Actionable news
0
All posts from Actionable news
Actionable news in NEO: NeoGenomics, Inc.,

Entry into a Material Definitive

Stock Purchase Agreement

On October20, 2015, NeoGenomics,Inc. (NeoGenomics), NeoGenomics Laboratories, Inc. (NeoGenomics Laboratories) and GE Medical Holding AB (GE Medical), a subsidiary of General Electric Company (GE) entered into a Stock Purchase Agreement (the Purchase Agreement).

Pursuant to the terms of the Purchase Agreement, NeoGenomics Laboratories, a wholly owned subsidiary of NeoGenomics, will acquire from GE Medical all of the issued and outstanding shares of common stock, par value $0.01 per share, of Clarient, Inc. and its wholly-owned subsidiary Clarient Diagnostics Services, Inc. (Clarient) for (i)cash consideration of $80.0 million, (ii) 15,000,000 shares of NeoGenomics common stock, par value $0.001 per share (the NEO Common Shares), and (c) 14,666,6 67 shares of NeoGenomics Series A convertible preferred stock, par value $0.001 per share (the NEO Preferred Shares, and together with the NEO Common Shares, the NEO Shares), as such number of shares may be adjusted as described in the Purchase Agreement (the Transaction).

NeoGenomics has the right to increase the amount of the cash portion of the purchase price by up to $110.0 million by delivering notice to GE Medical not later than two business days prior to the closing date of the Transaction. Any such increase in the cash consideration will result in a corresponding reduction in the number of shares of Series A Preferred Stock to be issued as consideration by an amount calculated by dividing the amount of any such increase in the cash consideration by $7.50, which is the initial conversion price and liquidation preference of the Series A Preferred Stock. The cash to be paid at the closing of the Transaction will be adjusted to account for any increase in the cash portion of the purchase price as discussed in the preceding sentence, estimated differences in working capital at the closing of the Transaction compared to the target working capital of $27.0 million, certain indebtedness of Clarient, and cash and cash equivalents of Clarient. It is anticipated that GE Medical and Clarient will satisfy all indebtedness of Clarient and distribute all of Clarients cash to GE Medical immediately prior to closing. The NEO Common Shares would represent 19.8% of NeoGenomics post-closing issued and outstanding shares of common stock, and the NEO Shares would represent 32.9% of NeoGenomics post-closing voting power, in each case based on 60,608,614 shares of common stock and no shares of preferred stock issued and outstanding as of October 15, 2015.

The closing of the Transaction is subject to various customary closing conditions, including, among others, (1)approval by NeoGenomics stockholders of the issuance of the NEO Shares, the approval of amendments to the NeoGenomics Articles of Incorporation to increase the number of authorized shares of common stock and preferred stock, and the approval of the Transaction, (2)the absence of any order of any governmental authority that prohibits or materially restrains the Transaction and the absence of any proceeding brought by any government authority pending before any court of competent jurisdiction seeking such an order, (3)all (a)required approvals must have been obtained, (b)required notices must have been made and (c)waiting periods imposed by any government authority necessary for the consummation of the transactions must have expired or been terminated, (4)the size of the NeoGenomics Board of Directors must be 10 directors as of the closing, and there must be at least one vacancy on the Board as of the closing such that GE Medicals nominee to the Board may be considered and appointed as set forth in the Investor Board Rights, Lockup and Standstill Agreement (as described below), (5)the NEO Common Shares to be issued to GE Medical and the shares of common stock issuable upon conversion of the NEO Preferred Shares must have been approved for listing subject to notice of issuance on the NASDAQ Capital Market; and (6)the certificate of designations authorizing the NEO Preferred Shares must have been duly and validly filed with the applicable government authority.

The Purchase Agreement contains customary representations and warranties made by each of NeoGenomics, NeoGenomics Laboratories and GE Medical.The parties have also agreed to various covenants in the Purchase Agreement, including, among other things, covenants (a)to conduct their respective operations in the ordinary course of business consistent with past practice from the date of the Purchase Agreement until the closing of the Transaction, (b)restricting, subject to certain limitations, NeoGenomics ability to solicit or enter into certain alternative transactions prior to closing, and (c)to use reasonable best efforts to cause their respective closing conditions to be met as promptly as practicable.

In addition, pursuant to the terms of the Purchase Agreement, the Board will be increased from eight to ten directors. One of the vacancies created by such increase will be filled by a director recommended by GE Medical for approval by the Nominating and Corporate Governance Committee of the Board pursuant to the Investor Board Rights, Lockup and Standstill Agreement.

The Purchase Agreement contains certain termination rights for both NeoGenomics and GE Medical and further provides that we must pay to GE Medical certain termination fees upon termination of the Purchase Agreement under the following circumstances:

In the event the Purchase Agreement is terminated by NeoGenomics or GE Medical as a result of (a) the closing of the Transaction not being completed by July 20, 2016 (the Outside Date) or (b) the issuance of a final, non-appealable order of any governmental authority pursuant to antitrust laws permanently restraining or prohibiting the closing, then NeoGenomics is obligated to pay GE Medical $15.0 million; provided that, (1) in the case of the preceding clause (a) only, at the time of such termination, the closing conditions relating to obtaining required approvals, providing required notices and expiration or termination of waiting periods imposed by any governmental authority shall not have been satisfied and (2) in the case of clause (b) only, GE Medical shall not be entitled to such payment if GE Medical is then in material breach of certain of its obligations relating to obtaining regulatory and other authorizations and consents.

In the event the Purchase Agreement is terminated by GE Medical as a result of the failure of NeoGenomics or NeoGenomics Laboratories to obtain proceeds pursuant to the commitment letters for the Credit Facilities (as defined and described below) sufficient to fund the cash consideration and all other fees and expenses as may be necessary to consummate the transactions contemplated by the Purchase Agreement when all of NeoGenomics conditions to closing (other than conditions which are to be satisfied by actions taken at the closing) have been satisfied, NeoGenomics is obligated to pay GE Medical $15.0 million.

In the event the Purchase Agreement is terminated by GE Medical or NeoGenomics as a result of the failure of the NeoGenomics stockholders to approve the issuance of the NEO Shares or the amendments to the NeoGenomics Articles of Incorporation to increase the number of authorized shares of common stock and preferred stock, NeoGenomics is obligated to pay GE Medical $3.0 million.

In the event the Purchase Agreement is terminated by GE Medical as a result of the occurrence of a Triggering Event (as defined in the Purchase Agreement), NeoGenomics is obligated to pay GE Medical $15.0 million.

In the event the Purchase Agreement is terminated:

by GE Medical as a result of the breach by NeoGenomics of any of its representations or warranties or a failure by NeoGenomics to comply with any covenant or agreement that would cause the closing condition relating to truth of representations and performance of covenants not to be satisfied, and such closing condition is incapable of being satisfied by the Outside Date; or

by GE Medical or NeoGenomics as a result of a failure to close by the Outside Date and the closing conditions relating to receipt of required approvals, the making of required notices and the expiration or termination of waiting periods imposed by any government authority have been satisfied; or

by GE Medical or NeoGenomics as a result of the failure of the NeoGenomics stockholders to approve the issuance of the NEO Shares or the amendments to the NeoGenomics Articles of Incorporation to increase the number of authorized shares of common stock and preferred stock;

and

a Parent Acquisition Proposal (as defined in the...


More