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): March 28, 2021
CM LIFE SCIENCES II INC.
(Exact name of registrant as specified in its charter)
| Delaware | | 001-40090 | | 85-4298912 |
| (State or other jurisdiction of | | (Commission File Number) | | (I.R.S. Employer |
| incorporation) | | | | Identification No.) |
c/o Corvex Management LP
667 Madison Avenue
New York, New York | | 10065 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (212) 474-6745
Not Applicable
(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 registrant under any of the following provisions:
| þ | Written communication 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-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company þ
If an emerging growth company, indicate by check mark if the registrant 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. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On March 28, 2021, CM Life Sciences II Inc. (“CMLSII” or the “Company”) executed an Agreement and Plan of Merger (the “Merger Agreement”) with SomaLogic, Inc., a Delaware corporation (“SomaLogic”), and the other parties thereto (the transactions contemplated by the Merger Agreement, including the Merger (as defined below), the “Business Combination”). This Current Report on Form 8-K provides a summary of the Merger Agreement and the other agreements entered into and contemplated in connection with the Business Combination (such agreements, the “Transaction Agreements”). The descriptions of these agreements do not purport to be complete and are qualified in their entirety by the terms and conditions of such agreements, copies of which are attached here as Exhibits 2.1, 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6 hereto.
Merger Agreement
On March 28, 2021, CMLSII entered into the Merger Agreement with SomaLogic and S-Craft Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub”).
Business Combination
Pursuant to the terms of the Merger Agreement, CMLSII will acquire SomaLogic through the merger of Merger Sub with and into SomaLogic, with SomaLogic surviving as a wholly owned subsidiary of CMLSII (the “Merger”). In connection with the Merger, CMLSII will be renamed.
The Business Combination was approved by the boards of directors of each of CMLSII and SomaLogic.
The Business Combination is expected to close in the third quarter of 2021, following the receipt of the required approval by the stockholders of each of SomaLogic and of CMLSII and the satisfaction of certain other customary closing conditions.
Business Combination Consideration
At the effective time of the Merger (the “Effective Time”), each share of SomaLogic’s common stock, par value $0.01 per share, and preferred stock, par value $0.01 per share (collectively, the “SomaLogic Capital Sock”) issued and outstanding immediately prior to the Effective Time will be cancelled and automatically deemed, for all purposes, to represent the right to receive a portion of the total consideration, with each stockholder of SomaLogic entitled to receive the following:
| (a) | if such stockholder has made a cash election, as set forth and in accordance with the terms of the Merger Agreement, such stockholder shall receive a portion of the specified aggregate amount of cash consideration payable under the terms of the Merger Agreement (such aggregate amount not to exceed $50,000,000) and pursuant to the terms of such stockholder’s cash election; and |
| (b) | a number of shares of Class A common stock, par value $0.0001 per share, of CMLSII (the “Class A Common Stock”) equal to the quotient of: (i) (A) the product of (x) such stockholder’s total shares of SomaLogic Capital Stock multiplied by (y) the per share amount calculated in accordance with the Merger Agreement minus (B) the amount of cash payable to such stockholder pursuant to its cash election, if any, divided by (ii) $10.00. |
In addition, at the Effective Time, each outstanding option to purchase SomaLogic Capital Stock will roll over into options to purchase Class A Common Stock, as further set forth in and in accordance with the terms of the Merger Agreement.
Earnout
In addition to the payment of cash, issuance of Class A Common Stock and rollover of other SomaLogic equity awards described above, as of the Effective Time, if at any time between the 13-month anniversary of the Closing and the 24-month anniversary of the Closing (inclusive of the first and last day of such period, the “Earn-Out Period”), the volume-weighted average closing price of the Class A Common Stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $20.00 during the Earn-Out Period, then CMLSII will issue or cause to be issued to each SomaLogic stockholder, in accordance with such SomaLogic stockholder’s respective pro rata share, and certain employees or individual service providers of SomaLogic (the “Earn-Out Service Providers”), in accordance with the terms of their respective award agreements, 5,000,000 shares of Class A Common Stock, upon the terms and subject to the conditions set forth in the Merger Agreement and the other Transaction Agreements.
Governance
CMLSII has agreed to take all action within its power as may be necessary or appropriate such that, effective immediately after the closing of the Business Combination, CMLSII board of directors will consist of up to nine directors, which will initially include: (i) Kevin Conroy, Troy Cox and Steve Quake, as designees of CMLSII and subject to the approval of the board of directors of SomaLogic; (ii) Eli Casdin, as designee of SomaLogic; and (iii) the remaining director nominees to be designated by SomaLogic pursuant to written notice to CMLSII as soon as reasonably practicable following the date of the Merger Agreement. The board of directors of CMLSII following the closing of the Business Combination will have a majority of “independent” directors for the purposes of Nasdaq rules, each of whom will serve in such capacity in accordance with the terms of CMLSII’s Organizational Documents following the effective time.
Representations and Warranties
The Merger Agreement contains representations and warranties of the parties thereto that are customary for transactions of this type, including representations and warranties relating to (a) entity organization, formation and authority, (b) capital structure, (c) authorization to enter into the Merger Agreement, (d) legal compliance and approvals, (e) financial statements and liabilities, (f) absence of changes, (g) litigation, (h) employee matters, (i) real property, (j) taxes, (k) intellectual property and privacy, (l) material contracts, (m) transactions with affiliates, (n) government grants and incentives and (o) in the case of CMLSII only, (i) its public filings, (ii) the PIPE Investment (as defined below) and (iii) its trust account.
Covenants
The Merger Agreement includes customary covenants of the parties with respect to the operation of their respective businesses prior to the consummation of the Business Combination and efforts to satisfy the conditions to consummation of the Business Combination.
The Merger Agreement also contains additional covenants of the parties, including, among others, covenants providing for CMLSII and SomaLogic to use their reasonable best efforts to obtain all necessary regulatory approvals and covenants providing for CMLSII, Merger Sub and SomaLogic to cooperate in the preparation of the Proxy Statement/Prospectus (as such term is defined in the Merger Agreement) required to be filed with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the Business Combination.
In addition, CMLSII has agreed to adopt an equity incentive plan and employee stock purchase plan, as more fully described in the Merger Agreement.
Non-Solicitation Restrictions
Except as expressly permitted by the Merger Agreement, from the date of the Merger Agreement to the Effective Time or, if earlier, the valid termination of the Merger Agreement in accordance with its terms, CMLSII, SomaLogic and Merger Sub have each agreed not to, directly or indirectly: (i) solicit, initiate, enter into or continue discussions, negotiations or transactions with, or encourage or respond to any inquiries or proposals by, or provide any information to, any Person (other than CMLSII and its agents, representatives, advisors) concerning any merger, sale of ownership interests and/or assets of the SomaLogic, recapitalization or similar transaction (each, a “Company Business Combination”); (ii) enter into any agreement regarding, continue or otherwise participate in any discussions or negotiations regarding, or cooperate in any way that would otherwise reasonably be expected to lead to a Company Business Combination; or (iii) commence, continue or renew any due diligence investigation regarding a Company Business Combination.
CMLSII Change in Recommendation
CMLSII is required to include in the Proxy Statement/Prospectus the recommendation of CMLSII’s board of directors to CMLSII’s stockholders that they approve the transaction proposals (as such proposals are more fully set forth in the Merger Agreement, collectively, the “CMLSII Board Recommendation”). CMLSII is permitted to change the CMLSII Board Recommendation only as required by applicable legal requirements.
Conditions to Closing
General Conditions
The consummation of the Merger is conditioned upon, among other things, (a) receipt of CMLSII’s stockholder approval, (b) CMLSII having at least $5,000,001 of net tangible assets as described under the terms of the Merger Agreement, (c) the expiration or termination of the waiting period under the Hart-Scott-Rodino Act and (d) the absence of any governmental order, statute, rule or regulation enjoining or prohibiting the consummation of the Business Combination.
SomaLogic’s Conditions to Closing
The obligations of SomaLogic to consummate the Merger also are conditioned upon, among other things, (a) customary closing conditions, including, without limitation, CMLSII’s delivery of certain agreements, (b) the aggregate cash proceeds from CMLSII’s trust account, together with the proceeds from the PIPE Investment (as defined below), equaling no less than $250,000,000 (after deducting any amounts paid to CMLSII stockholders that exercise their redemption rights in connection with the Business Combination and any unpaid transaction expenses incurred or subject to reimbursement by CMLSII or SomaLogic), and (c) the approval by Nasdaq of CMLSII’s listing application in connection with the Business Combination.
CMLSII Conditions to Closing
The obligations of CMLSII to consummate the Merger are also conditioned upon, among other things, customary closing conditions, including, without limitation, SomaLogic’s delivery of certain agreements.
Termination
The Merger Agreement allows the parties to terminate the Merger Agreement if certain customary conditions described in the Merger Agreement are not satisfied, including, without limitation, each party’s right to terminate, subject to certain limited exceptions, if the Business Combination is not consummated by December 31, 2021.
If the Merger Agreement is validly terminated, none of the parties to the Merger Agreement will have any liability or any further obligation under the Merger Agreement other than customary confidentiality obligations, except in the case of a willful and intentional breach of the Merger Agreement or intentional fraud in the making of the representations and warranties in the Merger Agreement.
A copy of the Merger Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference, and the foregoing description of the Merger Agreement is qualified in its entirety by reference thereto. The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the Merger Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. CMLSII does not believe that these schedules contain information that is material to an investment decision.
Certain Related Agreements
Subscription Agreements and PIPE Investment (Private Placement)
On March 28, 2021, concurrently with the execution of the Merger Agreement, CMLSII entered into subscription agreements (collectively, the “Subscription Agreements”) with certain investors (collectively, the “PIPE Investors” which include certain existing equityholders of SomaLogic), pursuant to, and on the terms and subject to the conditions of which, the PIPE Investors have collectively subscribed for 37.5 million shares of Class A Common Stock for an aggregate purchase price equal to $375 million (the “PIPE Investment”). The PIPE Investment will be consummated immediately prior to the closing of the Business Combination. The Subscription Agreements provide for certain customary registration rights for the PIPE Investors. The Subscription Agreements will terminate with no further force and effect upon the earliest to occur of: (a) such date and time as the Merger Agreement is terminated in accordance with its terms; (b) the mutual written agreement of the parties to such Subscription Agreement; and (c) December 31, 2021.
The foregoing description of the Subscription Agreements and the PIPE Investment is subject to and qualified in its entirety by reference to the full text of the form of Subscription Agreement, a copy of which is attached as Exhibit 10.1 hereto, and the terms of which are incorporated herein by reference.
Stockholder Lock-Up Agreements
At the closing of the Business Combination, CMLSII will enter into Lock-Up Agreements (each, a “Lock Up Agreement”) with certain stockholders of SomaLogic, pursuant to which such stockholders have agreed, respectively, to, among other things, customary lock-up restrictions following the closing of the Business Combination.
The foregoing description of the Lock-Up Agreements is subject to and qualified in its entirety by reference to the full text of the form of Lock-Up Agreements, the form of which is attached as Exhibit 10.2 hereto, and the terms of which are incorporated herein by reference.
Stockholder Support Agreements
On March 28, 2021, CMLSII entered into Support Agreements (each, a “Stockholder Support Agreement”) with certain stockholders of SomaLogic, pursuant to which such stockholders have agreed, respectively, to execute written consents with respect to their shares of SomaLogic Capital Stock held of record or thereafter acquired in favor of the Merger and related matters, in each case, on the terms and subject to the conditions set forth in the Stockholder Support Agreement.
The foregoing description of the Stockholder Support Agreement is subject to and qualified in its entirety by reference to the full text of the form of Stockholder Support Agreement, a copy of which is attached as Exhibit 10.3 hereto, and the terms of which are incorporated herein by reference.
Sponsor Support Agreement
On March 28, 2021, CMLSII entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”) with CMLS Holdings II, LLC, a Delaware limited liability company (“Sponsor”), and SomaLogic, whereby Sponsor has agreed to, among other things, (a) vote at any meeting of the stockholders of CMLSII all of its shares of capital stock of CMLSII held of record or thereafter acquired in favor of the Stockholder Approvals (as defined in the Merger Agreement), (b) be bound by certain other covenants and agreements related to the Business Combination and (c) be bound by certain transfer restrictions with respect to such securities, prior to the closing of the Business Combination, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
The foregoing description of the Sponsor Support Agreement is subject to and qualified in its entirety by reference to the full text of the Sponsor Support Agreement, a copy of which is attached as Exhibit 10.4 hereto, and the terms of which are incorporated herein by reference.
Sponsor Forfeiture Agreement
On March 28, 2021, the Sponsor entered into a Sponsor Forfeiture Agreement (the “Forfeiture Agreement”) with SomaLogic and CMLSII, whereby Sponsor has agreed, subject to certain limitations and in accordance with the terms of the Forfeiture Agreement, to forfeit up to 33% of its shares of class B common stock of CMLSII, such actual amount tied to actual exercise of redemption rights of CMLSII stockholders exercise their redemption rights in connection with the Business Combination, as more fully described in the Forfeiture Agreement.
The foregoing description of the Forfeiture Agreement is subject to and qualified in its entirety by reference to the full text of the form of Forfeiture Agreement, a copy of which is attached as Exhibit 10.5 hereto, and the terms of which are incorporated herein by reference.
Amended and Restated Registration Rights Agreement
At the closing of the Business Combination, SomaLogic, the Sponsor and certain stockholders of SomaLogic will enter into an amended and restated registration rights agreement (the “Registration Rights Agreement”) pursuant to which, among other things, the parties thereto will be granted certain customary registration rights with respect to shares of Class A Common Stock.
The foregoing description of the Registration Rights Agreement is subject to and qualified in its entirety by reference to the full text of the form of Registration Rights Agreement, a copy of which is included as Exhibit 10.6 hereto, and the terms of which are incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K (this “Current Report”) is incorporated by reference herein. The shares of common stock to be issued in connection with the Subscription Agreements and the transactions contemplated thereby will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering.
Item 7.01. Regulation FD Disclosure.
On March 29, 2021, the Company issued a press release announcing the Business Combination. A copy of the press release is furnished hereto as Exhibit 99.1.
Furnished as Exhibit 99.2 hereto is an investor presentation, dated March 29, 2021, that will be used by the Company regarding the Business Combination.
Furnished as Exhibit 99.3 hereto is a transcript of a webcast first posted on March 29, 2021 in connection with the Business Combination.
The information in this Item 7.01 and Exhibits 99.1, 99.2 and 99.3 attached hereto 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 liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings.
Cautionary Statement Regarding Forward Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed transaction between SomaLogic and the Company, including statements regarding the anticipated benefits of the transaction, the anticipated timing of the transaction, expansion plans, projected future results and market opportunities of SomaLogic. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of the Company’s securities, (ii) the risk that the transaction may not be completed by the Company’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by the Company, (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the merger agreement by the shareholders of the Company, the satisfaction of the minimum trust account amount following redemptions by the Company’s public shareholders and the receipt of certain governmental and regulatory approvals, (iv) the lack of a third-party valuation in determining whether or not to pursue the transaction, (v) the inability to complete the PIPE investment in connection with the transaction, (vi) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement, (vii) the effect of the announcement or pendency of the transaction on SomaLogic’s business relationships, operating results and business generally, (viii) risks that the proposed transaction disrupts current plans and operations of SomaLogic and potential difficulties in SomaLogic employee retention as a result of the transaction, (ix) the outcome of any legal proceedings that may be instituted against SomaLogic or against the Company related to the merger agreement or the transaction, (x) the ability to maintain the listing of the Company’s securities on a national securities exchange, (xi) the price of the Company’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which the Company plans to operate or SomaLogic operates, variations in operating performance across competitors, changes in laws and regulations affecting the Company’s or SomaLogic’s business and changes in the combined capital structure, (xii) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities, (xiii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry, (xiv) the size and growth of the market in which SomaLogic operates and (xv) SomaLogic’s ability to operate as a public company. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the Company’s registration on Form S-1 (File No. 333-252626), the Proxy Statement/Prospectus discussed above and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and SomaLogic and the Company assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Neither SomaLogic nor the Company gives any assurance that either SomaLogic or the Company or the combined company will achieve its expectations.
Additional Information and Where to Find It / Non-Solicitation
In connection with the proposed transaction, the Company intends to file a registration statement, which will include a preliminary proxy statement/prospectus with the SEC. The proxy statement/prospectus will be sent to the stockholders of the Company. The Company and SomaLogic also will file other documents regarding the proposed transaction with the SEC. Before making any voting decision, investors and security holders of the Company are urged to read the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC in connection with the proposed transaction as they become available because they will contain important information about the proposed transaction. Investors and security holders will be able to obtain free copies of the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by the Company and SomaLogic through the website maintained by the SEC at www.sec.gov. The documents filed by the Company with the SEC also may be obtained free of charge at the Company’s website at https://cmlifesciencesspac.com/ or upon written request to the Company, c/o Corvex Management, 667 Madison Ave, New York, NY 10065
Participants in Solicitation
The Company and SomaLogic and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s shareholders in connection with the proposed transaction. Information about the Company’s directors and executive officers and their ownership of the Company’s securities is set forth in the Company’s filings with the SEC. To the extent that holdings of the Company’s securities have changed since the amounts printed in the Company’s Registration Statement on Form S-1, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. A list of the names of such directors and executive officers and information regarding their interests in the business combination will be contained in the proxy statement/prospectus when available. You may obtain free copies of these documents as described in the preceding paragraph.
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination. This Current Report on Form 8-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, 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 shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an exemption therefrom.
Item 9.01 Exhibits.
EXHIBIT INDEX
| Exhibit No. | | Description |
| 2.1 | | Agreement and Plan of Merger, dated as of March 28, 2021, by and among, CM Life Sciences II Inc., SomaLogic, Inc. and S-Craft Merger Sub, Inc. |
| 10.1 | | Form of Subscription Agreement. |
| 10.2 | | Form of Shareholder Lock-Up Agreement. |
| 10.3 | | Form of Stockholder Support Agreement, dated as of March 28, 2021, by and among CM Life Sciences II Inc., SomaLogic, Inc. and the stockholders of SomaLogic, Inc. named therein. |
| 10.4 | | Sponsor Support Agreement, dated as of March 28, 2021, by and among CMLS Holdings II, LLC, CM Life Sciences II Inc. and SomaLogic, Inc. |
| 10.5 | | Forfeiture Agreement, dated as of March 28, 2021, by and between CMLS Holdings II, LLC and SomaLogic, Inc. |
| 10.6 | | Form of Amended and Restated Registration Rights Agreement. |
| 99.1 | | Press Release, dated March 29, 2021. |
| 99.2 | | Investor Presentation, dated March 29, 2021. |
| 99.3 | | Webcast Transcript. |
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.
| | CM Life Sciences II Inc. |
| | |
| Date: March 29, 2021 | By: | /s/ Brian Emes |
| | Name: | Brian Emes |
| | Title: | Chief Financial Officer and Secretary |
8
