Psychemedics Corporation
09/03/2024 | Press release | Distributed by Public on 09/03/2024 15:29
Delisting Transaction Statement - Form SC 13E3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
RULE 13e-3 TRANSACTION STATEMENT UNDER SECTION 13(e) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
Psychemedics Corporation
(Name of the Issuer and Name of Person Filing Statement)
Common Stock, $0.005 par value per share
(Title of Class of Securities)
744375205
(CUSIP Number of Class of Securities)
Brian Hullinger
President and Chief Executive Officer
Psychemedics Corporation
5220 Spring Valley Road
Dallas, Texas 75254
(800) 527-7424
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Persons Filing Statement)
Copies to:
Matthew J. Gardella, Esq.
Matthew W. Tikonoff, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
(617) 542-6000
This statement is filed in connection with (check the appropriate box):
| a. ☒ | The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities Exchange Act of 1934. |
| b. ☐ | The filing of a registration statement under the Securities Act of 1933. |
| c. ☐ | A tender offer. |
| d. ☐ | None of the above. |
Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☒
Check the following box if the filing is a final amendment reporting the results of the transaction: ☐
RULE 13e-3 TRANSACTION STATEMENT
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3 (this "Schedule 13E-3") is being filed with the Securities and Exchange Commission (the "SEC") pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), by Psychemedics Corporation (the "Company"), a Delaware corporation.
The Company proposes to hold an annual meeting of its stockholders to consider, among other matters, amendments to the Company's certificate of incorporation to effect a reverse stock split of the Company's common stock, par value $0.005 per share (the "common stock"), at a ratio not less than 1-for-4,000 and not greater than 1-for- 6,000 (the "Reverse Stock Split"), followed immediately by a forward stock split of the common stock at a ratio not less than 4,000-for-1 and not greater than 6,000-for-1 (the "Forward Stock Split," and together with the Reverse Stock Split, the "Stock Split"). As a result of the Reverse Stock Split, each share of common stock held by a stockholder of record owning immediately prior to the effective time of the Reverse Stock Split fewer than the minimum number of shares, which, depending on the Reverse Stock Split ratio chosen by the Company's Board of Directors (the "Board") would be between 4,000 and 6,000 shares (the "Minimum Number"), will be converted into the right to receive $2.35 in cash, without interest (the "Cash Payment"), and such stockholders would no longer be stockholders of the Company. Stockholders owning a number of shares of common stock equal to or greater than the Minimum Number immediately prior the effective time of the Reverse Stock Split ("Continuing Stockholders") would not be entitled to receive any cash for their fractional share interests resulting from the Reverse Stock Split, if any. The Forward Stock Split, which would immediately follow the Reverse Stock Split, would reconvert whole shares and fractional share interests held by the Continuing Stockholders back into the same number of shares of the common stock held by such Continuing Stockholders immediately prior to the effective time. As a result of the Forward Stock Split, the total number of shares of common stock held by a Continuing Stockholder would not change as a result of the Stock Split.
The primary purpose of the Reverse Stock Split is to enable the Company to maintain the number of its record holders of common stock below 300. The Reverse Stock Split is being undertaken as part of the Company's plan to terminate the registration of the common stock under the Exchange Act and suspend the Company's duty to file periodic reports and other information with the SEC under Section 13(a) thereunder, and to delist the common stock from the Nasdaq Capital Market.
This Schedule 13E-3 is being filed with the SEC concurrently with the filing of the Company's preliminary proxy statement on Schedule 14A (the "Proxy Statement") pursuant to Regulation 14A under the Exchange Act. The information contained in the Proxy Statement, including all annexes thereto, is expressly incorporated herein by reference and the responses to each item of this Schedule 13E-3 are qualified in their entirety by reference to the information contained in the Proxy Statement. As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion or amendment. This Schedule 13E-3 will be amended to reflect such completion or amendment of the Proxy Statement. Capitalized terms used and not otherwise defined herein have the meanings ascribed to such terms in the Proxy Statement.
| Item 1. | Summary Term Sheet |
The information set forth in the Proxy Statement under the caption "TERMS OF THE TRANSACTION" is incorporated herein by reference.
| Item 2. | Subject Company Information |
(a) Name and Address. The name of the subject company is Psychemedics Corporation, a Delaware corporation. The Company's principal executive offices are located at 5220 Spring Valley Road, Dallas, Texas 75254. The Company's telephone number is (800) 527-7424.
(b) Securities. The subject class of equity securities to which this Schedule 13E-3 relates is the Company's common stock, $0.005 par value per share, of which 5,805,611 shares were outstanding as of August 9, 2024.
(c) Trading Market and Price. The information set forth in the Proxy Statement under "INFORMATION ABOUT THE COMPANY - Market Price of Common Stock" is incorporated herein by reference.
(d) Dividends. The information set forth in the Proxy Statement under "INFORMATION ABOUT THE COMPANY - Dividends" is incorporated herein by reference.
(e) Prior Public Offerings. The Company has not made an underwritten public offering of its common stock for cash during the three years preceding the date of the filing of this Schedule 13E-3.
(f) Prior Stock Purchases. The Company has not purchased any subject securities during the two years preceding the date of the filing of this Schedule 13E-3.
| Item 3. | Identity and Background of Filing Person |
(a) Name and Address. The filing person, the Company, is also the subject company, with its address and telephone number provided in Item 2(a) above. The name of each director and executive officer is set forth below.
| Name | Position | |
| Robyn C. Davis | Director | |
| Peter H. Kamin | Director | |
| Darius G. Nevin | Chairman | |
| Andrew M. Reynolds | Director | |
| Brian Hullinger | Director, Chief Executive Officer and President | |
| Shannon Shoemaker | Vice President and Chief Revenue Officer | |
| Daniella Mehalik | Vice President of Finance |
The address of each director and executive officer of the Company is c/o Psychemedics Corporation, 5220 Spring Valley Road. Dallas, Texas 75254.
(b) Business and Background of Entities. Not applicable.
(c) Business and Background of Natural Persons. The information set forth in the Proxy Statement under "INFORMATION ABOUT THE COMPANY - Directors and Executive Officers" is incorporated herein by reference.
To the Company's knowledge, none of the Company's directors or executive officers have been convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors) or has been a party to any judicial or administrative proceeding during the past five years (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.
Each of the Company's directors and executive officers is a citizen of the United States.
| Item 4. | Terms of the Transaction |
(a) Material Terms. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION" and "SPECIAL FACTORS RELATING TO THE TRANSACTION" is incorporated herein by reference.
(c) Different Terms. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - The Transaction," "- Effects of the Transaction," "- Fairness of the Transaction," "- Treatment of Beneficial Holders (Stockholders Holding Shares in "Street Name")," and "- Material U.S. Federal Income Tax Consequences;" and SPECIAL FACTORS RELATING TO THE TRANSACTION - Effects of the Transaction," "- Fairness of the Transaction," and "- Material U.S. Federal Income Tax Consequences" is incorporated herein by reference.
(d) Appraisal Rights. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - No Appraisal or Dissenters' Rights;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - No Appraisal or Dissenters' Rights" is incorporated herein by reference.
(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under "SPECIAL FACTORS RELATING TO THE TRANSACTION - Fairness of the Transaction" is incorporated herein by reference.
(f) Eligibility for Listing or Trading. Not applicable.
| Item 5. | Past Contracts, Transactions, Negotiations and Agreements |
(a) Transactions. Not applicable.
(b) Significant Corporate Events. Not applicable.
(c) Negotiations or Contacts. Not applicable.
(e) Agreements Involving the Subject Company's Securities. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Potential Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons," and "- Vote Required for Approval of the Transaction Proposals at the Annual Meeting;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Potential Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons," "and "- Stockholder Approval" is incorporated herein by reference.
| Item 6. | Purposes of the Transaction and Plans or Proposals |
(b) Use of Securities Acquired. The information set forth in the Proxy Statement under "SPECIAL FACTORS RELATING TO THE TRANSACTION - Effective Date" is incorporated herein by reference.
(c) Plans. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Purpose of and Reasons for the Transaction," "- Effects of the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Purpose of and Reasons for the Transaction," "- Background of the Transaction," "- Effects of the Transaction," "- Nasdaq Capital Market Listing; OTC Pink Market," and "- Fairness of the Transaction," is incorporated herein by reference.
| Item 7. | Purposes, Alternatives, Reasons and Effects |
(a) Purposes. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Purpose of and Reasons for the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Purpose of and Reasons for the Transaction" and "- Background of the Transaction" is incorporated herein by reference.
(b) Alternatives. The information set forth in the Proxy Statement under "SPECIAL FACTORS RELATING TO THE TRANSACTION - Background of the Transaction," and "- Alternatives to the Transaction" is incorporated herein by reference.
(c) Reasons. The information set forth in the Proxy Statement under TERMS OF THE TRANSACTION - Purpose of and Reasons for the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Purpose of and Reasons for the Transaction," "- Background of the Transaction," "- Alternatives to the Transaction," and "- Fairness of the Transaction" is incorporated herein by reference.
(d) Effects. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - The Transaction," "- Effects of the Transaction," and "- Material U.S. Federal Income Tax Consequences;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Purpose of and Reasons for the Transaction," "- Effects of the Transaction," "- Nasdaq Capital Market Listing; OTC Pink Market," and "- Material U.S. Federal Income Tax Consequences" is incorporated herein by reference.
| Item 8. | Fairness of the Transaction |
(a) Fairness. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Transaction Committee and Board Recommendations of the Transaction," and "- Fairness of the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Background of the Transaction," and "- Fairness of the Transaction" is incorporated herein by reference.
(b) Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Purpose of and Reasons for the Transaction," "- Transaction Committee and Board Recommendations of the Transaction," "- Reservation of Rights," and "- Fairness of the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Purpose of and Reasons for the Transaction," "- Background of the Transaction," "- Alternatives to the Transaction," "- Fairness of the Transaction," and "- Fairness Opinion of Financial Advisor" is incorporated herein by reference.
(c) Approval of Security Holders. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Potential Conflicts of Interest of Officers, Directors, and Certain Affiliated Persons," and "- Vote Required for Approval of the Transaction Proposals at the Annual Meeting;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Fairness of the Transaction," "- Potential Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons," and "- Stockholder Approval" is incorporated herein by reference.
(d) Unaffiliated Representatives. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Fairness of the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Background of the Transaction," "- Fairness of the Transaction," and "- Fairness Opinion of Financial Advisor" is incorporated herein by reference.
(e) Approval of Directors. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Transaction Committee and Board Recommendations of the Transaction," and "- Fairness of the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Background of the Transaction," and "- Fairness of the Transaction" is incorporated herein by reference.
(f) Other Offers. None.
| Item 9. | Reports, Opinions, Appraisals and Negotiations |
(a) Report, Opinion or Appraisal. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Transaction Committee and Board Recommendations of the Transaction" and "- Fairness of the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Background of the Transaction," "- Fairness of the Transaction," and "- Fairness Opinion of Financial Advisor" is incorporated herein by reference.
(b) Preparer and Summary of the Report, Opinion or Appraisal. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Transaction Committee and Board Recommendations of the Transaction" and "- Fairness of the Transaction;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Background of the Transaction," "- Fairness of the Transaction," and "- Fairness Opinion of Financial Advisor" is incorporated herein by reference.
(c) Availability of Documents. The full text of the fairness opinion of Mirus Securities, Inc. ("Mirus") dated August 12, 2024, is attached as Annex D to the Proxy Statement. The fairness opinion of Mirus and the Valuation Presentations of Mirus dated August 12, 2024, June 5, 2024 and April 10, 2024 are each available for inspection and copying at the Company's principal executive offices, 5220 Spring Valley Road, Dallas, Texas 75254 during its regular business hours by any interested equity security holder of the Company or representative who has been so designated in writing.
| Item 10. | Source and Amounts of Funds or Other Consideration |
(a) Source of Funds. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Financing for the Stock Split;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Effects of the Transaction" and "- Source of Funds and Expenses" is incorporated herein by reference.
(b) Conditions. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Financing for the Stock Split;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Effects of the Transaction" and "- Source of Funds and Expenses" is incorporated herein by reference.
(c) Expenses. The information set forth in the Proxy Statement under "SPECIAL FACTORS RELATING TO THE TRANSACTION - Source of Funds and Expenses" is incorporated herein by reference.
(d) Borrowed Funds. None.
| Item 11. | Interest in Securities of the Subject Company |
(a) Securities Ownership. The information set forth in the Proxy Statement under "PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT" is incorporated herein by reference.
(b) Securities Transactions. None.
| Item 12. | The Solicitation or Recommendation |
(d) Intent to Tender or Vote in a Going Private Transaction. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Effects of the Transaction," "-Potential Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons," and "- Vote Required for Approval of the Transaction Proposals at the Annual Meeting;" "SPECIAL FACTORS RELATING TO THE TRANSACTION - Effects of the Transaction," "- Potential Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons," and "- Stockholder Approval" is incorporated herein by reference.
(e) Recommendation of Others. The information set forth in the Proxy Statement under "TERMS OF THE TRANSACTION - Potential Conflicts of Interests of Officers, Directors, and Certain Affiliated Persons," and "- Vote Required for Approval of the Transaction Proposals at the Annual Meeting;" and "SPECIAL FACTORS RELATING TO THE TRANSACTION - Background of the Transaction," and "- Fairness of the Transaction" is incorporated herein by reference.
| Item 13. | Financial Statements |
(a) Financial Information. The audited financial statements of the Company for the years ended December 31, 2023 and December 31, 2022 appearing in the Annual Report on Form 10- K for the fiscal year ended December 31, 2023 (filed with the SEC on March 28, 2024) are incorporated herein by reference. The interim financial statements of the Company for the three months ended March 31, 2024 appearing in the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (filed with the SEC on May 14, 2024) and the interim financial statements of the Company for the three and six months ended June 30, 2024 appearing in the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (filed with the SEC on August 13, 2024), are each incorporated herein by reference.
(b) Pro forma Information. Not applicable.
(c) Summary Information. The information set forth in the Proxy Statement under "FINANCIAL INFORMATION - Financial Information" is incorporated herein by reference.
| Item 14. | Persons/Assets, Retained, Employed, Compensated or Used |
(a) Solicitations or Recommendations. The information set forth in the Proxy Statement under "ABOUT THE ANNUAL MEETING" is incorporated herein by reference.
(b) Employees and Corporate Assets. The information set forth in the Proxy Statement under "ABOUT THE ANNUAL MEETING" is incorporated herein by reference.
| Item 15. | Additional Information |
(b) Not applicable.
(c) Other Material Information. The information contained in the Proxy Statement, including all appendices attached thereto, is incorporated herein by reference.
| Item 16. | Exhibits |
(b) Not applicable.
(c)(i) Opinion of Mirus, dated August 12, 2024 (incorporated herein by reference to Annex D of the Company's Schedule 14A filed with the Securities and Exchange Commission on September 3, 2024).
(c)(ii) Presentation, dated August 12, 2024 of Mirus to the Board of Directors of the Company.
(c)(iii) Presentation, dated June 5, 2024 of Mirus to the Board of Directors of the Company.
(c)(iv) Presentation, dated April 10, 2024 of Mirus to the Board of Directors of the Company.
(e) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
107 Filing Fee Table.
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.
| PSYCHEMEDICS CORPORATION | |||
| By: | /s/ Brian Hullinger | ||
| Brian Hullinger | |||
| President and Chief Executive Officer |
Dated: September 3, 2024