Item 1.01. Entry into a Material Definitive Agreement.
On August 31, 2022, Interpace Biosciences, Inc. (the "Company"), Interpace
Pharma Solutions, Inc. (the "Subsidiary", and together with the Company,
"Interpace") entered into an Asset Purchase Agreement (the "Purchase Agreement")
with Flagship Biosciences, Inc. (the "Purchaser") pursuant to which the
Purchaser agreed to (i) acquire substantially all of the assets of the
Subsidiary used in Subsidiary's business of complex molecular analysis for the
early diagnosis and treatment of cancer and supporting the development of
targeted therapeutics (the "Business") and (ii) assume and pay certain
liabilities related to the purchased assets as set forth in the Purchase
Agreement (collectively, the "Transaction"). The Transaction closed on August
31, 2022.
As consideration for the Transaction, under the Purchase Agreement, Interpace
received a total purchase price of approximately $7,000,000 ($500,000 of which
has been deposited into escrow), subject to a potential post-closing working
capital adjustment, and the assumption by the Purchaser of certain specified
liabilities. In addition, subject to the terms and conditions set forth in the
Purchase Agreement, Purchaser will pay the Subsidiary an earnout of up to
$2,000,000 based on revenue for the period beginning September 1, 2021 and
ending August 31, 2022.
The Purchase Agreement includes a one-year commitment of Interpace not to
compete with the Business, recruit or hire any former employees of the
Subsidiary who accept employment with the Purchaser in connection with the
Transaction, or divert or attempt to divert from Purchaser any business to be
performed from any of the contracts or agreements with customers as set forth in
the Purchase Agreement. The Purchase Agreement also contains customary
representations and warranties, post-closing covenants and mutual
indemnification obligations for, among other things, any inaccuracy or breach of
any representation or warranty and any breach or non-fulfillment of any
covenant.
In connection with the Transaction, on August 31, 2022, Interpace and Purchaser
entered into a Shared Services Agreement (the "Shared Services Agreement")
pursuant to which Interpace agreed to provide, or cause its affiliates to
provide, to the Purchaser certain services set forth in the Shared Services
Agreement on a transitional basis and subject to the terms and conditions set
forth in the Shared Services Agreement (the "Services"). As consideration for
the Services provided by Interpace, Purchaser will pay Interpace the amounts
specified for each Service as set forth in the Shared Services Agreement.
Interpace's obligations to provide the Services will terminate with respect to
each Service as set forth in the Shared Services Agreement.
The Purchaser has disclosed that an affiliate of Ampersand Management LLC
("Ampersand") and an affiliate of BroadOak Capital Partners ("BroadOak") have
each provided equity financing to the Purchaser, collectively own a majority of
the Purchaser's outstanding equity securities and are represented on its Board
of Directors. The affiliate of Ampersand also owns 28,000 shares of the
Company's Series B Preferred Stock, convertible into 4,666,666 shares of the
Company's common stock, par value $0.01 per share, pursuant to that certain
Securities Purchase and Exchange Agreement dated January 10, 2020. The affiliate
of Ampersand has designated two directors to the Company's Board of Directors,
Robert Gorman and Vijay Aggarwal. In addition, an affiliate of BroadOak provided
the Company a term loan in the aggregate principal amount of $8,000,000 pursuant
to that certain Loan and Security Agreement dated October 29, 2021 and a
Convertible Note which converted into a term loan advance in the aggregate
amount of $2,000,000. The total purchase price for the Transaction was
determined following a sales process conducted by the Company and its advisors
and an arms length negotiation between Purchaser and the Company. The purchase
price was based on a market consistent multiple of anticipated revenue for a
non-profitable, cash-negative business. The Transaction was approved by a
majority of the disinterested directors of the Company.
The foregoing descriptions of the Purchase Agreement and the Shared Services
Agreement do not purport to be complete and are qualified in their entirety by
reference to the full text of the Purchase Agreement and the Shared Services
Agreement, which are filed herewith as Exhibits 2.1 and 10.1, respectively, and
are incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information contained in Item 1.01 above is incorporated herein by
reference.
Item 7.01. Regulation FD Disclosure.
On August 31, 2022, the Company issued a press release announcing the
Transaction. A copy of the press release is furnished as Exhibit 99.1 to this
Current Report on Form 8-K.
The information furnished pursuant to this Item 7.01, including Exhibit 99.1,
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities under that Section and shall not be deemed to be incorporated by
reference into any filing of the Company under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(b) Proforma Financial Information.
The Company's unaudited proforma consolidated statements of operations for the
year ended December 31, 2021 and the six months ended June 30, 2022, the
unaudited proforma consolidated balance sheet as of June 30, 2022, and the notes
related thereto, are filed as Exhibit 99.2 to this Current Report on Form 8-K
and incorporated herein by reference.
(d) Exhibits.
Exhibit
Number Description
2.1* Asset Purchase Agreement, dated August 31, 2022 by and among
Interpace Biosciences, Inc., Interpace Pharma Solutions, Inc. and
Flagship Biosciences, Inc.
10.1* Shared Services Agreement, dated August 31, 2022 by and among
Interpace Biosciences, Inc., Interpace Pharma Solutions, Inc. and
Flagship Biosciences, Inc.
99.1 Press Release, dated August 31, 2022.
99.2 The unaudited proforma consolidated statements of operations for
the year ended December 31, 2021 and the six months ended June 30,
2022, the unaudited proforma consolidated balance sheet as of June
30, 2022, and the notes related thereto.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* The schedules and exhibits to this Exhibit have been omitted. The Company
agrees to furnish a copy of the omitted schedules and exhibits to the
Securities and Exchange Commission on a supplemental basis upon its request.
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