SCHMITT INDUSTRIES, INC. (NASDAQ:SMIT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
The information included in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
On July 9, 2020, Ample Hills Acquisition LLC (“Buyer”), a New York limited liability company and wholly owned subsidiary of Schmitt Industries, Inc., (the “Company”), entered into an Asset Purchase Agreement (the “Agreement”), dated as of June 29, 2020, with Ample Hills Holdings, Inc., a Delaware corporation, Ample Hills Creamery, Inc., a New York corporation, and their subsidiaries (collectively, “Ample Hills”). The transactions contemplated by the Agreement (the “Transactions”) closed on July 9, 2020, the day after a sale order approving the Transactions was entered by the Bankruptcy Court (defined below). The Agreement provided that, upon the terms and subject to the conditions set forth therein, Ample Hills sold, transferred and assigned to Buyer, or one or more of its affiliates, the Acquired Assets (as defined in the Agreement) and Buyer, or one or more of its affiliates, assumed the Assumed Liabilities (as defined in the Agreement) for a purchase of $1.0 million. The Acquired Assets include, among other things, Ample Hills’ equipment, inventory, and all intellectual property, including the names and marks of “AMPLE HILLS” and “AMPLE HILLS CREAMERY” and all derivatives thereof. to the Agreement, Buyer also paid an additional approximately $1.0 million to certain landlords of Ample Hills in exchange for the right to assume leases with such landlords. The Transactions were funded by the Company with cash on hand.
The Ample Hills entities are debtors-in-possession under title 11 of the United States Code, 11 U.S.C. § 101 et seq. to voluntary petitions for relief filed under chapter 11 of the Bankruptcy Code on March 15, 2020 in the United States Bankruptcy Court for the Eastern District of New York (the “Bankruptcy Court”). The Transactions were conducted through a Bankruptcy Court-supervised process, subject to Bankruptcy Court-approved bidding procedures, approval of the Transactions by the Bankruptcy Court, and the satisfaction of certain closing conditions.
The Agreement contained certain customary representations and warranties made by each party. Buyer and Ample Hills agreed to various customary covenants, including, among others, covenants regarding the conduct of the Ample Hills businesses prior to the closing of the Transactions and covenants requiring Buyer and Ample Hills to use commercially reasonable efforts to obtain certain third-party and governmental consents, approvals or other authorizations required in connection with the Transactions.
The foregoing description of the Agreement and the Transactions contemplated thereby does not purport to be complete and is subject to and qualified in its entirety by reference to the Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K is incorporated by reference herein.
On July 10, 2020, the Company issued a press release announcing the Agreement and completion of the Transactions. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 8.01.
On July 13, 2020, the Company also issued a press release announcing the Company’s decision not to delist its common stock from trading on the Nasdaq Capital Market or terminate the registration of its common stock under the Securities Exchange Act of 1934 as amended (the “Exchange Act”). The Company’s Board of Directors reconsidered such delisting and deregistration and determined that the Company would continue to maintain the registration and listing of its common stock. The Company believes that maintaining such registration and listing will provide it with valuable access to the public capital markets. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated by reference into this Item 8.01.
| 2.1 | Asset Purchase Agreement, dated June 29, 2020, by and among Ample Hills Acquisition LLC, Ample Hills Holdings, Inc., Ample Hills Creamery, Inc., and the Ample Hills subsidiaries.* |
| 99.1 | Press Release, dated as of July 10, 2020. |
| 99.2 | Press Release, dated as of July 13, 2020. |
* Schedules and similar attachments to the agreement have been omitted to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of all omitted schedules and similar attachments to the SEC upon its request.
SCHMITT INDUSTRIES INC Exhibit
EX-2.1 2 ex21to8k12252001_07152020.htm Exhibit 2.1 ASSET PURCHASE AGREEMENT This ASSET PURCHASE AGREEMENT (“Agreement”) is made as of June 29,…
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About SCHMITT INDUSTRIES, INC. (NASDAQ:SMIT)
Schmitt Industries, Inc. designs, manufactures and sells test and measurement products for two main business segments: the Balancer segment and the Measurement segment. The Company operates through two segments: the design and assembly of dynamic balancing systems and components for the machine tool industry (Balancer), and the design and assembly of laser-based test and measurement systems (Measurement). For the Balancer segment, it designs, manufactures and sells computer-controlled vibration detection, balancing and process control systems for the machine tool industry. Under the Measurement segment, the Company through its subsidiary, Schmitt Measurement Systems, Inc., designs, manufactures and sells laser and white light sensors, laser-based micro roughness measurement products, laser-based surface analysis and measurement products, and ultrasonic measurement products. The Company provides sales and service for Europe and Asia through its subsidiary, Schmitt Europe Limited.
