Item 1.01 Entry into a Material Definitive Agreement
On February 22, 2021, Beam Therapeutics Inc. (“Beam”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among Beam, Galileo Merger Sub I, Inc., a Delaware corporation, and a wholly-owned direct subsidiary of Beam (“Merger Sub”), Galileo Merger Sub II, LLC, a Delaware limited liability company, and a wholly-owned direct subsidiary of Beam (“Merger Sub II”), Guide Therapeutics, Inc., a Delaware corporation (“Guide”), each Company Holder (as defined therein) signatory thereto (solely for purposes of Section 2.12 thereof), and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as the Shareholders’ Representative (as defined therein). On February 23, 2021, pursuant to the Merger Agreement, Merger Sub merged with and into Guide, with Guide surviving as a wholly-owned direct subsidiary of Beam (the “Surviving Corporation”) (the “Merger”) and, immediately following the Merger, the Surviving Corporation merged with and into Merger Sub II, with Merger Sub II surviving as a wholly-owned direct subsidiary of Beam (the “Surviving LLC”) (the “Subsequent Merger” and, together with the Merger, the “Mergers”). Following the Subsequent Merger, the Surviving LLC was named Guide Therapeutics, LLC.
Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Beam will pay Guide’s former stockholders and optionholders upfront consideration in an aggregate amount of $120.0 million, excluding customary purchase price adjustments, in shares of Beam common stock, par value $0.01 (“Common Stock”), based upon the volume-weighted average price of the Common Stock over the ten trading day period ending on February 19, 2021 (the “Closing Stock Consideration”). In addition to the Closing Stock Consideration, Guide’s former stockholders and optionholders will be eligible to receive up to an additional $100.0 million in technology and $220.0 million in product success milestone payments, payable in Beam Common Stock valued using the volume-weighted average price of Common Stock over the ten trading day period ending two trading days prior to the date on which the applicable milestone is achieved (the “Milestone Stock Consideration”).
Beam will file a resale registration statement with the Securities and Exchange Commission (the “SEC”) by April 1, 2021 to register the resale of the Closing Stock Consideration. As set forth in the Merger Agreement, if Beam fails to comply with certain obligations with respect to the filing of such registration statement, Beam would be obligated to pay liquidated damages to Guide’s former stockholders and optionholders in an aggregate amount equal to 1% of the value of the Closing Stock Consideration.
The Beam board of directors unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby are fair to, and in the best interests of, Beam and its stockholders and (ii) approved, declared advisable and adopted the Merger Agreement.
The foregoing summary of the principal terms of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the complete copy of the Merger Agreement, a copy of which will be filed with the SEC as an exhibit to Beam’s Annual Report on Form 10-K for the year ending December 31, 2020. The assertions embodied in the representations and warranties included in the Merger Agreement were made solely for purposes of the contract among Beam, Merger Sub, Merger Sub II and Guide, and are subject to important qualifications and limitations agreed to by Beam, Merger Sub, Merger Sub II and Guide in connection with the negotiated terms, including being qualified by confidential disclosures made by each contracting party to the other for the purposes of allocating contractual risk between them that differ from those applicable to investors. Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different from those generally applicable to Beam’s SEC filings or may have been used for purposes of allocating risk among the Beam, Merger Sub, Merger Sub II and Guide rather than establishing matters as facts. Investors should not rely on the representations and warranties or any description of them as characterizations of the actual state of facts of the Beam, Merger Sub, Merger Sub II and Guide or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, and this subsequent information may or may not be fully reflected in public disclosures by Beam or Guide.
Item 3.02 Unregistered Sales of Equity Securities.
To the extent required by Item 3.02 of Form 8-K, the information regarding the Closing Stock Consideration and Milestone Stock Consideration set forth under Item 1.01 of this Form 8-K is incorporated by reference in this Item 3.02. Beam will issue the Closing Stock Consideration and Milestone Stock Consideration in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended (the
