SCHMITT INDUSTRIES, INC. (NASDAQ:SMIT) Files An 8-K Entry into a Material Definitive Agreement

SCHMITT INDUSTRIES, INC. (NASDAQ:SMIT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

(a) On October 9, 2019, Schmitt Industries, Inc. (“Registrant” or “Schmitt”) entered into a definitive agreement to sell its SBS business line to Tosei Engineering Corp. and Tosei America, Inc., for a purchase price of $10.5 million in cash, subject to customary closing adjustments (the “Purchase Agreement”). The transaction, which was approved by Schmitt’s Board of Directors, is expected to close in the fourth quarter of calendar year 2019 following a 30-day go shop period.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement attached hereto as Exhibit 1.01(a) and incorporated herein by reference.

The Registrant has made customary representations, warranties and covenants in the Purchase Agreement. The closing of the acquisition is subject to customary closing conditions, including the absence of any legal proceeding, law or governmental order that prevents the completion of the transactions contemplated by the Purchase Agreement and the accuracy of the representations and warranties of, and compliance with covenants by, each of the parties to the Purchase Agreement. The closing is not subject to a financing condition.

The Purchase Agreement has been filed with this Current Report on Form 8-K to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Registrant. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such Purchase Agreement, and may be subject to important limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Purchase Agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Registrant’s public disclosures.

Item 7.01 Regulation FD Disclosure.

On October 10, 2019, the Registrant issued a press release announcing its entry into the Purchase Agreement. A copy of the press release is furnished herewith as Exhibit 99.1. The information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed by the Registrant under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

99.1    Press release entitled “Schmitt Industries Reaches Agreement to Sell SBS Business Line for $10.5M.”

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SCHMITT INDUSTRIES INC Exhibit
EX-1.01(A) 2 d818297dex101a.htm EX-1.01(A) EX-1.01(a) Exhibit 1.01(a) EXECUTION COPY ASSET PURCHASE AGREEMENT and STOCK PURCHASE AGREEMENT among SCHMITT INDUSTRIES,…
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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.

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