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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 5, 2017 (March 31, 2017)
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AERKOMM INC. |
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(Exact name of registrant as specified in its charter) |
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Nevada |
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333-192093 |
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46-3424568 |
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(State or other jurisdiction
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(Commission
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(IRS Employer
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44043 Fremont Blvd.
Fremont, CA 94538
(Address of principal executive offices)
(877) 742-3094
(Registrant's telephone number, including area code)
Not Applicable
(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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The information contained in Item 3.02 below is incorporated herein by reference.
Item 3.02 Unregistered Sale of Equity Securities.
On March 31, 2017, Aerkomm Inc. (the “Company”) completed its private placement offering (the “Offering”) of up to a maximum of 500,000 shares (the “Shares”) of the Company’s common stock, $0.001 par value per share, at a price of $3.00 per share for an aggregate of $1,500,000 (the “Maximum Amount”). The Company sold the Maximum Amount in the Offering.
The subscription agreements between the Company and each of the investors in the Offering provide that the Company will file with the Securities and Exchange Commission not later than ninety (90) days after the date of the final closing of the Offering a registration statement on an appropriate form covering the resale of the Shares.
The sales of the Shares were exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(a)(2) thereof and Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering. The purchasers of the securities represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate restrictive legends are being affixed to the certificates evidencing the Shares issued in the Offering. All purchasers of the securities represented and warranted, among other things, that they were “accredited investors” within the meaning of Rule 501 of Regulation D, that they had the knowledge and experience in financial and business matters necessary to evaluate the merits and risks of an investment in the Company, that they had the ability to bear the economic risks of the investment, and that they had adequate access to information about the Company.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 31, 2017, the Board of Directors of the Company appointed Mr. Y. Tristan Kuo as the Company’s Chief Financial Officer, effective as of April 10, 2017.
On the same date, the Company entered into an employment agreement with Mr. Kuo (the “Employment Agreement”), pursuant to which the Company agreed to pay Mr. Kuo an annual salary of $100,000, plus a guaranteed bonus of $85,000 payable on the earlier of (i) the first anniversary of Mr. Kuo’s employment or (ii) upon closing of an equity or equity linked financing in which the Company or its subsidiaries raises at least $15 million. Mr. Kuo will also be entitled to an annual bonus as recommended by the Company’s Chief Executive Officer and approved by the Board of Directors. In addition, the Company agreed to grant Mr. Kuo an option to purchase 300,000 shares of the Company’s common stock, with one quarter of the shares underlying the option to be vested immediately and the remaining shares to be vested equally over three years on each anniversary of Mr. Kuo’s employment. Such option will be granted under an equity incentive plan once such plan is approved by the Company’s stockholders. In addition, during the first nine months of Mr. Kuo’s employment or until he relocates, if earlier, the Company also agreed to provide a furnished living accommodation, a car allowance of $400 per month, and a personal travel allowance of $600 per month for Mr. Kuo to visit his spouse or vice versa. The Company also agreed to pay up to $6,000 in relocation expenses, should Mr. Kuo decide to relocate. The Company will also be responsible for medical insurance under the Company’s medical plan or will reimburse the premium of a medical plan that is comparable to the medical plan offered to other employees. Mr. Kuo will also be eligible to participate in other standard benefits plans offered to similarly situated employees by the Company from time to time.
The Employment Agreement also contains covenants prohibiting Mr. Kuo from competing with the Company during his employment, or from soliciting any employees or consultants of the Company for a period of two years after his employment ends. The Employment Agreement also contains customary confidentiality provisions. The Employment Agreement may be terminated by either party for any reason upon 30 days’ notice. If Mr. Kuo’s employment is terminated by the Company without cause, then the portion of stock options to be vested for the year if completed shall be vested immediately.
Mr. Kuo, age 62, has more than 30 years of experience in accounting, financing and information systems for companies in the bio-pharmaceutical, manufacturing, commodity trading and banking industries and has served in the capacity of CFO, CIO and Controller. Mr. Kuo serves as the Vice President of Investor Relations of Nutrastar International Inc. (OTCPK: NUIN), a China based producer and supplier of commercially cultivated Cordyceps Militaris, since April 2016. Mr. Kuo has also served as the Chief Financial Officer of Success Holding Group International, Inc., a provider of personal improvement seminars, from August 2015 to April 2017. Prior to that, he served as CFO/CIO Partner of Tatum, a management and advisory services firm, from December 2014 to August 2015, as an independent board member and audit committee chairman of KBS Fashion Group Limited (NASDAQ: KBSF) from August 2014 to May 2015, and as the Chief Financial Officer of Crown Bioscience, Inc. from June 2012 to November 2013. Prior to that, Mr. Kuo served as Chief Financial Officer of China Biologic Products, Inc. (NASDAQ: CBPO), a Chinese biopharmaceutical company, from June 1, 2008 to May 31, 2012 and served as its Vice President – Finance between September 2007 and May 31, 2008. Prior to that, Mr. Kuo worked for the Noble Group in Hong Kong as the Senior Business Analysis Manager from February through August 2007 and as the Controller, Vice President – Finance and CFO of Cuisine Solution, Inc., a then publicly traded company in Alexandria, Virginia, from December 2002 to January 2007. Mr. Kuo also served as the Vice President of Information System for Zinc Corporation of America in Monaca, Pennsylvania from 2001 and 2002 and as Chief Information Officer and Controller of Wise Metals Group in Baltimore, Maryland, the largest independent aluminum sheet producer in the U.S., from 1991 to 2001. Mr. Kuo obtained his Master’s degree in Accounting from The Ohio State University and Bachelor’s degree in Economics from Soochow University in Taipei.
Mr. Kuo was elected until his successor is duly elected and qualified. There are no arrangements or understandings between Mr. Kuo and any other persons pursuant to which he was selected as an officer. There is no family relationship that exists between Mr. Kuo and any directors or executive officers of the Company. In addition, there has been no transaction, nor is there any currently proposed transaction between Mr. Kuo and the Company, that would require disclosure under Item 404(a) of Regulation S-K.
The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement filed as Exhibit 10.2 to this Form 8-K, which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed herewith:
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Exhibit No. |
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Description of Exhibit |
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10.1 |
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Form of Common Stock Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 1, 2017) |
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Employment Agreement, dated March 31, 2017, between Aerkomm Inc. and Y. Tristan Kuo |
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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.
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AERKOMM INC. |
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Date: April 5, 2017 |
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/s/ Peter Chiou |
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Name: |
Peter Chiou |
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Title: |
Chief Executive Officer |
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EXHIBIT INDEX
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Exhibit No. |
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Description of Exhibit |
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10.1 |
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Form of Common Stock Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 1, 2017) |
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Employment Agreement, dated March 31, 2017, between Aerkomm Inc. and Y. Tristan Kuo |
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EXHIBIT 10.2
Aerkomm Inc.
March 31, 2017
Yu-Yun Tristan Kuo
10369 Breconshire Road
Ellicott City, MD 21042
Re: Employment Terms
Dear Mr. Kuo,
Aerkomm Inc. (the “ Company ”) is pleased to offer you the position of Chief Financial Officer, on the following terms.
You will be responsible for duties and services that are normally associated with and inherent in the capacity in which you will be employed, as well as such other duties as shall from time to time be assigned to you by the Board of Directors or the Chief Executive Officer of the Company. You will report to Mr. Peter Chiou, the Chief Executive Officer and will initially work at the facility of our subsidiary located at 44043 Fremont Blvd., Fremont, CA 94538.
You agree to serve without additional compensation if elected or appointed as an officer and/or director of the Company and any of the subsidiaries or affiliates.
Your initial base salary will be $100,000.00 per year (equivalent to $8333.33 per month) plus a guaranteed bonus of $85,000.00 (accruing at the rate of $7,083.33 per month) payable at the earlier of (i) your first anniversary or (ii) upon closing of an equity or equity linked financing in which the Company or its subsidiaries raises at least $15 million, less payroll deductions and withholdings, paid on the Company’s normal payroll schedule. In addition to your annual base salary:
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1. | You are entitled to an annual bonus as recommended by the Chief Executive Officer and approved by the Board of Directors. This shall be in addition to the guaranteed bonus mentioned above. |
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2. | The Company will be responsible for the medical insurance for you and your spouse under the Company’s medical plan or will reimburse the premium of a medical plan you and your spouse enroll in that is comparable to the medical plan offered to other employees. |
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3. | The Company will provide a furnished living accommodation for you during your first nine months of employment (or until you relocate to this area, if earlier). The Company will cover your relocation expenses, up to an aggregate amount of $6,000, should you decide to relocate. |
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4. | During your first nine months of employment (or until you relocated to this area, if earlier), the Company will provide you (i) a car allowance of $400 per month, and (ii) a personal travel allowance of $600 per month for you to visit your spouse or vice versa. These allowances will be added to your base salary and you will be responsible for your portion of income or payroll taxes. |
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5. | After the Company’s shareholders’ approval of the Company’s Employee Stock Option Plan, you will be offered options to purchase 300,000 shares of the Company’s stock under said plan, with one quarter of those options vested immediately and the remaining options to be vested equally over three years on each anniversary of your employment. |
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6. | You will be entitled to twenty (20) working days of vacation per year. |
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During your employment, you will be eligible to participate in the standard benefits plans offered to similarly situated employees by the Company from time to time, subject to plan terms and generally applicable Company policies. A full description of these benefits is available upon request. The Company reserves the right to change compensation and benefits from time to time in its sole discretion.
As a Company employee, you will be expected to abide by Company rules and policies. As a condition of employment, you must sign and comply with the attached Conflict of Interest, Proprietary Information and Inventions Agreement, which prohibits unauthorized use or disclosure of the Company’s proprietary information, among other obligations.
By accepting employment with the Company, you also agree to keep all the Company’s information strictly confidential, and not to use it or disclose it to any person or entity, except as is necessary in the ordinary course of performing your work. You further acknowledge and agree that your obligation to protect our confidential information from disclosure exists both during your employment and after it ends. You also agree that at the termination of your employment, for any reason, you will return to the Company all copies (including electronic copies) of any documents or other materials you have that refer to or contain the Company’s confidential information, including notebooks, manuals, correspondence and customer lists, and that you will not retain any copies of same.
In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to whom you have an obligation of confidentiality. Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company. You agree that you will not bring onto Company premises any unpublished documents or property belonging to any former employer or other person to whom you have an obligation of confidentiality. You hereby represent that you have disclosed to the Company any contract you have signed that may restrict your activities on behalf of the Company.
Normal business hours are from 9:00 a.m. to 5:00 p.m., Monday through Friday. As an exempt salaried employee, you will be expected to work additional hours as required by the nature of your work assignments.
You may terminate your employment with the Company at any time with a 30-day notice for any reason whatsoever simply by notifying the Company. Likewise, the Company may terminate your employment at any time, with a 30-day advance notice. In addition, the portion of stock options shares to be vested for the year if completed shall be vested immediately if termination is by the Company without cause. Your employment at-will status can only be modified in a written agreement signed by both you and the Chief Executive Officer of the Company.
We believe that your employment with the Company requires a full-time commitment. Employment with any other entity, or for yourself in competition with the Company, is not permitted unless expressly authorized by the Company in writing.
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You also agree, if you accept this offer of employment, that for a period of two years after your employment ends, you will not solicit any employee of or consultant to the Company to leave his or her employment or consulting relationship with the Company in order to begin employment or a consulting relationship with any company or business in actual or potential competition with the Company or its affiliates.
This offer is contingent upon a reference check and satisfactory proof of your right to work in the United States. You agree to assist as needed and to complete any documentation at the Company’s request to meet these conditions.
This letter, together with your Conflicts of Interest, Proprietary Information and Inventions Agreement, forms the complete and exclusive statement of your employment agreement with the Company. It supersedes any other agreements or promises made to you by anyone, whether oral or written. Any changes in your employment terms, other than those changes expressly reserved to the Company’s discretion in this letter, require a written modification signed by both you and the Chief Executive Officer of the Company. It is anticipated that the Company will enter into Employment Agreements with key executives, including you, on customary terms prior to and in connection with the Company’s initial public offering; however, there is no assurance that the Company will consummate its initial public offering.
Please sign and date this letter, and the enclosed Employee Conflicts of Interest, Proprietary Information and Inventions Agreement and return them to me by April 3, 2017, if you wish to accept employment at the Company under the terms described above. If you accept our offer, we would like you to start on April 10, 2017.
We look forward to your favorable reply and to a productive and enjoyable work relationship.
Sincerely,
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/s/ Peter Chiou |
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Peter Chiou |
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Chief Executive Officer |
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Understood and Accepted: |
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By: |
/s/ Yu-Yun Tristan Kuo |
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3/31/2017 |
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Yu-Yun Tristan Kuo |
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