Item 8.01 Other Events.
On March 14, 2023, Celularity Inc., or Celularity, filed a petition, or the
Petition, in the Court of Chancery of the State of Delaware, or the Chancery
Court, under Section 205 of the Delaware General Corporation Law, or the DGCL,
to resolve potential uncertainty with respect to Celularity's authorized share
capital. Such uncertainty was introduced by a recent holding in Garfield v.
Boxed, Inc., 2022 WL 17959766 (Del. Ch. Dec. 27, 2022) that potentially affects
Celularity and many other similarly situated companies that became publicly
traded through a special purpose acquisition vehicle, or SPAC. Out of an
abundance of caution, Celularity has elected to pursue the remedial actions
described below. Concurrently with the filing of the Petition, Celularity filed
a motion to expedite the hearing on the Petition, which was subsequently granted
on March 15, 2023, as described below.
Background
On July 14, 2021, GX Acquisition Corp., or the Pre-Merger Company, the SPAC
predecessor to Celularity, held a special meeting of stockholders to approve
certain matters related to the business combination between the Pre-Merger
Company and Celularity Operations, Inc., or Legacy Celularity. Among the
proposals presented to the Pre-Merger Company stockholders included proposals to
adopt a certificate of amendment to the Pre-Merger Company's amended and
restated certificate of incorporation, or the Pre-Merger Charter, to increase
the number of authorized shares of its Class A common stock from 110,000,000 to
730,000,000, or the Authorized Share Amendment. The Authorized Share Amendment
received approval from the holders of a majority of the Pre-Merger Company's
outstanding shares of Class A common stock and Class B common stock, voting
together as a single class, that were outstanding as of the record date for such
special meeting. Following the special meeting, the Pre-Merger Company and
Legacy Celularity closed the business combination, the Pre-Merger Company
changed its name to "Celularity Inc." and the Pre-Merger Charter, as amended to
give effect to the Authorized Share Amendment, became effective.
As noted above, the recent ruling by the Chancery Court in the Boxed case
introduces uncertainty as to whether Section 242(b)(2) of the DGCL would have
required the Authorized Share Amendment to be approved by separate votes of the
majority of the Pre-Merger Company's then-outstanding shares of Class A common
stock and the Class B Elimination Amendment to be approved by a separate vote of
the majority of the Pre-Merger Company's then-outstanding shares of Class B
common stock. In light of this recent ruling, and to resolve potential
uncertainty with respect to Celularity's Second Amended and Restated Certificate
of Incorporation, or the Charter and authorized share capital, on March 14,
2023, Celularity filed the Petition in the Chancery Court under Section 205 of
the DGCL to seek validation of the Authorized Share Amendment and Charter and
the shares and other securities issued in reliance on the effectiveness of the
Authorized Share Amendment and Charter, or the Section 205 Proceeding. Section
205 of the DGCL permits the Chancery Court, in its discretion, to validate
potentially defective corporate acts.
Hearing Date
On March 15, 2023, the Chancery Court granted Celularity's motion for expedited
proceedings in the Section 205 Proceeding and set a hearing date for the
Petition to be heard. The hearing has been sent for March 29, 2023, at 12:00
p.m. Eastern Time, at the Leonard L. Williams Justice Center, 500 North King
Street, Wilmington, Delaware 19801. As ordered by the Chancery Court, Celularity
is filing the Petition with this Current Report on Form 8-K, a copy of which is
attached hereto as Exhibit 99.1. This Current Report on Form 8-K constitutes
notice of the hearing. If any stockholder of Celularity wishes to express a
position on the Petition, such stockholder of Celularity may (i) appear at the
hearing or (ii) file a written submission with the Register in Chancery, Leonard
L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801,
referring to the case caption, In re Celularity Inc., C.A. No. 2023-0317-LWW
(Del. Ch.), in advance of the hearing. Any such written submission should also
be emailed to Celularity's counsel, Kevin M. Gallagher of Richards, Layton &
Finger, P.A., at Gallagher@RLF.com.
If Celularity is not successful in the Section 205 Proceeding, the uncertainty
with respect to Celularity's authorized capitalization resulting from the
Chancery Court's ruling in Boxed referenced above could have a material adverse
impact on Celularity, including on Celularity's ability to complete financing
transactions or issue stock-based compensation to its employees, directors and
officers, until the underlying issues are definitively resolved. This
uncertainty could impair Celularity's ability to execute its business plan,
attract and retain employees, management and directors, and adversely affect its
commercial relationships.
Forward-Looking Statements
Certain statements in this Current Report on Form 8-K constitute
"forward-looking statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Statements contained in this Form 8-K that are
not historical facts are forward-looking statements and include, for example,
statements with respect the pending Section 205 proceeding referenced above and
the potential material adverse impact on Celularity. Such forward-looking
statements involve known and unknown risks and uncertainties, and its actual
results could differ materially from future results expressed or implied in
these forward-looking statements. The forward-looking statements included in
this Current Report on Form 8-K are based on its current beliefs and
expectations of its management as of the date of this Current Report. These
statements are not guarantees or indicative of future performance. Important
assumptions and other
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important factors that could cause actual results to differ materially from
those forward looking statements include, but are not limited to, Celularity's
ability to obtain the requested relief in the Section 205 proceeding and those
additional risks, uncertainties and factors described in more detail under the
caption "Risk Factors" in its Annual Report on Form 10-K for the year ended
December 31, 2021, as amended, and in its other subsequent filings with the
Securities and Exchange Commission. Celularity does not intend, and, except as
required by law, it undertakes no obligation, to update any of its
forward-looking statements after the issuance of this Current Report on Form 8-K
to reflect any future events or circumstances. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
99.1 Form of DGCL Section 205 petition filed with the Chancery Court on March
14, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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