Odyssey Semiconductor Technologies enters into definitive agreement to sell assets for $9.52 million

Odyssey Semiconductor Technologies, (OTCQB:ODII), a semiconductor device company developing innovative high-voltage power switching components based on proprietary gallium nitride (“GaN”) processing technology, announced that it has entered into a definitive agreement to sell substantially all of its assets to a large semiconductor company for $ 9.52 million in cash. The buyer and seller have agreed that the buyer’s name will be withheld as confidential during the 20-calendar-day “go shop” period.

CEO Commentary

“We are pleased that we have found a strong buyer. We also appreciate that we have been afforded an opportunity to shop this purchase opportunity for 20 calendar days in an effort to ensure as many interested parties as possible can accurately gauge the potential value of our technology and assets at this point in time,” said Rick Brown, Chief Executive Officer.

Transaction Details

The asset sale, which was approved by the Odyssey Board of Directors, is expected to close early in the third quarter of 2024 subject to customary closing conditions, including approval by Odyssey shareholders.

Net of deal related expenses for Lawyers, Investment Banking & other customary transaction expenses currently estimated at $ 1.15M, as well as an approximately $6.5M Promissory Note and Loan settlements to have security interests in the assets released at the time of the exchange as well an estimated $ 582,000 to settle accounts payable and accrued expenses may leave approximately $1.3M that could be shared across 14.5M common shareholders. Additional liabilities or claims could surface or arise in the interim up until the time of close or later which could reduce this potential.

The asset purchase agreement includes a 20-day “go shop” period expiring on April 1, 2024, which permits the Odyssey Board and its advisors, Craig-Hallum Capital, to initiate and solicit alternative acquisition proposals from third parties, as described in the agreement. The Odyssey Board has the right to terminate the agreement to accept a superior proposal, subject to the terms and conditions of the agreement. There can be no assurance that this “go shop” will result in a superior proposal, and Odyssey does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or otherwise required.

A proxy related to the asset sale and related matters will be prepared in accordance with Delaware law and circulated to shareholders of record at the end of April, with a notice period and meeting expected to be held in early June. The transaction is expected to close on or around July 1, but no later than July 10, 2024.

Upon completion of the transaction and subject to shareholder approval, Odyssey’s common stock will most likely cease to be listed on any and all public stock exchanges as soon as is practicable. The Company currently plans to wind down operations and hopes to pay out a liquidating dividend to the extent funds are available at that point. Management of Odyssey currently estimates that the earliest the Company’s affairs could be wound up would be the end of calendar 2024.