| Item 1.01 | Entry into a Material Definitive Agreement. |
On August 1, 2024 (the “Closing Date”), American Superconductor Corporation, a Delaware corporation (the “Company”), entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with each of the sellers listed on the signature pages thereto (each, a “Selling Stockholder” and collectively, the “Selling Stockholders”), Megatran Industries, Inc, a New Jersey corporation (“Megatran”) and James David Seitz, an individual, solely in his capacity as the stockholder representative thereunder (the “Stockholder Representative”).
Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, the Company purchased all of the issued and outstanding shares of Megatran (collectively, the “Acquired Interests”) for aggregate consideration in an amount equal to $61,350,000 (the “Purchase Price”), which consideration amount shall be subject to various adjustments set forth in the Stock Purchase Agreement (including those described below) and consists of: (a) (i) $25,000,000, minus (ii) the Indebtedness (as defined in the Stock Purchase Agreement) outstanding as of immediately prior to the closing, minus (iii) Company Expenses (as defined in the Stock Purchase Agreement) (collectively, the “Cash Purchase Price”); (b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) (the “Company Shares”) of the Company’s common stock, $.01 par value per share (“Common Stock”) equal to the quotient obtained by dividing (x) $31,350,000 (the “Share Purchase Price”) by (y) the closing price per share of Common Stock on the Nasdaq Global Select Market on the last trading day immediately preceding the Closing Date; and (c) an additional cash payment equal to $5,000,000, as adjusted pursuant to Sections 5.6(c), (d), and (f) of the Stock Purchase Agreement (the “Additional Cash Purchase Price”).
Under the terms of the Stock Purchase Agreement, the Company is obligated to file either (i) a new registration statement, or (ii) a prospectus supplement to an already effective Company registration statement, covering the resale of the Company Shares by the Selling Stockholders no later than ten (10) business days following the Closing Date, and in the case of a new registration statement, to use commercially reasonable efforts to cause such registration statement to be declared effective by the Securities and Exchange Commission (“SEC”) as soon as practicable thereafter.
In the event that a new registration statement has not been declared effective by the SEC, or a prospectus supplement to an already effective Company registration statement has not been filed, as the case may be, within sixty (60) days following the Closing Date, the Company is obligated to pay, no later than the date that is ten days after such sixty day period, an amount in cash equal to the Share Purchase Price and the Selling Stockholders shall furnish to the Company all documentation as reasonably requested by the Company for the cancellation of the Company Shares.
In the event that a new registration statement has been declared effective by the SEC, or a prospectus supplement to an already effective Company registration statement has been filed, as the case may be, within sixty (60) days following the Closing Date, the Company shall deliver written notice thereof (the “Effectiveness Notice”) to the Stockholder Representative within three (3) business days after the date on which the SEC posts the notice of effectiveness of the Registration Statement on EDGAR, or the Company files a prospectus supplement to an already effective Company registration statement, as the case may be. The Selling Stockholders will then have the option, within five (5) business days of the Stockholder Representative receiving the Effectiveness Notice, to deliver a notice of orderly distribution to the Company (an “Orderly Distribution Notice”), in which case the Selling Stockholders shall use commercially reasonable efforts to sell all of the registered Company Shares within sixty (60) days after the date of the Orderly Distribution Notice.
In the event that (i) the Stockholder Representative does not deliver an Orderly Distribution Notice, (ii) the Company does not file either (a) a new registration statement, or (b) a prospectus supplement to an already effective Company registration statement, covering the resale of the Company Shares by the Selling Stockholders on or before ten (10) business days following the Closing Date, or (iii) a new registration statement has not been declared effective by the SEC, or a prospectus supplement to an already effective Company registration statement has not been filed, as the case may be, within sixty (60) days following the Closing Date, then within ten (10) days thereafter, the Company shall pay to Selling Stockholders an aggregate amount in cash equal to $5,000,000 by wire transfer of immediately available funds into accounts designated by the Stockholder Representative in writing.
The Stock Purchase Agreement also contains customary representations, warranties, covenants and indemnities.
