AKOUOS Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
Pursuant to the Merger Agreement, and upon the terms and subject to the
conditions thereof, Purchaser will commence a tender offer (the "Offer") to
purchase all of the issued and outstanding shares (the "Shares") of common
stock, par value
Following the consummation of the Offer, and subject to the terms and conditions
of the Merger Agreement, Purchaser will merge with and into the Company as
provided in the Merger Agreement (the "Merger"), with the Company being the
surviving corporation. The Merger Agreement contemplates that the Merger will be
effected pursuant to Section 251(h) of the General Corporation Law of the
The obligation of Parent and Purchaser to consummate the Offer is subject to the condition that there be validly tendered and not validly withdrawn prior to the expiration of the Offer a number of Shares that, together with the number of Shares, if any, then owned beneficially by Parent and Purchaser (together with their wholly owned subsidiaries) would represent a majority of the Shares outstanding as of the consummation of the Offer (the "Minimum Tender Condition"). The Minimum Tender Condition may not be waived by Purchaser without the prior written consent of the Company. The obligation of Purchaser to consummate the Offer is also subject to other customary conditions, including the expiration of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the absence of governmental injunctions or other legal restraints prohibiting the Merger or the Offer. In addition, the obligation of Purchaser to consummate the Offer is conditioned upon, among other things, the accuracy of the representations and warranties of the Company (subject to certain materiality exceptions), and material compliance by the Company with its covenants under the Merger Agreement. Consummation of the Offer is not subject to a financing condition.
The Merger Agreement provides for the following treatment of the Company's equity awards:
? at the Effective Time, each option to purchase Shares having an exercise price
less than the Cash Consideration (each such option, a "Company Cash-Out Stock
Option") that is outstanding immediately prior to the Effective Time, whether
or not vested, shall be canceled and converted into the right to receive (x) an
amount in cash, without interest and less any applicable tax withholdings,
equal to the product of (A) the total number of Shares subject to such Company
Cash-Out Stock Option immediately prior to the Effective Time multiplied by
(B) the excess, if any, of the Cash Consideration over the applicable exercise
price per share under such Company Cash-Out Stock Option and (y) one CVR for
each share of Common Stock subject to such Company Cash-Out Stock Option
immediately prior to the Effective Time (without regard to vesting);
? effective as of five business days prior to the date on which the closing of
the Merger occurs (the "Closing Date"), or such other date (in no event later
than two business days prior to the Closing Date) occurring prior to the
Closing Date as may be determined by the board of directors of the Company (the
"Company Board") in its reasonable discretion (such date, the "Acceleration
Date"), each then-outstanding and unexercised option to purchase Shares having
an exercise price equal to or greater than the Cash Consideration (each such
option, a "Company Exercisable Pre-Close Stock Option" and, together with the
Company Cash-Out Stock Options, the "Company Stock Options") shall vest in full
and become exercisable up to and through the close of regular trading on the
Nasdaq on the second business day following the Acceleration Date (such second
Business Day, the "Last Exercise Date") in accordance with the terms and
conditions of such Company Exercisable Pre-Close Stock Option in effect on the
date of the Merger Agreement, and such Company Exercisable
Options shall terminate and be of no further force or effect as of immediately
prior to closing of the Merger if not exercised by the holder on or prior to
the close of regular trading on the Last Exercise Date; and
? at the Effective Time, each Share of Company Restricted Stock that is
outstanding immediately prior to the Effective Time will vest in full as of
immediately prior to the Effective Time and will be treated in the same manner
as all other Shares of Common Stock.
The Merger Agreement includes customary representations, warranties and covenants of the Company, Parent and Purchaser. The Company has agreed, among other things, to use commercially reasonable efforts to operate its business in the ordinary course until the time at which the Purchaser irrevocably accepts for purchase all Shares validly tendered (and not validly withdrawn) pursuant to the Offer (the "Acceptance Time") and not to engage in specified types of transactions during such period. The Company has also agreed to customary non-solicitation restrictions, including not to solicit, facilitate or engage in discussions with third parties regarding other proposals for alternative business combination transactions involving the Company or change the recommendation of the Company Board to the Company's stockholders regarding the Offer, in each case, except as otherwise permitted by the Merger Agreement, including to enter into an alternative transaction that constitutes a Superior Proposal (as defined in the Merger Agreement) in compliance with the Company Board's fiduciary duties under applicable law and subject to payment of a termination fee. Parent and Purchaser have agreed to use reasonable best efforts to take actions that may be required in order to obtain antitrust approval of the proposed transaction, subject to certain limitations.
The Merger Agreement also includes customary termination provisions for both the
Company and Parent, including, among others, the right of both parties to
terminate for failure to consummate the Offer on or before
The Company Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby are advisable, fair to, and in the best interests of, the Company and its stockholders, (ii) duly authorized and approved the execution and delivery of the Merger Agreement, the performance by the Company of its covenants and other obligations thereunder, and the consummation of the transactions contemplated by the Merger Agreement upon the terms and subject to the conditions set forth therein, (iii) resolved that the Merger Agreement and the transactions contemplated thereby will be governed by and effected under Section 251(h) of the DGCL and (iv) resolved to recommend that the Company's stockholders accept the Offer and tender their Shares pursuant to the Offer. . . .
Item 8.01 Other Events.
On
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Additional Information and Where to Find It
The Offer for the outstanding Shares has not yet commenced. This filing is for
informational purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell any securities, nor is it a substitute for the
Offer materials that Parent and Purchaser will file with the
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements that are
subject to risks, uncertainties and other factors that could cause actual
results to differ materially from those implied by the forward-looking
statements. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements, including all
statements regarding the intent, belief or current expectations of the Company
and members of its senior management team and can typically be identified by
words such as "believe," "expect," "estimate," "predict," "target," "potential,"
"likely," "continue," "ongoing," "could," "should," "intend," "may," "might,"
"plan," "seek," "anticipate," "project" and similar expressions, as well as
variations or negatives of these words. Forward-looking statements include,
without limitation, statements regarding: the proposed acquisition of the
Company; prospective performance, future plans, events, expectations, objectives
and opportunities and the outlook for the Company's business; potential
contingent consideration amounts and terms; the commercial success of the
Company's product candidates and ongoing clinical and preclinical development;
the anticipated timing of clinical data; the possibility of unfavorable results
from clinical trials; filings and approvals relating to the proposed acquisition
of the Company; prospective benefits of the proposed acquisition of the Company;
the expected timing of the completion of the proposed acquisition of the
Company; and the accuracy of any assumptions underlying any of the foregoing.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties and are
cautioned not to place undue reliance on these forward-looking statements.
Actual results may differ materially from those currently anticipated due to a
number of risks and uncertainties including, among others, uncertainties as to
the timing of the Offer and the completion of the proposed acquisition of the
Company; uncertainties as to how many of the Company's stockholders will tender
their Shares in the Offer; the possibility that various closing conditions for
the proposed acquisition may not be satisfied or waived, including that a
governmental entity may prohibit, delay or refuse to grant approval for the
consummation of the proposed acquisition; the occurrence of any event, change or
other circumstance that could give rise to the termination of the Merger
Agreement; the effects of the proposed acquisition (or the announcement thereof)
on the trading price of the Common Stock; relationships with associates,
customers, other business partners and key third parties, or governmental
entities; transaction costs; risks that the proposed acquisition disrupts
current plans and operations of the Company or adversely affects employee
retention; the risk that the proposed acquisition of the Company will divert
management's attention from ongoing business operations; changes in the
Company's businesses during the period between announcement and closing of the
proposed acquisition; any legal proceedings that may be instituted related to
the proposed acquisition; and other risks and uncertainties, including those
identified under the heading "Risk Factors" in the Company's most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q, each of which is filed
with the
Any forward-looking statements made by the Company in this filing speak only as of the date hereof. Factors or events that could cause actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description of Exhibit 2.1* Agreement and Plan of Merger, dated as ofOctober 17, 2022 , by and amongAkouos, Inc. , Eli Lilly and Company andKearny Acquisition Corporation . 2.2 Tender and Support Agreement, datedOctober 17, 2022 , by and among Eli Lilly and Company,Kearny Acquisition Corporation , andEmmanuel Simons . 2.3 Tender and Support Agreement, datedOctober 17, 2022 , by and among Eli Lilly and Company,Kearny Acquisition Corporation ,5AM Ventures V, L.P. , and5AM Opportunities I, L.P. 2.4 Tender and Support Agreement, datedOctober 17, 2022 , by and among Eli Lilly and Company,Kearny Acquisition Corporation ,New Enterprise Associates 16, L.P., andNEA Ventures 2018, L.P. 2.5 Form of Contingent Value Right Agreement, by and among Eli Lilly and Company,Kearny Acquisition Corporation and a rights agent selected by Eli Lilly and Company and reasonably acceptable toAkouos, Inc. 99.1 Joint Press Release, datedOctober 18, 2022 , issued byAkouos, Inc. and Eli Lilly and Company. 104 Cover Page Interactive Data File (embedded within XBRL document)
* Schedules and similar attachments have been omitted pursuant to Item
601(a)(5) of Regulation S-K.
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