Phunware Inc (NASDAQ:PHUN)., a fully integrated enterprise cloud platform for mobile that provides products, solutions, data, and services for brands worldwide, has executed a definitive agreement to acquire Lyte Technology.
Phunware said the accretive transaction contemplates a total purchase price in cash and stock of up to $10.32 million, with $3.32 million cash at closing and the remaining $7 million tied to both time and financial performance requirements for one year post-closing.
The maximum amount of stock issuable post-closing would constitute $2.25 million over 12 months and an additional $1.25 million contingent upon generating $12 million for the one-year period post-closing. The company also maintains options against future payments to proactively minimize dilution while maximizing financial performance.
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“We are extremely excited to announce our first acquisition since going public, adding not only talent and profitable revenue to our P&L, but also a key strategic distribution network for our blockchain initiatives,” said Phunware CEO Alan Knitowski in a statement.
“Although we just recently launched PhunCoin and PhunToken, this acquisition is an important first step in achieving our longer-term strategy of activating a worldwide distributed network of high-end computer systems that can serve as decentralized oracles, validators and nodes that efficiently bridge the gap between external data on the existing web and blockchain-based applications on mobile.”
Founded only two years ago, Phunware said Lyte is a profitable, rapidly growing computer company that specializes in marketing and distributing custom, high-end computer systems off-the-shelf with advanced graphic processing units for gaming, streaming, and cryptocurrency mining.
Currently located in Illinois, Lyte employs over 25 people and ships thousands of computer systems per month to a unique customer network that has largely been built through word-of-mouth. These customers represent gamers, developers, content creators, and crypto enthusiasts alike and will facilitate the early adoption and scale of Phunware's innovative new data economy.
“I am looking forward to joining Phunware to further resource and scale my fast-growing business as part of a unique public company with a strategic focus on the global data economy,” said Caleb Borgstrom, founder and CEO of Lyte Technology. “Since inception, our demand has always outpaced our available supply. As a result, I expect that me and my team will be able to materially contribute to Phunware’s operational and financial success while leveraging a worldwide network of high-end computer systems to accelerate Phunware’s plans for a blockchain-enabled, environmentally-friendly and truly decentralized consumer data platform.”
Phunware said the acquisition is expected to formally close within the next 30 to 45 days when customary closing conditions are fulfilled by both parties. Upon closing, Lyte’s operations and leadership will relocate to Austin, Texas.
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