Item 1.01 Entry into a Material Definitive Agreement.
On October 12, 2021, EKIMAS Corporation, a Delaware corporation (the "Company")
entered into a Stock Purchase Agreement (the "SPA") between the Company and
Reddington Partners LLC, a California limited liability company ("Reddington")
providing for the purchase from the Company by Reddington of shares of the
Company's common stock in two tranches. Pursuant to the SPA, each of Michael
Adams, Michael Barretti, William J. O'Neill, Jr. and David Volpe (the "Principal
Stockholders") entered into a Voting Agreement with Reddington (the "Voting
Agreements").
The sale of the first tranche of 21,136,250 shares was consummated on October
12, 2021 (the "First Closing"). At the First Closing, the Principal Stockholders
entered into the Voting Agreements with Reddington, covering an aggregate of
4,434,240 shares. As a result of these transactions, Reddington obtained
ownership or voting power over a total of 25,570,490 shares, constituting 51.8%
of the total outstanding shares. Accordingly, Reddington became the majority
stockholder of the Company.
Pursuant to the SPA, the Company will proceed to effectuate a 1-for 50 reverse
stock split (the "Reverse Split"). Within two business days of the Reverse Split
and satisfaction of the other conditions set forth in the SPA, Reddington will
purchase an additional tranche of shares of common stock from the Company such
that after the issuance thereof Reddington shall own 90% of the total issued and
outstanding shares of the Company's common stock. As of the closing of the
second tranche purchase (the "Second Closing"), the Voting Agreements will
terminate.
The purchase price for both tranches of shares is $400,000. At the First
Closing, Reddington paid the Company $200,000, $100,000 of which was required to
be applied to the payment of accrued and unpaid liabilities of the Company as of
the First Closing date, and $100,000 of which is for working capital purposes.
The remaining $200,000 was deposited to an escrow account with an independent
escrow agent (the "Escrow Account"). At the Second Closing, if the $100,000
designated to pay for accrued and unpaid liabilities was not sufficient, funds
from the Escrow Account will be used to pay the remainder of such liabilities.
At the Second Closing, any funds remaining after the payment of the accrued and
unpaid liabilities, if any, and all funds in the Escrow Account, will be
combined and used solely for a special one-time cash distribution (the "Special
Distribution") by the Company, through a paying agent reasonably satisfactory to
Reddington, to only those Company stockholders of record as of October 11, 2021,
net of any costs of associated with making the Special Distribution. Reddington
and its Affiliates expressly waive any right to participate in the Special
Distribution.
Item 3.02 Unregistered Sale of Equity Securities.
The applicable information set forth in Item 1.01 of this Current Report on Form
8-K is incorporated by reference in this Item 3.02. The shares of common stock
sold to Reddington were and will be sold in reliance upon the exemption from
securities registration afforded by Section 4(a)(2) of the Securities Act of
1933, as amended (the "Securities Act"), and Rule 506(b) of Regulation D under
the Securities Act, based in part on the representations of Reddington. There
were no sales commissions paid pursuant to this transaction.
Item 5.01 Changes in Control of Registrant.
The applicable information set forth in Item 1.01 of this Current Report on Form
8-K is incorporated by reference in this Item 5.01. As permitted by Item
5.01(a)(8) of Form 8-K, the information in the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 2021, as amended, is incorporated by
reference in this Item 5.01.
As of the First Closing on October 12, 2021, Reddington obtained ownership or
voting control over a total of 25,570,490 shares, constituting 51.8% of the
total outstanding shares, constituting a change of control.
Reddington's sole owner is Henrik Rouf. The source of the funds used to fund the
purchase was a loan from a private Danish company.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The applicable information set forth in Item 1.01 of this Current Report on Form
8-K is incorporated by reference in this Item 5.02.
In connection with the First Closing, Michael F. Adams resigned as the chief
executive officer and sole director of the Company, and Bennett J. Yankowitz was
appointed as the Company's chief executive officer and sole director.
Bennett J. Yankowitz has more than 30 years of experience as a corporate
attorney with leading law firms, specializing in securities, financial and
merger and acquisition transactions, and has a background in financial analysis
and real estate investment and development. He is of counsel to the law firm
Shumaker Mallory LLP, and was previously of counsel to its predecessor firm
Parker Shumaker Mills LLP. He was previously counsel to Kaye Scholer LLP and a
partner of Heenan Blaikie and of Stroock & Stroock & Lavan LLP. From 2002 to
2014, he was a director of Proteus Energy Corporation, a California-based
private oil and gas production and development company and was its Chief
Executive Officer from 2008 to 2014. He is currently chief financial officer and
a member of the board of directors of RocketFuel Blockchain, Inc. Mr. Yankowitz
earned his B.A. degree in Mathematics from the University of California,
Berkeley (1977), his J.D. degree from the University of Southern California
(1980), where he was an editor of the Southern California Law Review, and his
LL.M. degree (First Class Honours) from the University of Cambridge (1981),
where he was an Evan Lewis-Thomas Scholar at Sidney Sussex College. He is a
member of the California and New York bars.
Mr. Yankowitz does not receive any compensation from the Company. However, he is
Of Counsel to the law firm Shumaker Mallory LLP, which renders legal services to
the Company. The Company has entered into an indemnification agreement with Mr.
Yankowitz as indemnitee, providing for indemnification to the full extent
permitted by the Delaware law if (a) the indemnitee is a party to or threatened
to be made a party to or otherwise involved in any legal proceeding, for any and
all expenses, actually and reasonably incurred by the indemnitee in connection
with the investigation, defense, settlement, or appeal of such proceeding or (b)
if indemnitee is a party to or threatened to be made a party to or otherwise
involved in any legal proceeding by or in the right of us to procure a judgment
in its favor, against any and all expenses actually and reasonably incurred by
the indemnitee in connection with the investigation, defense, settlement, or
appeal of such proceedings.
However, indemnification will not be provided for (i) remuneration paid to the
indemnitee if it is determined by final judgment or other final adjudication
that such remuneration was in violation of law (and, in this respect, both us
and the indemnitee have been advised that the Securities and Exchange Commission
believes that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore, unenforceable and
that claims for indemnification should be submitted to appropriate courts for
adjudication); (ii) a final judgment rendered against the indemnitee for an
accounting, disgorgement or repayment of profits made from the purchase or sale
by indemnitee of our securities against indemnitee or in connection with a
settlement by or on behalf of indemnitee to the extent it is acknowledged by
indemnitee and us that such amount paid in settlement resulted from indemnitee's
conduct from which indemnitee received monetary personal profit pursuant to the
provisions of Section 16(b) of the Securities Exchange Act or other provisions
of any federal, state or local statute or rules and regulations thereunder;
(iii) a final judgment or other final adjudication that the indemnitee's conduct
was in bad faith, knowingly fraudulent or deliberately dishonest or constituted
willful misconduct (but only to the extent of such specific determination); or
(iv) on account of conduct that is established by a final judgment as
constituting a breach of indemnitee's duty of loyalty to us or resulting in any
personal profit or advantage to which indemnitee is not legally entitled.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit
Number Description
10.1 Stock Purchase Agreement dated as of October 12, 2021 between
EKIMAS Corporation and Reddington Partners LLC.
10.2 Indemnification Agreement dated as of October 12, 2021 between
EKIMAS Corporation and Bennett J. Yankowitz.
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