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Subsequent Event
12 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Event
Subsequent Event

As part of the effort to streamline operations and move to a variable cost model in our Cable TV Lasers and Transmitters product line, on October 25, 2019, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Hytera Communications (Hong Kong) Company Limited, a limited liability company incorporated in Hong Kong (“Hytera HK”), and Shenzhen Hytera Communications Co., Ltd., a corporation formed under the laws of the P.R.C. (“Shenzhen Hytera”, and together with Hytera HK, the “Buyers”), pursuant to which the Buyers agreed to purchase from us certain CATV module and transmitter manufacturing equipment (the “Equipment”) owned by us and currently located at the manufacturing facility of our wholly-owned subsidiary, EMCORE Optoelectronics (Beijing) Co, Ltd., a corporation formed under the laws of the P.R.C., for an aggregate purchase price of approximately $5.54 million.

The Equipment will be transferred to the Buyers in three separate closings, which are expected to occur during the quarters ending December 31, 2019 and March 31, 2020, with payment for each portion of the equipment to be made following such transfer in an amount equal to (i) 80% of the applicable sale price within three months following the closing of the applicable sale and transfer and (ii) 20% of the applicable sale price within six months following the closing of the applicable sale and transfer. In October 2019, we received the first such payment in an amount equal to approximately $1.9 million. The Buyers will assume all liabilities arising out of or relating to the Buyers’ ownership or operation of the Equipment on or after the applicable closing, other than certain excluded liabilities specified in the Purchase Agreement. The closings of the foregoing transfers are subject to the satisfaction or waiver by us and the Buyers, as applicable, of certain closing conditions. The Purchase Agreement also contains customary representations, warranties and covenants of EMCORE and each of the Buyers.

Concurrently with entry into the Purchase Agreement, we entered into a Contract Manufacturing Agreement (the “Manufacturing Agreement”), dated as of October 25, 2019, with the Buyers pursuant to which the Buyers agreed to manufacture certain CATV module and transmitter products for us from a manufacturing facility located in Thailand for an initial five year term at product prices agreed to between the parties. In the Manufacturing Agreement, we agreed to pay certain shortfall penalties in the event that orders for manufactured products are below certain thresholds, which penalties shall not exceed $660,000 in any of the first of four specified 12 months periods, and which will not exceed approximately $5.54 million in the aggregate following the fifth such 12 month period.