Yield10 Bioscience Inc.

10/03/2024 | Press release | Distributed by Public on 10/03/2024 12:14

Material Event Form 8 K

Item 1.01 Entry into a Material Definitive Agreement
On October 1, 2024, Yield10 Bioscience, a Delaware corporation, its wholly-owned subsidiary Yield10 Oilseeds, Inc. (together, the "Company"), and Nuseed Nutritional US Inc. (the "Purchaser"), entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") pursuant to which Purchaser will acquire substantially all of the Company's assets (the "Asset Sale"). Pursuant to the Asset Purchase Agreement, Purchaser will pay to the Company an aggregate purchase price of up to $5,000,000 in cash, which amount will be reduced by amounts owed under the secured promissory note issued by the Company to the Purchaser that remain outstanding on the date of closing of the Asset Sale (the "Closing") and the amount of Assumed Payables (as defined in the Asset Purchase Agreement) assumed by the Purchaser at the Closing. As of the date hereof, the amounts owed under the promissory note is $1,850,000.
The Asset Purchase Agreement, the Asset Sale and the other transactions contemplated by the Asset Purchase Agreement have been unanimously approved by the board of directors of the Company (the "Board"). The Asset Purchase Agreement, the Asset Sale and other transactions contemplated by the Asset Purchase Agreement must also be approved by the Company's stockholders, as a condition to the Closing.
The Asset Purchase Agreement contains customary representations, warranties, conditions and covenants, including covenants (i) concerning the conduct of business by the Company prior to the Closing and (ii) prohibiting the Company and its representatives from soliciting, initiating or knowingly inducing, encouraging or facilitating any competing acquisition proposal, subject to certain limited exceptions. In addition, the Company and Purchaser have agreed to use their best efforts to consummate the Asset Sale and other transactions contemplated by the Asset Purchase Agreement.
The Company has filed a preliminary proxy statement and will prepare and file a definitive proxy statement with the U.S. Securities and Exchange Commission (the "SEC") and, subject to certain exceptions, the Board will recommend that the Asset Purchase Agreement be adopted by the Company's stockholders at a special meeting of the Company's stockholders (the "Board Recommendation") as soon as possible. However, subject to the satisfaction of certain terms and conditions, the Company and the Board, as applicable, are permitted to take certain actions which may, as more fully described in the Asset Purchase Agreement, include changing the Board Recommendation as a result of an intervening event if, and among other things, the Board has concluded in good faith after consultation with its financial advisors and outside legal counsel that the failure to take such action would cause the Board to be in breach of its fiduciary duties to the Company's stockholders under applicable law.
Each party's obligation to consummate the Asset Sale is also conditioned upon certain other customary closing conditions, including the accuracy of the other party's representations and warranties as of the Closing, subject, in certain instances, to certain materiality and other thresholds, the performance by the other party of its obligations and covenants under the Asset Purchase Agreement in all material respects, obtaining the requisite stockholder vote, the delivery of certain related ancillary documents by the other party and the absence of any injunction or other legal prohibitions preventing consummation of the Asset Sale. The Company has also agreed to indemnify Purchaser from and against any losses due to breaches of the Company's representations, warranties and covenants contained in the Asset Purchase Agreement and certain other liabilities.
The Asset Purchase Agreement contains certain customary termination rights in favor of each of the Company and Purchaser, including Purchaser's right to terminate the Asset Purchase Agreement if the Board changes the Board Recommendation. In addition, subject to customary exceptions, the Asset Purchase Agreement may be terminated by either party if the Closing has not occurred by December 31, 2024, subject to extension in certain specified circumstances. In connection with a termination of the Asset Purchase Agreement under specified circumstances, including due to a change in the Board Recommendation, the Company will be required to pay Purchaser a fee of $120,000.
The Asset Purchase Agreement has been included as an annex to the preliminary proxy statement for the special meeting solely to provide investors with information regarding its terms. It is not intended to be a source of financial, business or operational information about the Company. The representations, warranties and covenants contained in the Asset Purchase Agreement were made only for the purposes of the Asset Purchase Agreement as of the dates specified therein and solely for the benefit of the parties to the Asset Purchase Agreement. In addition, the representations, warranties and covenants contained in the Asset Purchase Agreement may be subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Asset Purchase Agreement, including the Company's representations, warranties and covenants being qualified by confidential disclosure schedules made for the purpose of allocating contractual risk amongst the parties as opposed to establishing such matters as facts, and may further be subject to certain standards of materiality applicable to the parties that differ from those applicable to investors. As a result, investors should not rely on the representations, warranties and covenants included in the Asset Purchase Agreement, or any descriptions thereof, as characterizations of the actual state of facts or condition of the Company and its business. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Asset Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures.
The foregoing description of the terms of the Asset Purchase Agreement is not complete and is qualified in its entirety by reference to the Asset Purchase Agreement, a copy of which is included as Annex A to the Company's proxy statement for the special meeting of the stockholders to approve the Asset Purchase Agreement, the Asset Sale and the Dissolution and incorporated herein by reference.