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Other Business Developments
12 Months Ended
Dec. 31, 2022
Other Business Developments [Abstract]  
OTHER BUSINESS DEVELOPMENTS

NOTE 21 OTHER BUSINESS DEVELOPMENTS

 

Executive Officer and Board of Director Developments

 

On April 21, 2022, the Company’s Chief Financial Officer resigned from the Company for personal family commitments.

 

On May 2, 2022, a member of the Board of Directors of the Company (the “Board”) announced their resignation from the Board and all committees thereof, effective immediately. The resignation allowed that former member of the Board to focus on personal and other professional commitments.

 

On September 1, 2022, the Company’s then Chief Executive Officer and the Company’s then President resigned from the Company as part of the Company’s ongoing transition. David A. Knight was appointed Interim Chief Executive Officer by the Board.

 

On October 10, 2022, a member of the Board announced their resignation from the Board and all committees thereof. The resignation allowed that former member of the Board to focus on personal and other professional commitments.

 

On November 23, 2022, the Board appointed David A. Knight as the Company’s Chief Executive Officer, President, Acting Principal Financial and Accounting Officer, and a Director of the Board. Mr. Knight is entitled to receive (i) an annual base salary of $180,000 which will be increased to $250,000 upon the Board’s Compensation Committee’s determination of adequate funding; (ii) eligibility to participate in a cash bonus program for meeting quarterly and annual goals, milestones, and metrics, as established by the Compensation Committee; (iii) eligibility to receive grants under the terms of the Company’s 2020 Long-Term Incentive Plan; (iv) the right to participate in all benefit plans offered to the Company’s senior executive officers; and (v) severance payments of three months of salary, benefits, and prorated bonus (the “Severance”) if terminated without cause before completion of one year of service, and six months of Severance if terminated without cause after reaching one year of service.

 

Business Developments

 

Commencing in May 2022, the Company embarked on a significant reduction of overhead and personnel costs through the divestment of non-core assets in favor of a refocus on our true core competencies in 5G and beyond technology.

 

In May 2022, InduraPower idled their employees.

 

On May 23, 2022, a third party acquired certain assets and employees from the Canadian subsidiary of DragonWave-X, LLC (“DragonWave Canada”), in return for assuming DragonWave Canada’s potential employment liabilities and assuming DragonWave Canada’s lease in Kanata, Ontario, Canada, through an Asset Purchase Agreement. The Company recognized a $2.0 million loss on the aforementioned sale.

 

On June 21, 2022, the Company completed the sale of its Sovereign Plastics business unit to TheLandersCompanies LLC for total consideration of $2.0 million in a secured note with interest of 5% and a maturity date of May 31, 2025. See Note 3 – Discontinued Operations and Assets and Liabilities Held for Sale for additional information.

 

On June 23, 2022, the Company reached an agreement to return fifteen patents and five pending or provisional patents to the former owners of Innovation Digital, LLC (“Innovation Digital”), resulting in the derecognition of an outstanding promissory note of an aggregate $640,000, comprised of $600,000 of principal and $40,000 of interest, the return of 5,000 shares of common stock, and the waiver of certain severance payments. The Company recognized a $0.6 million loss on the aforementioned sale.

 

In June 2022, the Company idled the employees of SAGUNA Networks Ltd. (“SAGUNA”), Sky Sapience Ltd. (“SKS”) and VEO Photonics, Inc. (“VEO”).

 

On December 21, 2022, the Company entered into a Share Purchase Agreement (the “SKS Sale Agreement”) with Titan Innovations Ltd., an Israeli corporation (“Titan”), pursuant to which we agreed to sell our Israel-based tethered drone unit Sky Sapience Ltd. (“SKS”) to Titan. The total consideration for the sale is $1.8 million. Of that consideration, the first tranche of $400,000 would be held in escrow and utilized to eliminate outstanding liabilities and debt of SKS. The next two tranches totaling $820,000 were paid to the Company, less any remaining SKS outstanding liabilities and debt. The final tranche of $600,000 is due to be paid within two years of closing, subject to potential reductions for further claims of SKS debt, which are capped at $300,000. The SKS Sale Agreement contains closing conditions and control of the company was transferred to the buyer as of March 20, 2023 (see Note 22 – Subsequent Events – Business Developments for more information).

 

On December 29, 2022, the Company entered into a Settlement Agreement (“Settlement Agreement”) to resolve two litigation claims against the Company. As required by the terms of the Settlement Agreement, we entered into a Stock Purchase Agreement (the “RVI Sale Agreement”) with the plaintiffs in the two lawsuits (“Buyers”), pursuant to which, and subject to the terms and conditions of the RVI Sale Agreement, we agreed to sell Rvision, Inc. (“RVI”) to Buyers.

 

See Note 20 – Business Acquisitions for details regarding the Company’s 2021 acquisitions and Note 22 – Subsequent Events for additional information related to debt and equity developments, litigation claims, and other.