Akoustis Technologies Enters Chapter 11 Bankruptcy for Strategic Business Sale
Akoustis Technologies aims to resolve legal challenges and ensure operational continuity through its Chapter 11 filing.
Overview of Chapter 11 Filing
Akoustis Technologies, Inc. has voluntarily filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. This strategic decision allows the company to pursue a sale of its business while continuing its operations. The filing comes after a court ruled that Akoustis must pay about $59 million to Qorvo, Inc. due to trade secret and patent infringement. Akoustis seeks to secure a sale of its assets without any claims from Qorvo and to maintain service to its customers throughout the process. The company has signed a purchase agreement with Gordon Brothers for some assets and will conduct a court-approved sale process to attract the best offers. Ensuring a smooth transition for employees and stakeholders is a priority, and motions have been filed to keep employee wages and vendor payments consistent during the proceedings.
Advantages of the Chapter 11 Filing
- Filing for Chapter 11 bankruptcy protection provides Akoustis with a structured opportunity to improve its financial situation and appeal to potential buyers.
- The agreement with Gordon Brothers acts as a safety net by setting a minimum bid that can encourage competitive offers for the business.
- Akoustis’s commitment to maintaining operations while under Chapter 11 includes preserving employee wages and essential vendor payments.
Challenges Facing Akoustis
- The voluntary Chapter 11 filing signifies major financial struggles and operational risks for Akoustis Technologies, which could harm its reputation and stakeholder trust.
- Facing an obligation to pay approximately $59 million in damages for trade secret misuse and patent violations exposes the company to significant legal challenges.
- Conducting a strategic sale during Chapter 11 raises questions about Akoustis’s future stability and its ability to attract viable buyers while keeping key operations intact.
Frequently Asked Questions
What actions is Akoustis taking with its Chapter 11 filing?
Akoustis is focused on a strategic sale of its business while ensuring the continuity of delivering RF filters to its customers.
What prompted the Chapter 11 bankruptcy filing for Akoustis?
The company filed for bankruptcy following a legal judgment demanding approximately $59 million for trade secret misappropriation and patent infringement.
Who is involved in overseeing the asset sale for Akoustis?
Gordon Brothers Commercial & Industrial, LLC is appointed as a stalking horse to assist in the sale of selected company assets.
How does Chapter 11 impact Akoustis’s operations?
While in Chapter 11, Akoustis continues its normal operations, maintaining enough liquidity to manage business activities during the court-managed sale.
What resources are available for Akoustis stakeholders during this process?
Stakeholders can reach out to Stretto, the company’s claims agent, for any inquiries via toll-free calls or emails.
Disclaimer: This summary is generated by AI based on a press release from GlobeNewswire. Full details can be referenced in the original release.
Recent Hedge Fund Activity with $AKTS
Recently, 20 institutional investors adjusted their positions in $AKTS, with 98 reducing their stakes during the last quarter.
- HERALD INVESTMENT MANAGEMENT LTD divested 4,303,636 shares (-100.0%) in Q2 2024.
- CITADEL ADVISORS LLC increased its holdings by 2,061,467 shares (+6063.1%) in Q3 2024.
- OCONNOR, a division of UBS ASSET MANAGEMENT AMERICAS (LLC), removed 2,000,000 shares (-100.0%) in Q3 2024.
- AWM INVESTMENT COMPANY, INC. cut 1,537,008 shares (-100.0%) in Q2 2024.
- 272 CAPITAL LP dropped 745,452 shares (-100.0%) in Q2 2024.
- NORTHERN TRUST CORP reduced its position by 584,851 shares (-70.7%) in Q3 2024.
- BOOTHBAY FUND MANAGEMENT, LLC eliminated 395,784 shares (-100.0%) in Q2 2024.
To stay updated on hedge fund activities, interested parties can visit Quiver Quantitative’s institutional holdings dashboard.
Complete Release Details
Charlotte, NC, Dec. 16, 2024 (GLOBE NEWSWIRE) —
Akoustis to Pursue Strategic Sale of its Business Through Voluntary Chapter 11 Process
Committed to Full Continuity in Delivering Next-Generation BAW High-Band RF Filters to Customers Around the World
Filing to Ensure Business Sold Free and Clear of Qorvo Infringement Following Final Judgment and Required Cleansing Process
Charlotte, NC – DECEMBER 16, 2024 – Akoustis Technologies, Inc. (NASDAQ: AKTS) (“Akoustis” or the “Company”), an integrated device manufacturer (IDM) of patented bulk acoustic wave (BAW) high-band RF filters for mobile and other wireless applications, announced today that it has voluntarily filed for Chapter 11 relief in the United States Bankruptcy Court for the District of Delaware to provide the Company with the flexibility to complete its ongoing marketing and sale process while continuing to deliver for its valued customers around the world. The voluntary Chapter 11 filing follows the Company’s recent legal case with Qorvo, Inc., in which Akoustis was ordered to pay a total judgment of approximately $59 million in damages, fees, and interest related to allegations of trade secret misappropriation and patent infringement.
“In light of the final judgment, we have taken this strategic step to provide flexibility and allow us to continue operations while our sale process continues with momentum. Our priority is to ensure a seamless process for our customers, partners, and employees as we work to find partners who recognize the importance of our products, continued operations, and the central role we play in the RF wireless industry,” said Kamran Cheema, Chief Executive Officer of Akoustis. “We intend to leverage the court-supervised sale process to reaffirm that the business being sold is free and clear of any Qorvo infringement following the court-ordered cleansing process, which we firmly believe is the case.”
To anchor the sale process, Akoustis has entered into a stalking horse asset purchase agreement with Gordon Brothers Commercial & Industrial, LLC for the purchase of certain of the Company’s assets. Prior to the commencement of its Chapter 11 cases, the Company engaged in discussions with interested parties regarding the Company’s continued operations through a potential sale of all or part of the Company’s businesses and assets. In response to such interest, the Company intends to use the court-supervised sale process to seek the highest or otherwise best bid for its assets.
The Company seeks to execute an organized sale process with sufficient time to obtain going concern-qualified bids. Importantly, Akoustis continues to manage its operations efficiently with sufficient liquidity to continue to operate in the ordinary course of business during the court-supervised sale process. To ensure the continued operation of its business without interruption, Akoustis has filed customary “first day” motions in its Chapter 11.
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Akoustis Technologies Moves Forward with Chapter 11 Restructuring
Initiating Cost-Saving Measures and Strengthening Stakeholder Engagement
Akoustis Technologies, Inc. is actively seeking court approval for motions related to its Chapter 11 bankruptcy case. These motions aim to ensure the continuation of employee wages and benefits, as well as payments to essential vendors and standard relief measures.
For more details, visit Akoustis’ case page. Those with inquiries can reach the Company’s claims agent, Stretto, at 855.316.4019 within the U.S. or Canada, or 714.881.5615 from other countries. Email support is available at TeamAkoustis@stretto.com.
Understanding Forward-Looking Statements
This press release includes “forward-looking statements” as defined by Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. These statements are meant to adhere to the “safe harbor” provisions of these sections and include plans for potential asset sales during the Chapter 11 proceedings, the timeline for these actions, and expectations around the continued operation of the company. Terms like “may,” “will,” and “anticipate” often indicate these statements.
Such forward-looking statements involve various risks and uncertainties that could impact actual outcomes. While Akoustis believes it has valid grounds for its projections, it acknowledges that these are based on current knowledge—meaning they can also change. Key risks include potential legal challenges and impacts on liquidity during these restructuring efforts, which are further elaborated in the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2024, and subsequent Quarterly Reports.
Advisors Supporting Akoustis During Restructuring
Legal counsel for Akoustis is provided by K&L Gates LLP, with Raymond James & Associates, Inc. serving as investment banker. Financial advice comes from Getzler Henrich & Associates LLC, while C Street Advisory Group offers strategic communication support.
Overview of Akoustis Technologies, Inc.
Akoustis® (http://www.akoustis.com/) specializes in BAW RF filter solutions, focusing on innovative materials science and MEMS wafer manufacturing. This reflects the company’s commitment to advancing RF filter technology, particularly for mobile and wireless applications. Their proprietary XBAW® manufacturing process stands out for producing bulk acoustic wave RF filters that improve performance across signal processing.
With a 125,000 sq. ft. ISO-9001:2015 registered wafer-manufacturing facility in Canandaigua, NY—equipped with cleanroom capabilities—Akoustis is well placed to meet current market demands. The company’s headquarters is strategically located in the Piedmont technology corridor near Charlotte, North Carolina.
Insights on Gordon Brothers
Founded in 1903, Gordon Brothers focuses on maximizing liquidity through asset valuation, offering services in asset management, lending, and trading. By leveraging its global reach and deep expertise across various industries, including retail and real estate, Gordon Brothers provides clients with strategies to optimize asset values throughout the business cycle. Their headquarters is in Boston, complemented by over 30 offices worldwide.
This article originally appeared on Quiver News. For the complete story, visit their site.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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