Communications Systems, Inc. (“CSI” or the “Company”), announced that following CSI shareholder approval and satisfaction of other customary conditions, it completed the sale of the Transition Networks and Net2Edge businesses, which comprised substantially all of the assets of the Company’s Electronics & Software Segment, to Lantronix, Inc. (Nasdaq: LTRX) (“Lantronix”).
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At the closing, CSI received a $24.16 million cash payment, which was based on a $25.0 million closing payment, as adjusted by estimated closing net working capital. This amount may be further adjusted to reflect the final closing net working capital amount. Also, up to an additional $7.0 million may be paid by Lantronix to CSI in earnouts based on revenue milestones for the Transition Networks and Net2Edge businesses in the two 180-day periods after closing of the sale.
In connection with the sale of the Electronics & Software Segment to Lantronix, effective immediately, Anita Kumar stepped down as CSI’s Chief Executive Officer and resigned as a CSI director and has joined Lantronix. Roger Lacey, the Executive Chairman of the CSI Board of Directors, also effective immediately, assumed the additional role of Interim Chief Executive Officer until the closing of the CSI-Pineapple merger transaction is completed.
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