Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Sorrento Tech, Inc. (1472343) 10-Q published on Nov 13, 2017 at 5:16 pm
Reporting Period: Sep 29, 2017
On October 26, 2017, the Company's stockholders approved the winding up and liquidation of the Company pursuant to the terms of the Plan of Complete Liquidation and Dissolution of the Company subsequent to the completion of the transactions contemplated by the Asset Purchase Agreement, including the Company's obligations during the Transition Period (the "Plan of Liquidation"). Based on the terms of the Plan of Liquidation, the Company's board of directors may abandon the dissolution without further action by the stockholders. In the event the Company proceeds with the Plan of Liquidation, the Company expects to make an initial liquidating distribution, in an amount to be determined, after the completion of the Transition Period as defined in Note 18. The Company expects to make multiple liquidation distributions as it winds down its business.
A putative securities class action originally captioned Ding v. Roka Bioscience, Inc., Case No. 3:14-cv-8020, was filed against the Company and certain of its officers and directors in the United States District Court for the District of New Jersey on December 24, 2014, on behalf of a putative class of persons and entities who had purchased or otherwise acquired securities pursuant or traceable to the Registration Statement for the Company’s IPO. The parties entered into a settlement agreement, which was approved by the court in December 2016, to pay approximately $3.3 million. As of September 30, 2017, all payments have been made in accordance with the settlement agreement and the corresponding receivable and liability are no longer recorded on the Company's Balance Sheet.
On October 26, 2017, the Company held a special shareholder meeting, at which time its stockholders voted to approve the Asset Sale and Plan of Dissolution. The approval of the Asset Sale by the Company's stockholders caused all conditions for the Company to adopt held-for-sale presentation of the assets included in the purchase agreement to be met. Further, the stockholders approved the Plan of Dissolution, however, the Company's board of directors may abandon the dissolution without further action by the stockholders.
Our interest expense has decreased as the balances due on our Comerica loan and under the extended payment terms provided to us by Gen-Probe on the purchase of Atlas instruments have been paid down. We expect our interest expense to continue to decrease based upon the repayment in September 2017 of our term loan and the payment in October 2017 of amounts due under our revolving line of credit. Our interest expense will further be reduced as the two $5.0 million payments due under the Gen-Probe license agreement were eliminated after we made a $2.5 million payment in the third quarter of 2017, under a third amendment entered into in August 2017.
As permitted by the DGCL, our board of directors has the right to abandon our Plan of Liquidation even through our stockholders have authorized our liquidation. While our board of directors does not currently intend to do so, it will do so if it determines, based on intervening circumstances, that it is not in the best interest of our stockholders to continue with our contemplated liquidation and dissolution. If our board of directors decides to abandon our complete liquidation and dissolution, it will also terminate the Plan of Liquidation.
Further, our board of directors has the right to abandon the Plan of Liquidation upon the receipt of an offer from a third party to purchase the corporate entity which remains after the Asset Sale. Upon receipt of an offer to purchase the remaining corporate entity, we would seek shareholder approval prior to consummating any such sale to the extent required by the DGCL.