ADTRAN HOLDINGS, INC. Item 8.01 Other Events
Effectiveness of the Domination and Profit and Loss Transfer Agreement
On
Under the DPLTA, subject to certain limitations pursuant to applicable law and the specific terms of the DPLTA, (i) the Company is entitled to issue binding instructions to the management board of ADVA, (ii) ADVA will transfer its annual profit to the Company, subject to, among other things, the creation or dissolution of certain reserves, and (iii) the Company will generally absorb the annual net loss incurred by ADVA. The obligation of ADVA to transfer its annual profit to the Company applies for the first time to the profit generated in the ADVA fiscal year 2023. The obligation of the Company to absorb ADVA's annual net loss applies for the first time to the loss generated in the ADVA fiscal year 2023.
Additionally, and subject to certain limitations pursuant to applicable law and
the specific terms of the DPLTA, the DPLTA provides that ADVA shareholders be
offered, at their election, (i) to put their ADVA shares to the Company in
exchange for a compensation in cash of
The adequacy of both forms of compensation may be challenged by minority shareholders of ADVA via court-led appraisal proceedings under German law, and it is possible that the courts in such appraisal proceedings may adjudicate a higher Exit Compensation or Annual Recurring Compensation (in each case, including interest thereon) than agreed upon in the DPLTA.
The opportunity for outside ADVA shareholders to tender ADVA shares in exchange
for Exit Compensation expires two months after the date on which the entry of
the DPLTA in the commercial register has been announced. Accordingly, the
deadline ends at the end of
Additionally, in the event that the DPLTA is terminated by either party, the Company is obligated to acquire any ADVA shares tendered by outside shareholders to the Company for Exit Compensation until such date that is two months following the registration of the termination of the DPLTA with the commercial register.
On
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following exhibits are filed with this report:
Exhibit No. Description 99.1 Press release issued by the Company, datedJanuary 17, 2023 104 Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document.
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CAUTIONARY STATEMENT ABOUT FORWARD LOOKING STATEMENTS
Certain statements contained in this document regarding matters that are not
historical facts are forward-looking statements (as defined in the Private
Securities Litigation Reform Act of 1995). They are generally identified by the
use of words such as "believe," "expect," "intend," "estimate," "anticipate,"
"will," "may," "could" and similar expressions, which forward-looking statements
reflect management's best judgment based on factors currently known. However,
these statements involve risks and uncertainties, including: (i) risks and
uncertainties related to manufacturing and supply chain constraints, including
as a result of the continued impact of
the SARS-CoV-2 coronavirus/COVID-19 global pandemic; (ii) risks and
uncertainties related to the completed business combination between the Company,
ADTRAN and ADVA; the ability to successfully integrate ADTRAN's and ADVA's
businesses; risks related to disruption of management time from ongoing business
operations due to integration efforts following the business combination; the
risk that the Company may be unable to achieve expected synergies or that it may
take longer or be more costly than expected to achieve those synergies; the risk
of fluctuations in revenue due to lengthy sales and approval process required by
major and other service providers for new products; the risk posed by potential
breaches of information systems and cyber-attacks; the risks that ADTRAN, ADVA
or the Company may not be able to effectively compete, including through product
improvements and development; (iii) risks and uncertainties related to the
DPLTA, including the risk that it may be terminated; risks associated with any
appraisal proceedings; and the risk that the DPLTA could have adverse effects on
the Company's operating results and businesses generally; and (iv) other risks
set forth in ADVA's annual and interim financial reports made publicly available
and ADTRAN's and the Company's public filings made with the
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