Astrotech Corporation (Nasdaq:ASTC), a leading provider of commercial aerospace services, today announced that it has completed an internal reorganization and will now own 100% of its subsidiary companies 1st Detect Corporation ("1st Detect") and Astrogenetix Inc. ("Astrogenetix"), in which it had previously issued equity grants to employees.
"This transaction was the right thing to do for our shareholders," said Thomas B. Pickens III, Chairman and CEO of Astrotech. "The subsidiary equity grants were meant to incentivize our employees, however we found that it caused confusion and uncertainty among our shareholders, so we have now simplified our corporate structure."
This transaction will restore the ownership by Astrotech shareholders of 100% of the subsidiary companies. Previously, Astrotech Corporation owned 86.4% and 83.6% of 1st Detect and Astrogenetix, respectively.
In connection with the Annual Shareholders Meeting scheduled for June 26th, the company asked its shareholder to authorize additional shares in Astrotech Corporation to be used for future incentive compensation. Many of these shares will be used to compensate those hardworking employees who will no longer own stock in 1st Detect and Astrogenetix.
If the Asset Sale is completed, all of our assets related to or used in the ASO Business will be sold, and Buyer will be the sole beneficiary of any future earnings from those assets. The proceeds from the Asset Sale will be used to pay off our outstanding indebtedness under our financing facility and to repay Texas Emerging Technology Fund for the investment it made in 1st Detect. In addition, we will pay for all costs related to the transaction, including taxes, legal fees and filing fees. Finally, we will incur ongoing operating costs as we grow 1st Detect and other operations under our Spacetech Business.
Additionally, while we expect to continue to sell mass spectrometer units as we continue to expand the commercialization of our 1st Detect technology, we also plan to sell data analytic and predictive analytic solutions that will be available real-time in the Cloud.
To date, 1st Detect’s miniaturized mass spectrometer has been in a research and development phase. With our first commercial contract announced on January 29, 2014, with Rigaku, our goal is to position 1st Detect to grow and become a profitable component of the Company’s business. As 1st Detect transitions into manufacturing, capital will be required for market specific R&D, full scale manufacturing, inventory and marketing. While we have identified and started to approach our target markets, with the additional capital, we will have the ability to more aggressively penetrate the following target markets:
• Pharmaceutical manufacturing • Semiconductor manufacturing • Chemical processing • Food & beverage manufacturing • Environmental • Airport security • Military • Water & wastewater • First responders • Healthcare • Critical infrastructure
Astrotech Corporation, our corporate structure, our public reporting obligations and the listing of our common stock on the NASDAQ Capital Market under the symbol ASTC will not be affected as a result of completing the Asset Sale.
If the Asset Sale is completed, we will retain any debts and liabilities of Astrotech Corporation not repaid or assumed by Buyer pursuant to the Asset Purchase Agreement, including expenses related to our remaining Spacetech Business. If the Asset Sale is completed, Astrotech will receive the consideration pursuant to the Asset Purchase Agreement.
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