UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): February 26,
2021
CANCER
GENETICS, INC.
(Exact
Name of Company as Specified in its Charter)
|
Delaware |
|
001-35817 |
|
04-3462475 |
|
(State
or Other Jurisdiction
of
Incorporation)
|
|
(Commission
File
Number)
|
|
(IRS
Employer
Identification
No.)
|
201
Route 17 North 2nd Floor, Rutherford, New Jersey
07070
(Address
of Principal Executive Offices) (Zip Code)
Company’s
telephone number, including area code (201)
528-9200
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Company under
any of the following provisions (see General Instruction
A.2. below):
|
[X] |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425) |
| |
|
| [ ] |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
| |
|
| [ ] |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
| |
|
| [ ] |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)) |
Indicate
by check mark whether the Company is an emerging growth company as
defined by Rule 405 of the Securities Act of 1933 (17 §230.405) or
Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR
§240.12b-2).
Emerging
growth company [ ]
If an
emerging growth company, indicate by check mark if the Company has
elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
[ ]
Securities
registered pursuant to Section 12(b) of the Act:
|
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common
Stock |
|
CGIX |
|
The
Nasdaq Capital Market |
Item
1.01 Entry into a Material Definitive Agreement.
Merger Agreement Amendment
On
February 26, 2021, Cancer Genetics, Inc. (the “Company” or “CGI”)
entered into Amendment No. 2 to Agreement and Plan of Merger and
Reorganization (the “Amendment”) with StemoniX, Inc. (“StemoniX”)
and CGI Acquisition, Inc., a wholly owned subsidiary of CGI
(“Merger Sub”), which amends the Agreement and Plan of Merger and
Reorganization dated August 21, 2020, as previously amended on
February 8, 2021 (the “Original Merger Agreement” and, as amended
by the Amendment, the “Merger Agreement”) whereby Merger Sub will
be merged with and into StemoniX, with StemoniX surviving the
merger as a wholly-owned subsidiary of CGI (the “Merger”). The
Original Merger Agreement, prior to its amendment on February 8,
2021, had conditions that included (A) that the Company shall have
consummated a financing transaction (the “Private Placement”) no
later than the closing of the Merger resulting in aggregate gross
proceeds of $10 million (or such other amount as the Company and
StemoniX agree), which condition (the “Financing Condition”) was
amended on February 8, 2021 to only require that StemoniX have sold
an aggregate of $5 million of its Series C Preferred Stock (as
defined below) prior to the closing of the Merger, and (B) that the
shares of common stock of CGI (the “Common Stock”) (or Common Stock
underlying other securities of CGI) being issued in the Merger
shall have been approved for listing on the Nasdaq Stock Market
(“Nasdaq”).
As
previously reported, on February 16, 2021, CGI consummated a
registered direct offering of its common stock with certain
institutional investors pursuant to which the Company issued to the
investors an aggregate of 2,777,778 shares of the Company’s common
stock at an offering price of $6.30 per share for gross proceeds of
approximately $17.5 million (the “CGI RD Financing”). The net
proceeds to the Company from the CGI RD Financing were
approximately $15.8 million, after deducting placement agent fees
and expenses and estimated offering expenses payable by the
Company.
CGI
and StemoniX have confirmed in the Amendment that the CGI RD
Financing is to be treated as part of the “Private Placement” under
the Merger Agreement, such that any securities to be issued therein
will be deemed to be outside of, and not considered in computing
the number of securities of CGI to be issued with respect, to the
existing 78/22% ratio, and so will dilute the historic holders of
CGI and StemoniX securities ratably. In addition, the cash raised
in the CGI RD Financing will not be included in either company’s
Net Cash (as defined in the Merger Agreement) in determining any
adjustments required to such ratio. The parties also agreed that
any condition of the Merger Agreement requiring either party to
raise additional cash prior to closing shall be deemed satisfied
other than if required to satisfy Nasdaq initial listing
requirements of the post-merger company, and that StemoniX will not
issue nor commit to issue any further securities without the
consent of CGI (other than under its option plan, upon conversion
of already outstanding convertible securities, or as otherwise
permitted under the Merger Agreement, including additional
Convertible Notes (as defined below) provided for in the Merger
Agreement and the up to $2 million of Series C Preferred Stock that
is the subject of a binding purchase agreement as of the date
hereof).
The
foregoing description of the Amendment does not purport to be
complete and is qualified in its entirety by the full text of the
Amendment, a copy of which is filed as Exhibit 2.1 hereto and is
incorporated by reference herein.
Item
8.01 Other Events.
StemoniX Series C Preferred Stock and Convertible
Notes
As
previously reported, on January 28, 2021, StemoniX entered into a
stock purchase agreement (the “Series C Preferred Stock Purchase
Agreement”) with two institutional accredited investors pursuant to
which StemoniX agreed to issue shares of its Series C Convertible
Preferred Stock (the “Series C Preferred Stock”) for an aggregate
purchase price of $5 million. Also as previously reported, one of
those investors determined thereafter to acquire $3 million of
StemoniX Convertible Notes (“Convertible Notes”) in lieu of
acquiring the same amount of Series C Preferred Stock.
The
offering by StemoniX of its Series C Preferred Stock was originally
intended to partially satisfy the Financing Condition and be part
of the Private Placement. On February 18, 2021, StemoniX and the
remaining investor committed to issuing and purchasing,
respectively, $2 million of Series C Preferred Stock and, in light
of the consummation of the CGI RD Financing, amended and restated
the Series C Preferred Stock Purchase Agreement to provide that
only $2 million of Series C Preferred Stock would be issued in the
aggregate. Accordingly, the Amendment provides that the investor
will not have the right to appoint a board observer on the board of
the post-merger company, as had been contemplated in the Merger
Agreement if $5 million of Series C Preferred Stock had been
sold.
As
described above and reported in the Company’s Registration
Statement on Form S-4, as amended on February 8, 2021, and declared
effective by the SEC on February 12, 2021 (Registration No.
333-249513), an institutional investor agreed to purchase an
aggregate of approximately $3 million of Convertible Notes and
related warrants to purchase StemoniX common stock from StemoniX,
which purchase was consummated on February 23, 2021.
Extension Granted by Nasdaq
On
February 18, 2021, the Listing Qualifications Staff at the Nasdaq
Stock Market (“Nasdaq”) granted CGI an extension to regain
compliance from its previously reported deficiency of not having
held an annual stockholder meeting in 2020, under Nasdaq Rule
5810(c)(2)(G). The extension provides that CGI has until June 29,
2021 to either (i) complete the Merger and receive approval for
trading of the post-merger company’s securities on Nasdaq or (ii)
hold an annual meeting of CGI’s stockholders.
Additional
Information about the Proposed Merger and Where to Find
It
In
connection with the proposed merger between CGI and StemoniX, CGI
has filed relevant materials with the SEC, including a registration
statement on Form S-4, as amended, that contains a proxy
statement/prospectus/information statement. INVESTORS AND SECURITY
HOLDERS OF CGI AND STEMONIX ARE URGED TO READ THESE MATERIALS (AS
WELL AS AMENDMENTS AND SUPPLEMENTS THERETO AND ANY DOCUMENTS
INCORPORATED BY REFERENCE THEREIN) WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CGI, STEMONIX
AND THE PROPOSED MERGER. The proxy statement/prospectus/information
statement and other relevant materials (when they become
available), and any other documents filed by CGI with the SEC, may
be obtained free of charge at the SEC website at www.sec.gov. In
addition, investors and security holders may obtain free copies of
the documents filed with the SEC by CGI by directing a written
request to: Cancer Genetics, Inc., c/o John A. Roberts, Chief
Executive Officer, 201 Route 17 North 2nd Floor, Rutherford, NJ
07070. Investors and security holders are urged to read the
Registration Statement and the other relevant materials when they
become available before making any voting or investment decision
with respect to the proposed merger.
This
report shall not constitute an offer to sell or the solicitation of
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
in connection with the proposed merger shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Participants
in the Solicitation
CGI
and its directors and executive officers and StemoniX and its
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of CGI in
connection with the proposed transaction under the rules of the
SEC. Information about the directors and executive officers of CGI
and their ownership of shares of CGI’s common stock is set forth in
its Annual Report on Form 10-K for the year ended December 31,
2019, which was filed with the SEC on May 29, 2020, and in
subsequent documents filed and to be filed with the SEC, including
the Registration Statement referred to above. Additional
information regarding the persons who may be deemed participants in
the proxy solicitations and a description of their direct and
indirect interests in the proposed merger, by security holdings or
otherwise, are included in the Registration Statement and other
relevant materials to be filed with the SEC when they become
available. These documents are available free of charge at the SEC
web site (www.sec.gov) and from the Chief Executive Officer at CGI
at the address described above.
Forward-Looking
Statements
This
report contains “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995. CGI and
StemoniX generally identify forward-looking statements by
terminology such as “may,” “should,” “expects,” “plans,”
“anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential” or
“continue” or the negative of these terms or other similar words.
These statements are only predictions. CGI and StemoniX have based
these forward-looking statements largely on their then-current
expectations and projections about future events and financial
trends as well as the beliefs and assumptions of management.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which involve factors or circumstances that
are beyond each of CGI’s and StemoniX’s control. CGI’s and
StemoniX’s actual results could differ materially from those stated
or implied in forward-looking statements due to a number of
factors, including but not limited to: (i) risks associated with
CGI’s and StemoniX’s ability to obtain the approval of Nasdaq for
continued listing and listing after the merger, and the shareholder
approvals required to consummate the proposed merger transaction
and the timing of the closing of the proposed merger transaction,
including the risks that a condition to closing would not be
satisfied within the expected timeframe or at all or that the
closing of the proposed merger transaction will not occur; (ii) the
outcome of any legal proceedings that may be instituted against the
parties and others related to the Merger Agreement relating to the
merger; (iii) the occurrence of any event, change or other
circumstance or condition that could give rise to the termination
of the Merger Agreement, (iv) unanticipated difficulties or
expenditures relating to the proposed merger transaction, the
response of business partners and competitors to the announcement
of the proposed merger transaction, and/or potential difficulties
in employee retention as a result of the announcement and pendency
of the proposed merger transaction; (v) volatility and uncertainty
in the financial markets and general economic conditions, which
could have an adverse impact on CGI and/or StemoniX, and (vi) those
risks detailed in CGI’s most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q, and its registration statement on
Form S-4, as amended, and subsequent reports filed with the SEC, as
well as other documents that may be filed by CGI from time to time
with the SEC. Accordingly, you should not rely upon forward-looking
statements as predictions of future events. Neither CGI nor
StemoniX can assure you that the events and circumstances reflected
in the forward-looking statements will be achieved or occur, and
actual results could differ materially from those projected in the
forward-looking statements. The forward-looking statements made in
this communication relate only to events as of the date on which
the statements are made. Except as required by applicable law or
regulation, CGI and StemoniX undertake no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which the statement is made or to reflect the
occurrence of unanticipated events.
Item
9.01 Financial Statements and Exhibits.
#
Schedules and exhibits have been omitted pursuant to Item 601(b)(2)
of Regulation S-K. CGI hereby undertakes to furnish supplemental
copies of any of the omitted schedules upon request by the
SEC.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
| |
Cancer
Genetics, Inc. |
| February
26, 2021 |
|
|
|
By: |
/s/
John A. Roberts |
| |
Name: |
John
A. Roberts |
| |
Title: |
President
and Chief Executive Officer |
