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Commitments and Contingencies | 9 Months Ended
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Sep. 28, 2019
Commitments And Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Note 11. Commitments and Contingencies Merger – Rudolph Technologies, Inc. – On June 23, 2019, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) with Rudolph Technologies, Inc. (“Rudolph”) and PV Equipment Inc., a wholly-owned subsidiary of the Company to effect the merger (“Merger”) of Rudolph with and into PV Equipment Inc., with Rudolph surviving the Merger as a wholly-owned subsidiary of the Company. Regulatory and stockholder approvals from both the Company’s stockholders and those of Rudolph were obtained and the Merger closed on October 25, 2019. Under the terms set forth in the Merger Agreement, each outstanding share of common stock, par value $0.001 per share, of Rudolph was converted into 0.8042 shares of common stock, par value $0.001, of the Company. Upon closure of the Merger, Rudolph’s common stockholders owned approximately 50% and Nanometrics’ common stockholders prior to the Merger owned approximately 50% of the outstanding shares of common stock of the combined company on a fully diluted basis. The results of the Company’s stockholders’ vote on matters relating to the Merger were included in the Company’s Current Report on Form 8-K filed with the SEC on October 24, 2019, and information regarding the closing of the Merger was included in the Company’s Current Report on Form 8-K filed with the SEC on October 28, 2019. The combined company will account for the acquisition pursuant to the Merger Agreement as a reverse acquisition using the acquisition method of accounting in accordance with generally accepted accounting principles, with Rudolph being treated as the acquiring entity for accounting purposes. In identifying Rudolph as the accounting acquiring entity, Nanometrics and Rudolph reviewed the accounting guidance as provided in Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations”, which takes into account the type of consideration, the structure of the Merger and the other transactions contemplated by the Merger Agreement, relative outstanding share ownership, the composition of the combined company board of directors, designation of certain senior management positions of the combined company, mainly the Chief Executive Officer and the Chief Financial Officer, relative voting rights, relative size as measured by assets, revenue or earnings as well as other metrics an investor would use for evaluating the respective company’s current and future financial performance, which of the combining entities initiated the combination and where the combined company’s headquarters will be located. Intellectual Property Indemnification Obligations – The Company will, from time to time, in the normal course of business, agree to indemnify certain customers, vendors or others against third party claims that the Company’s products, when used for their intended purpose(s), or the Company’s intellectual property, infringe the intellectual property rights of such third parties or other claims made against parties with whom it enters into contractual relationships. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each particular claim. Historically, the Company has not made payments under these obligations and believes that the estimated fair value of these agreements is immaterial. Accordingly, no liabilities have been recorded for these obligations in the accompanying condensed consolidated balance sheets as of September 28, 2019 and December 29, 2018. Legal Proceedings - From time to time, the Company is subject to various legal proceedings or claims arising in the ordinary course of business. On August 2, 2017, the Company was named as defendant in a complaint filed in New Hampshire Superior Court (“Complaint”). The Complaint, brought by Optical Solutions, Inc. (“OSI”), alleges claims arising from a purported exclusive purchase contract between OSI and the Company pertaining to certain product. On September 18, 2017, the Company removed the action to the United States District Court for the District of New Hampshire. On September 25, 2017, the Company moved to transfer the Complaint to the District Court for the Northern District of California. On December 20, 2017, the Company filed its complaint against OSI in the California Superior Court for the County of Santa Clara alleging claims arising from OSI’s breach of certain purchase orders. The Company’s complaint was later removed by OSI to the Northern District of California. On May 29, 2018, the District Court of New Hampshire issued an order granting the Company’s motion to transfer OSI’s Complaint to the Northern District of California and denying the Company’s motion to dismiss the Complaint without prejudice. On June 14, 2018, OSI’s Complaint was consolidated with the Company’s complaint against OSI. On August 9, 2018, OSI filed an Amended Complaint. On September 19, 2018, the Company filed a motion to dismiss OSI’s Amended Complaint for failure to state a claim. The Company’s motion to dismiss was heard on February 28, 2019. On March 5, 2019 the Court granted the Company’s motion to dismiss with leave to amend. OSI filed a Second Amended Complaint on March 29, 2019. The Company filed a motion to dismiss the Second Amended Complaint on May 31, 2019. The Company’s motion to dismiss OSI’s Second Amended Complaint is now fully briefed. A hearing on the Company’s motion to dismiss the Second Amended Complaint is scheduled for November 14, 2019. Trial has been set for May 16, 2022. Following the announcement of the Company’s proposed merger transaction with Rudolph, two purported class action complaints and three complaints were filed on behalf of Rudolph’s stockholders against Rudolph and its directors; of those five complaints, three were filed in the United States District Court for the District of Delaware, one in the United States District Court for the District of New Jersey, and one in the United States District Court for the District of Massachusetts. One of those five complaints also names the Company and the subsidiary formed to effectuate the proposed merger transaction as defendants. A sixth complaint was filed on behalf of a Company stockholder against the Company and its directors in the United States District Court for the Northern District of California. The complaints are captioned as follows: Stein v. Rudolph Technologies, Inc., et al. (D. Del.); Rosenblatt v. Rudolph Technologies, Inc., et al. (D. Del.); Stein v. Rudolph Technologies, Inc., et al. (D. Del.); Parikh v. Rudolph Technologies, Inc., et al. (D.N.J.); Roy v. Rudolph Technologies, Inc., et al. (D. Mass.); and Bryden-Moore v. Nanometrics Inc., et al. (N.D. Cal.). The Company refers to these actions collectively as the “Shareholder Actions.” The complaints in the Shareholder Actions generally assert claims under Sections 14(a) and 20(a) of the Exchange Act challenging the adequacy of certain disclosures made in the version of the joint proxy statement/prospectus filed with the SEC on August 15, 2019, or, solely with respect to the complaint captioned Roy v. Rudolph Technologies, Inc., et al. (D. Mass.), the version of the joint proxy statement/prospectus filed with the SEC on September 10, 2019. The complaints seek, among other relief, an injunction preventing Rudolph from holding the Rudolph special meeting or consummating the transaction, an injunction preventing the Company from consummating the transaction, damages in the event that the merger is consummated, and attorneys’ fees. On October 11, 2019, plaintiffs in each of the Shareholder Actions agreed in principle to dismiss their claims in connection with the issuance of certain supplemental disclosures regarding the transaction and reserved the right to seek attorneys’ fees. The Company records a provision for a loss when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Based on current information, the Company believes it does not have any probable and reasonably estimable losses related to any current legal proceedings and claims. Although it is difficult to predict the outcome of legal proceedings, the Company believes that any liability that may ultimately arise from the resolution of these ordinary course matters will not have a material adverse effect on the business, financial condition and results of operations.

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