11. Subsequent Events

3 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

11. Subsequent Events

Acquisition of Intrinsyc

On October 30, 2019, Lantronix entered into an Arrangement Agreement (the “Agreement”) with Intrinsyc Technologies Corporation (“Intrinsyc”), a leading provider of solutions for the development of embedded and IoT products, pursuant to which all of the outstanding common shares of Intrinsyc (the “Intrinsyc Shares”) will be acquired by Lantronix (the “Transaction”). The transaction, which is subject to approval by the shareholders of Intrinsyc along with other specified closing conditions, is expected to be completed by December 31, 2019 or shortly thereafter.

Under the Agreement, the terms of which were unanimously approved by the boards of directors of Lantronix and Intrinsyc, Lantronix will pay $0.55 and 0.2135 of a share of common stock, par value $0.0001, of Lantronix (the “Lantronix Common Stock”), for each issued and outstanding Intrinsyc Share. Pursuant to the Agreement, Lantronix will, in the aggregate, pay approximately $11,500,000 in cash and issue approximately 4,300,000 shares of Lantronix Common Stock to Intrinsyc shareholders. Following the Transaction, Intrinsyc shareholders are expected to own approximately 16% of the outstanding shares of Lantronix Common Stock. Certain shareholders of Intrinsyc that collectively own approximately 14.5% of the outstanding Intrinsyc Shares have entered into voting agreements to vote in favor of the transaction.

Performance Stock Units

On October 18, 2019 the Company granted 975,000 RSUs with performance-based vesting requirements (“performance stock units” or “PSUs”) to certain executive employees. One third of the PSUs will be eligible to vest in each of the three years beginning in fiscal 2020 if certain earnings per share and revenue targets are met.

Lease Agreement

On October 1, 2019 we entered into a lease agreement for an office in Hyderabad, India. The initial term of the lease is five years, with the option to renew the lease under the terms of a new agreement after the initial term has expired. Initially, monthly rent is $19,000 for the first year, after which time the monthly rent will increase 5 percent per year. We took possession of the property on October 1, 2019.

Debt Agreement

On November 12, 2019, we entered into a Second Amended and Restated Loan and Security Agreement (“Amended Agreement”) with Silicon Valley Bank. Refer to Note 7 above for further information regarding the Amended Agreement.