XML 35 R22.htm IDEA: XBRL DOCUMENT v3.22.0.1
SUBSEQUENT EVENTS
 12 Months Ended
Dec. 31, 2021
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS
Merger Agreement
On February 14, 2022, we entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among us and Murata Electronics North America, Inc. ("Murata"), and PJ Cosmos Acquisition Company, Inc. a wholly owned subsidiary of Murata ("Purchaser"). Murata is a wholly-owned subsidiary of Murata Manufacturing Co., Ltd.
Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, on February 28, 2022 Purchaser commenced a cash tender offer (the “Offer”) to purchase all of the outstanding shares of the Company’s common stock, par value $0.001 per share (the “Shares”), at a purchase price of $4.50 per Share, net to the tendering stockholder in cash, without interest and less any required withholding taxes (the “Per Share Amount”). Upon successful completion of the Offer, and subject to the terms and conditions of the Merger Agreement, Purchaser will be merged with and into us (the “Merger”), and we will survive the Merger as a wholly-owned subsidiary of Murata. At the effective time of the Merger (the “Effective Time”), each outstanding Share (other than Shares held by (i) Resonant, Murata or their respective subsidiaries immediately prior to the
Effective Time and (ii) stockholders of Resonant who have properly and validly perfected their statutory appraisal rights under the Delaware General Corporation Law (“DGCL”)) will automatically be converted into the right to receive the Per Share Amount on the terms and subject to the conditions set forth in the Merger Agreement.
The initial expiration date of the Offer is the time that is one minute following 11:59p.p., New York City time, on March 25, 2022, subject to extension in certain circumstances as required or permitted by the Merger Agreement and applicable law. The Offer is subject to the satisfaction of customary conditions, including, among others, that (i) at least that number of Shares validly tendered and not withdrawn (other than Shares tendered by guaranteed delivery where actual delivery has not occurred), when added to any Shares already owned by Murata or any of its controlled subsidiaries, if any, equal a majority of the outstanding Shares as of immediately prior to the time at which Purchaser first accepts for payment the Shares tendered in the Offer, (ii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (iii) the other conditions set forth in Annex A to the Merger Agreement have been satisfied or waived.
The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251(h) of the DGCL, which permits completion of the Merger upon the collective ownership by Murata, Purchaser and any other subsidiary of Murata of one share more than 50% of the number of Shares that are then issued and outstanding, and if the Merger is so effected pursuant to Section 251(h) of the DGCL, no stockholder vote will be required to consummate the Merger.
    The Merger Agreement places limitations on our ability to engage in certain types of transactions without Murata’s consent during the period between the signing of the Merger Agreement and the Effective Time. During this period, we may not raise additional capital through the sale of securities or incur debt. Further, other than in transactions in the ordinary course of business or within specified dollar limits and certain other limited exceptions, we generally may not acquire other businesses, make investments in other persons, or sell, lease, or encumber our assets.
The Merger Agreement contains certain termination rights for Resonant and Murata. Among such rights, and subject to certain limitations, either Resonant or Murata may terminate the Merger Agreement if the Offer is not completed by June 14, 2022, which date may be extended to August 14, 2022 under certain circumstances.
The Merger Agreement contains certain termination rights for each of us and Murata. Among such rights, and subject to certain limitations, either Resonant or Murata may terminate the Merger Agreement if the Offer is not completed by June 14, 2022, which date may be extended to August 14, 2022 under certain circumstances. The Merger Agreement also provides that upon termination of the Merger Agreement under specified circumstances, we may be required to pay Murata a termination fee of $11.2 million or Murata may be required to pay us a termination fee of $15.0 million. In addition, upon termination of the Merger Agreement under specified circumstances, we may be required to reimburse Murata for up to $3.0 million of expenses. Any expenses we reimburses Murata would be offset against and reduce the amount of the termination fee otherwise payable by us to Murata.
Legal Proceedings
Following announcement of the Merger Agreement and commencement of the Offer, the following lawsuits have been filed against the Company and members of the Company’s Board of Directors and certain members of senior management:
United States District Court Stockholder Litigation
On March 1, 2022, Danny Key, a purported stockholder of the Company, filed a complaint against the Company and each member of the Company’s Board of Directors in the United States District Court for the Southern District of New York, captioned Danny Key vs. Resonant, Inc., et al., Case No. 1:22-cv-01708 (the “Key Complaint”). The Key Complaint alleges that the defendants violated Sections 14(e), 14(d), and 20(a) of the Exchange Act by omitting and/or misrepresenting material information in the Solicitation/Recommendation Statement on Schedule 14D-9 of Resonant Inc. filed with the SEC on February 28, 2022 (the “Schedule 14D-9”) (concerning, among other things, the sale process, the Company’s financial projections, and financial valuation analyses provided by the Company’s financial advisors) in connection with the proposed transaction contemplated by the Offer. The Key Complaint seeks, among other things, an order enjoining consummation of the transaction; rescission or rescissory damages in the event the transaction is consummated; an order directing the Board of Directors to disseminate a revised Schedule 14D-9; and an award of plaintiff’s costs, including reasonable allowance for attorneys’ fees and experts’ fees.
Between March 4, 2022 and March 11, 2022, five additional complaints were filed in federal district court in New York and one additional complaint was filed in federal district court in Pennsylvania, in each case by purported stockholders of the Company: (i) Miles Weiss vs. Resonant, Inc., et al., Case No. 1:22-cv-01202-FB-PK (E.D.N.Y.) (the “Weiss Complaint”), (ii) Brian Jones vs. Resonant, Inc., et al., Case No. 1:22-cv-01855 (S.D.N.Y.) (the “Jones Complaint”), (iii) Ken Callen vs.
Resonant, Inc., et al., Case No. 1:22-cv-01903 (S.D.N.Y.) (the “Callen Complaint”), (iv) Thomas Valenti vs. Resonant, Inc., et al., Case No. 1:22-cv-01244 (E.D.N.Y.) (the “Valenti Complaint”), (v) Benny Ruff vs. Resonant, Inc., et al., Case No. 2:22-cv-00861(E.D. Pa.) (the “Ruff Complaint”), and (vi) Jeffrey D. Justice, II vs. Resonant Inc. et al., Case No. 1:22-cv-01353 (E.D.N.Y.) (the “Justice Complaint”). The Weiss Complaint was voluntarily dismissed by the plaintiff on March 11, 2022.
Each of the Jones Complaint, the Valenti Complaint, the Ruff Complaint and the Justice Complaint asserts claims under Sections 14(e), 14(d), and 20(a) of the Exchange Act, and Rule 14d-9 promulgated thereunder, alleging, among other things, that defendants omitted certain material facts related to the transaction from the Schedule 14D-9. The Callen Complaint, which asserts claims under Sections 14(e) and 20(a) of the Exchange Act, alleges, in addition, that the disclosure regarding the Company’s financial projections is false and misleading in view of alleged prior statements by the Company on certain earnings calls. Each of the Jones Complaint, the Valenti Complaint, the Callen Complaint, the Ruff Complaint and the Justice Complaint seeks, among other things, to enjoin the defendants from consummating the transaction, rescissory damages should the transaction not be enjoined, and an award of attorneys’ fees and experts’ fees.
The Company and the Board believe that the allegations in each of the foregoing complaints are without merit and intend to defend their position. However, a negative outcome in any lawsuit could have a material adverse effect on the Company if it results in preliminary or permanent injunctive relief or rescission of the Merger Agreement. In addition, although the Company has directors and officers liability insurance, the Company anticipates that it will incur significant expense within its self-insured retention under that insurance. The Company is not currently able to predict the outcome of any of the lawsuits with any certainty. Additional lawsuits may be filed against the Company, the Board of Directors or management in connection with the Merger Agreement and the Schedule 14D-9.