XPER 8-K
Xperi Inc. (XPER)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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Registrant’s Telephone Number, Including Area Code: |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On October 2, 2024, Xperi Inc. (the “Company”) closed the previously announced transaction contemplated by that certain Asset Purchase Agreement (the “Agreement”), dated August 14, 2024, between the Company, Perceive Corporation (“Seller”) (of which the Company indirectly owns approximately 76.2% of the equity interests), and Amazon.com Services LLC (“Buyer”) pursuant to which Buyer agreed to purchase and assume from Seller substantially all the assets and certain liabilities of Seller for $80 million in cash, including a holdback to secure the Company’s and Seller’s indemnification obligations (the “Transaction”).
The Company expects net proceeds from the asset sale to be approximately $52 million after taxes, closing costs, and fees, with the net amount inclusive of a holdback to secure indemnification obligations payable in cash by Buyer after the holdback period. Further, the Company intends to use a portion of the net proceeds to repurchase its common stock. The Transaction is expected to improve the Company’s Adjusted EBITDA margin by approximately one percentage point on an annualized basis.
The above summary does not purport to be complete and is qualified in its entirety by the text of the Agreement, which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
Forward Looking Statements
This Current Report on Form 8-K (this “Form 8-K”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the amount of net proceeds to the Company and the use of the net proceeds, payment of the holdback amount and the impact of the transaction on the Company’s Adjusted EBITDA margin. These forward-looking statements are based on information available to the Company as of the date hereof, as well as the Company’s current expectations, assumptions, estimates and projections that involve risks and uncertainties. In some cases, you can identify forward-looking statements by the words “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “expect,” “target,” and similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) and the Company’s other filings with the SEC from time to time. Any forward-looking statements speak only as of the date of this Form 8-K and are based on information available to the Company as of the date of this filing, and the Company does not assume any obligation to, and does not intend to, update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed consolidated financial information of the Company giving effect to the Transaction is filed as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference:
(d) Exhibits.
Exhibit No. |
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Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 2, 2024 |
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Xperi Inc. |
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By: |
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/s/ Robert Andersen |
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Name: |
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Robert Andersen |
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Title: |
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Chief Financial Officer |
Exhibit 99.1
XPERI INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
On October 2, 2024 (the “Closing Date”), Xperi Inc. (the “Company” or “Xperi”) completed the sale of substantially all of the assets and certain liabilities of its subsidiary, Perceive Corporation (“Seller”), of which the Company owns approximately 76.2% of the equity interests, to Amazon.com Services LLC (“Buyer”) for $80.0 million in cash (the “Transaction”), pursuant to the terms of the Asset Purchase Agreement (the “Agreement”) entered into on August 14, 2024. At the Closing Date, Buyer paid $68.0 million in cash to Seller, while the remaining $12.0 million is being held back (the “Indemnification Holdback Amount”) to secure the Company’s and Seller's indemnification obligations for 18 months after the Closing Date.
The Transaction is considered a disposition of a significant business under Item 2.01 of Form 8-K. As a result, the unaudited pro forma condensed consolidated financial statements have been prepared in accordance with U.S. Securities and Exchange Commission (the “SEC”) Regulation S-X Article 11, Pro Forma Financial Information. The accompanying unaudited pro forma condensed consolidated balance sheet of the Company is presented as if the Transaction had occurred as of June 30, 2024. The accompanying unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2024 and the year ended December 31, 2023 (collectively the “Pro Forma Periods”) is presented as if the Transaction had occurred on January 1, 2023. The amounts included in the Xperi Historical columns represent the Company’s historical balance sheet as of June 30, 2024 and statements of operations for the respective Pro Forma Periods presented. The pro forma adjustments consist only of “Transaction Accounting Adjustments” (within the meaning of Regulation S-X Article 11-02(a)(6)(i)). The pro forma adjustments under the sub-column “Transaction” are intended to capture the immediate effects of the Transaction, and the pro forma adjustments under the sub-column “Other” are intended to capture separate activities from the Transaction (that are still “Transaction Accounting Adjustments”).
The pro forma adjustments are preliminary, based upon available information and made solely for the purpose of providing these unaudited pro forma financial statements, which are for informational purposes only and are not necessarily indicative of what our financial performance and financial position would have been had the Transaction been completed as of the dates indicated, nor do they purport to project the future financial position or operating results to be expected in any future period.
The unaudited pro forma financial statements should be read in conjunction with the accompanying notes thereto. In addition, the unaudited pro forma financial statements were based on and should be read in conjunction with:
The Transaction does not meet the criteria requiring discontinued operations presentation in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 205 (“ASC 205”), Presentation of Financial Statements, as it does not constitute a strategic shift for the Company.
1
XPERI INC. |
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET |
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AS OF JUNE 30, 2024 |
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(in thousands) |
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(unaudited) |
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Transaction Accounting Adjustments |
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Xperi |
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Pro |
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Historical |
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Transaction |
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Notes |
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Other |
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Notes |
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Forma |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
92,481 |
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$ |
68,000 |
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(a) |
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$ |
— |
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$ |
160,481 |
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Accounts receivable, net |
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56,866 |
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— |
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— |
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56,866 |
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Unbilled contracts receivable, net |
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80,679 |
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— |
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— |
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80,679 |
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Prepaid expenses and other current assets |
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36,365 |
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(1,326 |
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(b) |
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— |
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35,039 |
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Total current assets |
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266,391 |
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66,674 |
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— |
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333,065 |
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Note receivable, noncurrent |
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28,571 |
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— |
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— |
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28,571 |
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Deferred consideration from divestiture |
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6,267 |
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— |
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— |
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6,267 |
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Unbilled contracts receivable, noncurrent |
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23,504 |
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— |
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— |
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23,504 |
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Property and equipment, net |
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42,241 |
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(118 |
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(b) |
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— |
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42,123 |
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Operating lease right-of-use assets |
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34,756 |
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(21 |
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(b) |
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— |
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34,735 |
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Intangible assets, net |
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184,898 |
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— |
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— |
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184,898 |
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Deferred tax assets |
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4,950 |
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— |
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— |
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4,950 |
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Other noncurrent assets |
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27,669 |
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11,083 |
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(b) (c) |
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— |
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38,752 |
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Total assets |
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$ |
619,247 |
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$ |
77,618 |
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$ |
— |
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$ |
696,865 |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
14,314 |
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$ |
— |
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$ |
— |
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$ |
14,314 |
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Accrued liabilities |
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90,469 |
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9,426 |
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(b) (d) |
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13,205 |
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(e) |
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113,100 |
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Deferred revenue |
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27,728 |
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— |
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— |
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27,728 |
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Total current liabilities |
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132,511 |
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9,426 |
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13,205 |
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155,142 |
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Long-term debt |
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50,000 |
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— |
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— |
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50,000 |
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Deferred revenue, noncurrent |
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22,455 |
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— |
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— |
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22,455 |
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Operating lease liabilities, noncurrent |
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24,401 |
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— |
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— |
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24,401 |
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Deferred tax liabilities |
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7,003 |
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— |
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— |
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7,003 |
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Other noncurrent liabilities |
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12,797 |
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— |
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— |
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12,797 |
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Total liabilities |
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249,167 |
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9,426 |
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13,205 |
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271,798 |
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Equity: |
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Common stock |
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46 |
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— |
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— |
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46 |
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Additional paid-in capital |
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1,241,931 |
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— |
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— |
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1,241,931 |
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Accumulated other comprehensive loss |
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(4,377 |
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— |
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— |
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(4,377 |
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Accumulated deficit |
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(848,867 |
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51,989 |
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(d) (f) |
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(13,205 |
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(e) |
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(810,083 |
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Total Company stockholders’ equity |
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388,733 |
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51,989 |
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(13,205 |
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427,517 |
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Noncontrolling interest |
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(18,653 |
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16,203 |
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(g) |
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— |
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(2,450 |
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Total equity |
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370,080 |
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68,192 |
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(13,205 |
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425,067 |
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Total liabilities and equity |
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$ |
619,247 |
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$ |
77,618 |
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$ |
— |
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$ |
696,865 |
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The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
2
XPERI INC. |
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PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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FOR THE SIX MONTHS ENDED JUNE 30, 2024 |
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(in thousands, except per share amounts) |
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(unaudited) |
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Transaction Accounting Adjustments |
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Xperi |
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Pro |
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Historical |
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Transaction |
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Other |
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Notes |
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Forma |
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Revenue |
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$ |
238,435 |
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$ |
(4,066 |
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$ |
— |
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(h) |
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$ |
234,369 |
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Operating expenses: |
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Cost of revenue, excluding depreciation and amortization of intangible assets |
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58,709 |
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(1,714 |
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— |
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(h) |
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56,995 |
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Research and development |
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95,562 |
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(3,919 |
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— |
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(h) |
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91,643 |
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Selling, general and administrative |
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109,455 |
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(911 |
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— |
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(h) |
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108,544 |
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Depreciation expense |
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6,862 |
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(49 |
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— |
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(h) |
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6,813 |
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Amortization expense |
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22,081 |
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— |
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— |
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22,081 |
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Total operating expenses |
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292,669 |
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(6,593 |
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— |
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286,076 |
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Operating loss |
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(54,234 |
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2,527 |
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— |
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(51,707 |
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Interest and other income, net |
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2,332 |
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328 |
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— |
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(h) (i) |
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2,660 |
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Interest expense - debt |
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(1,496 |
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— |
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— |
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(1,496 |
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Gain on divestiture |
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22,934 |
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— |
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— |
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22,934 |
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Loss before taxes |
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(30,464 |
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2,855 |
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— |
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(27,609 |
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Provision for income taxes |
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13,538 |
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12 |
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— |
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(j) |
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13,550 |
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Net loss |
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(44,002 |
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2,843 |
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— |
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(41,159 |
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Less: net (loss) income attributable to noncontrolling interest |
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(583 |
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654 |
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— |
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(k) |
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71 |
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Net loss attributable to the Company |
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$ |
(43,419 |
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$ |
2,189 |
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$ |
— |
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$ |
(41,230 |
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Net loss per share attributable to the Company - basic and diluted |
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$ |
(0.97 |
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$ |
(0.92 |
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Weighted-average number of shares used in net loss per share calculations - basic and diluted |
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44,926 |
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44,926 |
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The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
3
XPERI INC. |
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PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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FOR THE YEAR ENDED DECEMBER 31, 2023 |
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(in thousands, except per share amounts) |
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(unaudited) |
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Transaction Accounting Adjustments |
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Xperi |
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Pro |
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Historical |
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Transaction |
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Notes |
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Other |
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Notes |
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Forma |
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Revenue |
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$ |
521,334 |
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$ |
(3,605 |
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(h) |
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$ |
— |
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$ |
517,729 |
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Operating expenses: |
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Cost of revenue, excluding depreciation and amortization of intangible assets |
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118,628 |
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(1,470 |
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(h) |
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— |
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117,158 |
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Research and development |
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222,833 |
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(12,791 |
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(h) |
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6,787 |
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(l) |
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216,829 |
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Selling, general and administrative |
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233,403 |
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(2,657 |
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(h) |
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6,418 |
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(l) |
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237,164 |
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Depreciation expense |
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16,645 |
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(117 |
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(h) |
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— |
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16,528 |
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Amortization expense |
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57,752 |
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— |
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— |
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57,752 |
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Impairment of long-lived assets |
|
|
1,710 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
1,710 |
|
Total operating expenses |
|
|
650,971 |
|
|
|
(17,035 |
) |
|
|
|
|
13,205 |
|
|
|
|
|
647,141 |
|
Operating loss |
|
|
(129,637 |
) |
|
|
13,430 |
|
|
|
|
|
(13,205 |
) |
|
|
|
|
(129,412 |
) |
Interest and other income, net |
|
|
2,991 |
|
|
|
586 |
|
|
(h) (i) |
|
|
— |
|
|
|
|
|
3,577 |
|
Interest expense - debt |
|
|
(3,000 |
) |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(3,000 |
) |
Gain on divestiture |
|
|
— |
|
|
|
77,635 |
|
|
(m) |
|
|
— |
|
|
|
|
|
77,635 |
|
Loss before taxes |
|
|
(129,646 |
) |
|
|
91,651 |
|
|
|
|
|
(13,205 |
) |
|
|
|
|
(51,200 |
) |
Provision for income taxes |
|
|
10,042 |
|
|
|
14,559 |
|
|
(j) |
|
|
— |
|
|
|
|
|
24,601 |
|
Net loss |
|
|
(139,688 |
) |
|
|
77,092 |
|
|
|
|
|
(13,205 |
) |
|
|
|
|
(75,801 |
) |
Less: net (loss) income attributable to noncontrolling interest |
|
|
(3,075 |
) |
|
|
17,745 |
|
|
(k) |
|
|
(2,964 |
) |
|
(k) |
|
|
11,706 |
|
Net loss attributable to the Company |
|
$ |
(136,613 |
) |
|
$ |
59,347 |
|
|
|
|
$ |
(10,241 |
) |
|
|
|
$ |
(87,507 |
) |
Net loss per share attributable to the Company - basic and diluted |
|
$ |
(3.18 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(2.03 |
) |
||
Weighted-average number of shares used in net loss per share calculations - basic and diluted |
|
|
43,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
43,012 |
|
||
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.
4
XPERI INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated financial statements reflect the following adjustments:
|
|
Six Months Ended |
|
|
Year Ended |
|
||
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Elimination of net loss attributable to noncontrolling interest |
|
$ |
583 |
|
|
$ |
3,075 |
|
Seller's share of estimated gain recognized from the Transaction |
|
|
— |
|
|
|
17,889 |
|
Seller's share of interest income accreted |
|
|
74 |
|
|
|
135 |
|
Seller's share of estimated income tax effect related to the Transaction |
|
|
(3 |
) |
|
|
(3,354 |
) |
Pro forma adjustment related to the Transaction |
|
|
654 |
|
|
|
17,745 |
|
Seller's share of personnel-related expenses and other Transaction-related costs |
|
|
— |
|
|
|
(2,964 |
) |
Total pro forma adjustments to net loss attributable to noncontrolling interest |
|
$ |
654 |
|
|
$ |
14,781 |
|
5
6