Item 1.01 Entry into a Material Definitive Agreement
In connection with the closing of the Merger, Aytu entered into a Consent,
Waiver and Sixth Amendment to Facility Agreement, dated as of March 19, 2021
(the "Deerfield Consent, Waiver and Amendment"), by and among Neos as borrower,
Neos Therapeutics Brands, LLC, Neos Therapeutics, LP, Neos Therapeutics
Commercial, LLC and PharmaFab Texas, LLC, as guarantors (collectively with Neos,
the "Neos Obligors"), Deerfield Private Design Fund III L.P. and Deerfield
Partners, L.P., as lenders (the "Deerfield Lenders") and Deerfield Mgmt, L.P. as
collateral agent. Pursuant to the Deerfield Consent, Waiver and Amendment, the
Deerfield Lenders (i) consent to certain amendments to the ABL Documents (the
"ABL Amendments"), (ii) irrevocably waive defaults related to "going concern"
qualifications to Neos' financial statements and any other defaults that would
otherwise result without such waiver, (iii) irrevocably waive their right to
impose the default rate of interest as provided for in the Facility Agreement,
dated as of May 11, 2016 (the "Deerfield Facility Agreement"), by and among Neos
and Deerfield Private Design Fund III, L.P. and Deerfield Special Situations
Fund, L.P., as the lenders thereunder. Certain other modifications were made to
the Deerfield Facility Agreement to reflect the consummation of the Merger and
the status of Neos as a wholly-owned subsidiary of Aytu and (iv) join Aytu and
its subsidiaries as guarantors of the obligations owed by Neos under the
Deerfield Facility Agreement and subject Aytu and its subsidiaries to certain
restrictive covenants including limitations on the incurrence of debt, granting
of liens and transfers of assets of Aytu and its subsidiaries and (v) makes
certain other modifications to the Deerfield Facility Agreement to reflect the
consummation of the Merger and the status of Neos as a wholly-owned subsidiary
of Aytu. Such modifications also include the prepayment of $15,000,000 of the
principal of the loan plus any interest thereon that would have otherwise
accrued through May 10, 2021 under the Deerfield Facility Agreement on the date
of the consummation of the Merger (in lieu of payment of the same on May 11,
2021) and the elimination of the right of the Deerfield Lenders to convert
outstanding amounts of the loans into conversion shares and Neos' rights to make
payments to Deerfield Lenders in the form of shares of common stock.
In connection with the closing of the Merger, Aytu entered into a Consent,
Waiver and Amendment No. 1 to Loan and Security Agreement, dated as of March 19,
2021 (the "Encina Consent, Waiver and Amendment"), by and among the Neos
Obligors and Encina Business Credit, LLC, as lender and agent (the "Encina
Lender"). Pursuant to the Encina Consent, Waiver and Amendment, the Encina
Lender (i) consents to the change in control of Neos that will result from the
consummation of the Merger, (ii) consents, on the date of the consummation of
the Merger, to the prepayment of $15,000,000 of the principal of the loan under
the Deerfield Facility Agreement plus any interest thereon that would have
otherwise accrued through May 10, 2021 under the Deerfield Facility Agreement,
. . .
Item 2.01. Completion of Acquisition or Disposition of Assets
As described above in the Introductory Note to this Current Report on Form 8-K,
on March 19, 2021, Neos completed the Merger pursuant to the Merger Agreement
and became a wholly owned subsidiary of Parent. Pursuant to the Merger
Agreement, at the effective time of the Merger (the "Effective Time"), each
share of common stock, par value $0.001 per share, of the Company ("Company
Common Stock") issued and outstanding immediately prior to the Effective Time
(excluding any shares of Company Common Stock held in the treasury of the
Company or owned, directly or indirectly, by Parent or Merger Sub immediately
prior to the Effective Time) was automatically converted into the right to
receive (1) 0.1088 shares of common stock, par value $0.0001 per share, of
Parent ("Parent Common Stock") (the "Exchange Ratio") and (2) any cash in lieu
of fractional shares of Parent Common Stock. As a result of the Merger, holders
of shares of Company Common Stock immediately prior to the Effective Time will
receive approximately 5,447,000 shares of Parent Common Stock for their shares
of Company Common Stock, with the total consideration valued at approximately
$53,000,000 million, based on the closing price of the Parent Common Stock on
March 19, 2021.
Neos Stock Options
As of the Effective Time, each unvested option to acquire shares of Company
Common Stock that was outstanding as of immediately prior to the Effective Time
and that had an exercise price per share equal to or less than $0.95 was assumed
by Aytu and converted into an option to acquire shares of Parent Common Stock on
the same terms and conditions (including, but not limited to, any vesting,
acceleration or forfeiture provisions or repurchase rights) as were applicable
to such option to acquire shares of Company Common Stock immediately prior to
the Effective Time (each, an "Assumed Option"), except that the number of shares
of Parent Common Stock subject to each such Assumed Option shall be equal to
(i) the number of shares of Company Common Stock subject to the corresponding
Assumed Option immediately prior to the Effective Time multiplied by (ii) the
Exchange Ratio, rounded down, if necessary, to the nearest whole share of Parent
Common Stock, and such Assumed Option shall have an exercise price per share
(rounded up to the nearest whole cent) equal to (A) the exercise price per share
of Company Common Stock otherwise purchasable pursuant to the corresponding
Assumed Option divided by (B) the Exchange Ratio; provided, that the exercise
price, the number of shares of Parent Common Stock subject to such option and
the terms and conditions of exercise of such option shall be determined in a
manner intended to be consistent with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code") and, with respect to any
Assumed Option intended to qualify as an "incentive stock option" under
Section 422 of the Code, Section 424(a) of the Code.
Neos Restricted Stock Units
At the Effective Time, each restricted stock unit to be settled in shares of
Company Common Stock issued under the Company Equity Plans (each, a "Neos RSU")
. . .
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing
On March 19, 2021, Neos notified The Nasdaq Stock Market LLC ("Nasdaq") that the
Merger was completed, and as of open of business on March 22, 2021, trading of
the shares of Company Common Stock on Nasdaq was suspended. In addition, on
March 19, 2021, Neos requested that Nasdaq file a delisting application on Form
25 with the Securities and Exchange Commission (the "SEC") to report the
delisting of the shares of Company Common Stock from Nasdaq. Neos intends to
file a certification on Form 15 with the SEC requesting that Neos reporting
obligations under Sections 13 and 15(d) of the Securities Exchange Act of 1934,
as amended, be suspended.
Item 3.03. Material Modifications to Rights of Security Holders
The information set forth under Item 2.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5.01. Changes in Control of Registrant
As a result of the Merger, a change in control of Neos occurred, and Neos is now
a wholly owned subsidiary of Parent. The information set forth under the
Introductory Note and Items 2.01 and 5.02 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In accordance with the Merger, at the Effective Time, each of Alan Heller,
Bryant Fong, Beth Hecht, Gerald McLaughlin, James Robinson, Greg Robitaille,
John Schmid and Linda Szyper ceased serving as directors of Neos, as the
directors of Merger Sub as of immediately prior to the Effective Time became the
directors of the Company.
In addition, in accordance with the Merger, at the Effective Time, each named
executive officer of the Company listed below ceased to hold the positions
indicated beside such executive officer's name, as the officers of Merger Sub as
of immediately prior to the Effective Time became the officers of the Company:
? Gerald McLaughlin President and Chief Executive Officer
? Richard Eisenstadt Chief Financial Officer
? John Limongelli Senior Vice President, General Counsel and Corporate
Secretary
In connection with the completion of the Merger, on March 19, 2021, Parent
entered into Separation Agreements with each of Mr. McLaughlin and Mr.
Limongelli. The information set forth in the section entitled "Interests of
Neos' Directors and Officers in the Merger-Severance Entitlements" set forth in
the Company's definitive proxy statement filed with the SEC on February 9, 2021,
is incorporated by reference herein.
Item 5.03. Amendments to Certificate of Incorporation or Bylaws
In connection with the completion of the Merger, Neos' amended and restated
certificate of incorporation and amended and restated bylaws were further
amended and restated to be the same as the certificate of incorporation and the
bylaws, respectively, of Merger Sub, as in effect immediately prior to the
Effective Time. Neos' Amended and Restated Certificate of Incorporation and
Neos' Amended and Restated Bylaws are filed as Exhibit 3.1 and Exhibit 3.2,
respectively, and are incorporated herein by reference.
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Item 5.07. Submission of Matters to a Vote of Security Holders
On March 18, 2021, the Company held its special meeting of stockholders (the
"Special Meeting"). The following is a brief description of the final voting
results for each of the proposals submitted to a vote of the stockholders at the
Special Meeting.
(a) Proposal 1 - Adoption of the Merger Agreement. Stockholders approved the
proposal to adopt the Merger Agreement, pursuant to which Merger Sub will be
merged with and into Neos, with Neos surviving the Merger as a wholly-owned
subsidiary of Aytu, as follows (the "Merger Proposal"):
Votes For Votes Against Abstentions Broker Non-Votes
25,925,818 708,572 55,918 7,206,763
(b) Proposal 2 - Approval of the Reverse Stock Split. Stockholders approved the
proposal to approve the amendment to the Neos certificate of incorporation to
effect a reverse stock split of Company Common Stock, which proposal was only
applicable if the Merger Proposal was not approved by the Neos stockholders or
if the Merger was not completed for any other reason (the "Reverse Stock Split
Proposal"), as follows:
Votes For Votes Against Abstentions Broker Non-Votes
32,295,167 1,471,953 129,951 N/A
(c) Proposal 3- Consider and Vote Upon an Adjournment of the Special
Meeting. Stockholders approved the proposal to approve the adjournment or
postponement from time to time of the Special Meeting, if necessary to solicit
additional proxies if there are not sufficient votes to approve the Merger
Proposal and/or the Reverse Stock Split Proposal, as follows:
Votes For Votes Against Abstentions Broker Non-Votes
32,356,942 1,360,321 179,808 N/A
On March 22, 2021, Parent issued a press release announcing the completion of
the Merger, which was filed as Exhibit 99.1 to the Form 8-K filed by Parent on
March 22, 2021 and incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
Exhibit Description
2.1* Agreement and Plan of Merger, dated as of December 10, 2020, by and
among Neos, Parent. and Merger Sub (incorporated herein by reference to
Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with
the SEC on December 11, 2020)
3.1 Fifth Amended and Restated Certificate of Incorporation of Neos
Therapeutics, Inc.
3.2 Second Amended and Restated Bylaws of Neos Therapeutics, Inc.
10.1 Consent, Waiver and Sixth Amendment to Facility Agreement, by and
among Aytu BioScience, Inc., Neos Therapeutics, Inc., Neos Therapeutics
Brands, LLC, Neos Therapeutics, LP, Neos Therapeutics Commercial, LLC,
PharmaFab Texas, LLC, Deerfield Private Design Fund III L.P., Deerfield
Partners, L.P. and Deerfield Mgmt, L.P., dated March 19, 2021.
10.2 Consent, Waiver and Amendment No. 1 to Loan and Security Agreement,
by and among Aytu BioScience, Inc., Neos Therapeutics, Inc., Neos
Therapeutics Brands, LLC, Neos Therapeutics, LP, Neos Therapeutics
Commercial, LLC, PharmaFab Texas, and Encina Business Credit, LLC,
dated March 19, 2021.
99.1 Press Release dated March 22, 2021
* Exhibits and schedules to this Exhibit have been omitted in accordance with
Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish
supplementally a copy of all omitted exhibits and schedules to the SEC upon its
request.
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