Peraso Technologies Inc. entered into letter of intent to acquire MoSys, Inc. in a reverse merger transaction for $75.8 million.
September 14, 2021
Share
Peraso Technologies Inc. entered into letter of intent to acquire MoSys, Inc. (NasdaqCM:MOSY) in a reverse merger transaction for $75.8 million on March 8, 2021. Peraso Technologies Inc. signed a definitive agreement to acquire MoSys, Inc. in a reverse merger transaction on September 14, 2021. On a fully-diluted basis, the stockholders of Peraso will receive consideration of approximately 14.2 million shares of MoSys common stock or Exchangeable Shares on Closing, with approximately 1.8 million of such shares (the "Escrowed Shares") to be deposited into escrow pursuant to the terms of an escrow agreement (the "Escrow Agreement"), such Escrowed Shares to be released to the stockholders of Peraso if, between 12 months and 36 months of the Closing, the common stock of the combined company achieves a VWAP (volume-weighted average price) of at least $8.57 per share for any 20 trading days within a period of 30 consecutive trading dates subject to earlier release upon a corporate sale or reorganization (the "Escrow Release Conditions"). Prior to Closing, all debt of Peraso is to be converted into common stock or repaid in full, or will be reflected in an adjustment to the share exchange ratio. Upon the closing of the Business Combination, the stockholders of Peraso are expected to hold, on a fully-diluted basis, a 61% equity interest in the combined company, with the remaining 39% equity interest to be retained by the stockholders of MoSys, assuming the Escrow Release Conditions are satisfied, or a 57.7% equity interest by the stockholders of Peraso and a 42.3% equity interest by the stockholders of MoSys, assuming the Escrow Release Conditions are not satisfied, in each case, as described further below. On Closing, MoSys will change its name to Peraso Inc. and expects shares of its common stock to continue to trade on the Nasdaq Capital Market under the new ticker symbol PRSO. The Agreement subjects the parties to certain termination payment obligations. Peraso shall pay to RTO Acquiror a Termination fee of $750,000 and RTO Acquiror shall pay to Peraso a termination fee of $750,000. If the Agreement is terminated by either party as a result of obtaining a superior proposal from a third party, breach of non-solicitation covenants of the Agreement, or because either party's board of directors fails to unanimously recommend to proceed with the Arrangement or withdraws its recommendation, the breaching party will be required to pay a termination fee of $3,500,000.
At the Effective Time, all members of MoSys's Board of Directors other than Daniel Lewis and Robert Newell will resign and the combined company's Board of Directors (the New Board) will be comprised of five directors, consisting of Ronald Glibbery, Daniel Lewis, Robert Newell, and two Peraso Director nominees that will be considered independent Directors under the Nasdaq Stock Market. Additionally, at the Effective Time, the executive officers of the combined company will consist of Ronald Glibbery as Chief Executive Officer; Daniel Lewis as President; James Sullivan as Chief Financial Officer; Brad Lynch as Chief Operating Officer and Alexander Tomkins as Chief Technology Officer.
The transaction is subject to approval by MoSys' and Peraso's stockholders, the order of the Ontario Superior Court of Justice (Commercial List) granted pursuant to Section 182(5) of the Business Corporations Act (Ontario); all regulatory approvals; the continuing listing of the Common Stock on Nasdaq; letters of resignation and mutual releases from such directors and officers of Peraso and the RTO Acquiror as mutually agreed to between such Parties, including as needed to implement the RTO Acquiror Board Matters; holders of no more than ten percent (10%) of the Peraso Shares shall have exercised, and at the date of the Peraso Meeting, have not withdrawn, Dissent Rights; the Escrow Agreement shall have been duly executed by each of the parties thereto, and Peraso shall have completed the information set out at Schedule B thereof effective as at the Effective Time; the RTO Acquiror Shares to be issued pursuant to this Agreement shall have been approved for listing and other customary closing conditions. The Arrangement Agreement and the Business Combination have been approved by MoSys' and Peraso's Boards of Directors. The shareholders meeting of MoSys shall be held on November 23, 2021. On December 1, 2021, MoSys stockholders approved the proposed business combination. The Business Combination is expected to close in the fourth quarter of 2021.
Cassel Salpeter & Co. served as financial advisor to MoSys, and Blake Baron of Mitchell, Silberberg and Knupp, LLP and Graeme Martindale of Borden Ladner Gervais LLP served as legal counsel to MoSys. Evans and Evans served as financial advisor to Peraso and provided a fairness opinion to the board of directors of Peraso, and Dee Rajpal, Ryan Johnson, Alexander D. Rose, Jonathan W. Willson, John O'Connor, Connie Scott, Christina Catenacci and Stephen Jaggers of Stikeman Elliott LLP served as legal counsel to Peraso. Kingsdale Advisors acted as information agent to MoSys. MoSys estimates the fees for Kingsdale Advisors associated with this proxy solicitation will be approximately $15,000 plus charges for any telephone calls and disbursements. Equiniti Trust Company acted as transfer agent to MoSys. Cassel Salpeter became entitled to aggregate fees $200,000 for its services as financial advisor and for rendering its opinion, no portion of which is contingent upon the completion of the Arrangement.
Peraso Inc. develops high-performance 60 Gigahertz (GHz) unlicensed and 5G millimeter wavelength (mmWave) wireless technology, offering chipsets, antenna modules, software, and intellectual property (IP). The Company supports a variety of applications, including fixed wireless access, immersive video, and factory automation. In addition, its solutions for data and telecom networks focus on accelerating data intelligence and multi-access edge computing, providing end-to-end solutions from the edge to the centralized core and into the cloud. Its mmWave products enable a range of applications, including multi-gigabit point-to-point (PtP), wireless links with a range of up to 25 kilometers and operating in the 60 GHz frequency band; multi-gigabit point-to-multi-point (PtMP), links in the 60 GHz frequency band used to provide fixed wireless access (FWA), services; FWA in the 5G operating bands from 24 GHz to 43 GHz to provide multi-gigabit capability and low latency connections; and others.