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Current Report on Form 8-K contains forward-looking statements regarding the Company, including with regard to the Asset Purchase
Agreement, its closing and various payments to be made. These forward-looking statements are based on the Company’s current
expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, including those
risks detailed under the caption “Risk Factors” and elsewhere in the Company’s SEC filings and reports. The
Company cautions investors not to place considerable reliance on the forward-looking statements contained in this Current Report
on Form 8-K. The Company undertakes no duty or obligation to update any forward-looking statements contained in this Form 8-K
as a result of new information, future events or changes in its expectations.