Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed in the Current Report on Form 8-K filed by Resonant Inc. (the Company) with the Securities and Exchange Commission (the SEC) on August 6, 2019, the Company entered into a securities purchase agreement, dated July 31, 2019 (the Purchase Agreement), with Murata Electronics North America, Inc. (Murata), an affiliate of Murata Manufacturing Co., Ltd. (MMC), which agreement was subsequently joined by 10 additional institutional and individual accredited investors (collectively with Murata, the Investors), which Purchase Agreement provides for the sale by the Company of an aggregate of 3,960,560 shares of common stock of the Company, par value $0.001 per share (each, a Share and collectively, the Shares) at a price of $2.53 per Share, for gross proceeds of approximately $10.0 million (the Offering).
As disclosed in the Current Report on Form 8-K filed by the Company with the SEC on August 14, 2019, the initial closing of the Offering with all Investors other than Murata, for an aggregate of 1,193,762 Shares and gross proceeds of approximately $3.0 million, occurred on August 9, 2019.
The closing of Muratas investment for approximately $7.0 million was subject to, among other conditions, the execution of a definitive multi-year commercial agreement that provides MMC and its affiliates with rights to multiple designs utilizing the Companys technology.
Effective September 30, 2019, the Company entered into the commercial agreement contemplated by Purchase Agreement, in the form of a collaboration and license agreement, dated September 30, 2019, between the Company and MMC (the Collaboration Agreement), and Murata and the Company consummated the purchase and sale of Shares, with the Company issuing 2,766,798 Shares to Murata for gross proceeds of approximately $7.0 million.
Pursuant to the Collaboration Agreement, the Company and MMC have agreed to collaborate on the development of proprietary circuit designs using the Companys XBAR® technology, and the Company has licensed to MMC rights for products in four specific radio frequencies, or bands. MMC has agreed to pay the Company up to an aggregate of $9.0 million as pre-paid royalties and other fees for the licensed designs and certain other intellectual property of the Company developed in the collaboration, payable in installments over a multi-year development period, with each installment conditional upon the Companys achievement of certain milestones and deliverables acceptable to MMC in its discretion. MMC may terminate the Collaboration Agreement at any time upon thirty (30) days prior written notice to the Company.
MMCs rights to the Companys XBAR® technology are exclusive for a period of 30 months, during which period the Company may not grant to any third party the right to develop, make, have made, use, sell, offer for sale or import any filter or resonator produced through the use of the XBAR® technology for use in mobile communication devices.
The Collaboration Agreement contains customary representations and warranties and indemnification obligations of the Company.
A joint press release announcing the Collaboration Agreement was issued on October 2, 2019, a copy of which is attached hereto as Exhibit 99.1.