Current Report Filing (8-k)
December 02 2019 - 05:30PM
Edgar (US Regulatory)
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): November 25, 2019
AdvanSource
Biomaterials Corporation
(Exact
Name of Registrant as Specified in Charter)
Delaware
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000-28034
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04-3186647
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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229 Andover Street, Wilmington, Massachusetts
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01887
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(Address
of principal executive offices)
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(Zip Code)
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Issuer’s telephone number
(978) 657-0075
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:
☐
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☒
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Exchange Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock, par value $0.001 per share
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ASNB
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Not
applicable
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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 ☒
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. ☐
Additional
Information and Where to Find It
In
connection with the proposed sale (the “Transaction”) of substantially all of the assets of AdvanSource Biomaterial
Corporation, a Delaware corporation (the “Company”) to Mitsubishi Chemical Performance Polymers, Inc., a Delaware
corporation (“Buyer”), pursuant to the terms of that certain Asset Purchase Agreement by and between the Company and
Buyer, dated November 25, 2019 (the “Purchase Agreement”), the Company will file with the Securities and Exchange
Commission (“SEC”) a proxy statement, which will be mailed or otherwise disseminated to the Company’s stockholders
when it becomes available. The Company’s stockholders and other interested persons are urged to read the preliminary proxy
statement and any amendments thereto and the definitive proxy statement, when it becomes available, in connection with the solicitation
of proxies for the special meeting of stockholders to be held to approve the Transaction, because these documents will contain
important information about the Company and the Transaction. The definitive proxy statement, when available, will be mailed to
stockholders of the Company as of a record date to be established for voting on the Transaction. Stockholders will also be able
to obtain a free copy of the proxy statement, as well as other filings containing information about the Company without charge,
at the SEC's website (www.sec.gov) or by calling 1-800-SEC-0330. Copies of the proxy statement and other filings with the SEC
can also be obtained, without charge, by directing a request to: AdvanSource Biomaterials Corporation at 229 Andover St. Wilmington,
MA 01887. Additionally, all documents filed with the SEC can be found on the Company's website, http://www.advbiomaterials.com.
Participants
in Solicitation
The
Company and its directors and executive officers and other persons may be deemed to be participants in the solicitations of proxies
of the Company's stockholders in respect of the Transaction. Information regarding the Company's directors and executive officers
is available in its annual report on Form 10-K filed with the SEC. Additional information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests will be contained in the proxy statement when it becomes
available.
Disclaimer
This
report and the exhibits hereto do not constitute a solicitation of any vote or approval. The Company intends to file a proxy statement
with the SEC containing information about the Transaction. The Company will mail a definitive proxy statement and other relevant
documents after the SEC completes its review of the proxy statement.
Cautionary
Note Regarding Forward-Looking Statements
Some
of the statements in this report and the exhibits hereto are or may constitute "forward-looking statements" within the
meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any actual results may differ
from expectations, estimates and projections presented or implied and, consequently, you should not rely on these forward-looking
statements as predictions of future events. Words such as "believe," "expect," "anticipate,"
"project," "target," "optimistic," "intend," "aim," "will", "may"
and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of
these words does not mean that a statement is not forward-looking. Forward-looking statements relating to the Transaction and
the proxy voting process include, but are not limited to: (i) statements about the benefits of the transaction; (ii) Buyer’s
plans, objectives, expectations and intentions; (iii) the expected timing of completion of the Transaction; and (iv) the expected
cash premium for stockholders Forward-looking statements involve estimates, expectations and projections and, as a result, are
subject to risks and uncertainties many of which are beyond the Company’s control. Actual results could differ materially
if not substantially from those described in the forward-looking statements.
Important
risks and other factors could cause actual results to differ materially from those indicated by such forward-looking statements.
With respect to the Transaction, such risks and uncertainties include, among many others: (i) the risks associated with the Company’s
proxy statement and the proxy voting process, including uncertainty regarding whether the Company’s stockholders will approve
the Transaction; (ii) the risk that the benefits to the Company and its stockholders anticipated from Transaction may not be fully
realized or may take longer to realize than expected; (iii) unexpected costs, liabilities or delays in the consummation of the
Transaction; (iv) the outcome of any legal proceedings related to the Transaction; (v) the occurrence of any event, change or
other circumstances that could give rise to the termination of the Purchase Agreement or (viii) any of the factors in detailed
in the "Risk Factors" section of the Company's filings with the SEC.
The
foregoing listing of risks is not exhaustive. These risks, as well as other risks associated with the Transaction, will be more
fully discussed in the Company's proxy statement to be filed with the SEC in connection with the transaction. Additional risks
and uncertainties are identified and discussed in the Company’s reports filed or to be filed with the SEC, including its
Form 10-K, as amended, for the fiscal year ended December 31, 2018, and the proxy statement to be filed in connection with the
Transaction, and are available at the SEC's website at http://www.sec.gov. Forward-looking statements included in this press release
speak only as of the date of this press release. The Company undertakes and assumes no obligation, and does not intend, to update
the Company’s forward-looking statements, except as required by law.
Item
1.01 Entry into a Material Definitive Agreement.
Asset
Purchase Agreement
On
November 25, 2019, AdvanSource Biomaterials Corporation, a Delaware corporation (the “Company”), and Mitsubishi Chemical
Performance Polymers, Inc., a Delaware corporation (“Buyer”), entered into an Asset Purchase Agreement (the “Purchase
Agreement”), pursuant to which the Company agreed to sell substantially all of its assets to Buyer on the terms and subject
to the conditions set forth in the Purchase Agreement (the “Asset Sale”). As consideration for the Asset Sale, Buyer
has agreed to pay the Company $7.25 million.
Representations
and Warranties
The
Purchase Agreement contains customary representations and warranties by each of Buyer and the Company. Many of the representations
and warranties are subject to qualifications and limitations agreed to by the parties in connection with negotiating the terms
of the Purchase Agreement or to information provided pursuant to certain disclosure schedules to the Purchase Agreement. The representations
and warranties made by the parties do not survive the closing of the Asset Sale (the “Closing”) and there are no indemnification
rights for another party’s breach.
Covenants
of the Parties
Each
party has agreed to use its commercially reasonable efforts to cause the various conditions to Closing to be satisfied as soon
as practicable after the date of the Purchase Agreement to effect the Closing. The Purchase Agreement also contains certain customary
covenants by each of the parties during the period between the signing of the Purchase Agreement and the earlier of the Closing
or the termination of the Purchase Agreement in accordance with its terms (the “Interim Period”).
The
Purchase Agreement and the consummation of the transactions contemplated thereby require that the Company receive the requisite
approval from the Company’s stockholders. The Company agreed, as soon as reasonably practicable after the date of the Purchase
Agreement, to convene a special meeting of the Company’s stockholders to approve the Purchase Agreement, the transactions
contemplated thereby and related matters and to prepare, with the cooperation and consultation of Buyer, and file with the Securities
and Exchange Commission (the “SEC”) a proxy statement for the purpose of soliciting proxies from the stockholders
of the Company at the special meeting of the stockholders.
The
Company agreed not to directly or indirectly solicit, initiate or knowingly take any action to facilitate or encourage the submission
of any alternative takeover proposal or any proposal that could reasonably be expected to lead to an alternative takeover proposal,
or enter into any agreement in principle, letter of intent, term sheet, acquisition agreement, merger agreement, option agreement
relating to an alternative takeover proposal during the Interim Period; provided that, prior to obtaining the requisite approval
from the Company’s stockholders, the Company’s board of directors may (i) engage in discussions or negotiations with
a third-party with respect to an unsolicited alternative takeover proposal that its board of directors determines in good faith
(after consultation with its financial advisor and its outside legal counsel) constitutes or is reasonably likely to lead to a
superior proposal, and (ii) following the receipt of a superior proposal, make an Adverse Recommendation Change (defined below)
and the Company may furnish non-public information relating to the Company to such third-party.
The
Company agreed that its board of directors would recommend that the Company’s stockholders vote in favor of the adoption
of the Asset Sale and that it would not change or withdraw such recommendation or enter into an alternative acquisition agreement
unless, prior to receiving the approval of the Company’s stockholders, the Company (i) receives an unsolicited alternative
takeover proposal that it determines in good faith to be superior to the transactions contemplated by the Purchase Agreement and
that the failure to take such action would reasonably be expected to be inconsistent with the board of director’s fiduciary
duties, or (ii) experiences a material intervening event, circumstance, change or condition occurs or arises with respect to the
Company after the date of the Purchase Agreement that was not reasonably foreseeable or known by the Company’s board of
directors as of the date of the Purchase Agreement and does not relate to another acquisition proposal or transaction. In case
of either of the foregoing, the Company’s board of directors is entitled to change its recommendation prior to the special
meeting of the Company’s stockholders (an “Adverse Recommendation Change”). Prior to such Adverse Recommendation
Change, if requested by Buyer, Buyer shall have a five (5) business day period to negotiate modifications to the Purchase Agreement
with the Company in order to obviate the need for the Adverse Recommendation Change.
Conditions
to Consummation of the Asset Sale
The
obligations of the parties to consummate the Asset Sale is subject to various conditions, including the following mutual conditions
of the parties unless waived: (i) no order being enacted by a government authority preventing or prohibiting the transactions
contemplated by the Purchase Agreement; (ii) no litigation pending before a governmental authority preventing or prohibiting the
transactions contemplated by the Purchase Agreement and (iii) the approval of the Purchase Agreement and the transactions contemplated
thereby and related matters by the requisite vote of the Company’s stockholders.
In
addition, unless waived by the Company, the obligation of the Company to consummate the Asset Sale is subject to the satisfaction
of the following Closing conditions, in addition to the delivery of customary certificates and other Closing deliveries:
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The
representations and warranties of Buyer being true and correct as of the date of the Purchase Agreement and as of the Closing
(with certain representations subject to a material adverse effect qualifier); and
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Buyer
having performed and complied in all material respects with its covenants and agreements under the Purchase Agreement required
to be performed or complied with on or prior the date of the Closing.
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Unless
waived by Buyer, the obligation of Buyer to consummate the transactions is subject to the satisfaction of the following Closing
conditions, in addition to the delivery of customary certificates and other Closing deliveries:
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The
representations and warranties of the Company being true and correct as of the date of the Purchase Agreement and as of the Closing
(with certain representations subject to a material adverse effect qualifier);
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The
Company having performed and complied in all material respects with its covenants and obligations under the Purchase Agreement
required to be performed or complied with on or prior to the date of the Closing; and
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The
absence of any material adverse effect with respect to the Company since the date of the Purchase Agreement which remains continuing
and uncured.
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Termination
The
Purchase Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including:
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by
written mutual agreement of the Company and Buyer;
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by
either the Company or Buyer by written notice to the other party in the event that:
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○
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there
shall be any applicable law that makes consummation of the Purchase Agreement illegal
or otherwise prohibited;
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any
governmental authority shall have issued a governmental order restraining or enjoining
the Purchase Agreement, and such governmental order shall have become final and non-appealable;
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the
closing shall not have occurred by March 31, 2020 (the “Outside Date”); provided
that the right to terminate the Purchase Agreement due to the Outside Date shall not
be available to any party whose failure to perform or comply with any of the covenants,
agreements or conditions in the Purchase Agreement has been the primary cause of, or
the primary factor that resulted in, the failure of the Closing to be consummated by
the Outside Date; or
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if
the requisite approval from the Company’s stockholders shall not have been obtained
at the special meeting duly convened therefor or at any adjournment or postponement thereof
at which a vote to approve the transactions contemplated by the Purchase Agreement was
taken; provided that the Company shall not be permitted to terminate the Purchase Agreement
due to a failure to obtain the requisite approval from the Company’s stockholders,
if such failure to is proximately caused by any action or failure to act of the Company
that constitutes a breach of the Purchase Agreement.
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by
written notice to Buyer if the Company is not then in material breach of any provision
of the Purchase Agreement and there has been a breach, inaccuracy in or failure to perform
any representation, warranty, covenant or agreement made by Buyer pursuant to the Purchase
Agreement that would give rise to the failure of any of the Closing conditions specified
in the Purchase Agreement and such breach, inaccuracy or failure has not been cured by
Buyer within fifteen (15) business days of Buyer’s receipt of written notice of
such breach from the Company; or
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by
written notice to Buyer, at any time prior to receiving the requisite approval from the
Company’s stockholders, if (i) (x) the Company has received a Superior Proposal
and the board of directors of the Company authorized the Company to enter into an Alternative Acquisition Agreement
to consummate a transaction contemplated by that Superior Proposal or (y) the board made
an Adverse Recommendation Change as a result of an Intervening Event, and (ii) the Company
has complied in all material respects with certain terms in the Purchase Agreement with
respect to such Superior Proposal.
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by
written notice to the Company if Buyer is not then in material breach of any provision
of the Purchase Agreement and there has been a breach, inaccuracy in or failure to perform
any representation, warranty, covenant or agreement made by the Company pursuant to the
Purchase Agreement that would give rise to the failure of any of the Closing conditions
specified in the Purchase Agreement and such breach, inaccuracy or failure has not been
cured by the Company within fifteen (15) business days of the Company’s receipt
of written notice of such breach from Buyer; or
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by
written notice to the Company, if at any time the board of directors of the Company (or a committee thereof) has
effected an Adverse Recommendation Change.
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If
the Purchase Agreement is terminated, all further obligations of the parties under the Purchase Agreement will terminate and be
of no further force and effect (except that certain obligations related to confidentiality, termination and certain general provisions
will continue in effect).
The
foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference
to the full text of the Purchase Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Voting
and Support Agreements
In
connection with the Asset Sale, certain officers and the directors of the Company who are also stockholders entered into Voting
and Support Agreements (each a “Voting Agreement”). Under the Voting Agreements, the stockholders agree to vote all
of their shares of the Company’s common stock in favor of the Purchase Agreement and related transactions and to otherwise
take certain other actions in support of the Purchase Agreement and related transactions and refrain from taking actions that
would adversely affect such stockholder’s ability to perform its obligations under the Voting Agreement. The Voting Agreements
prevent transfers of the Company’s common stock held by the stockholder party thereto between the date of the Voting Agreement
and the date of the Company’s special meeting of stockholders, except for certain permitted transfers.
The
foregoing description of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to
the form of Voting Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
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†
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Certain
schedules and exhibits to the Agreement have been omitted pursuant to Item 601(b)(2)
of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any
omitted schedule and/or exhibit to the SEC upon request.
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*
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Certain
sensitive financial, commercial and strategic information relating to the Company has been redacted in the marked portions of the exhibit.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: December
2, 2019
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ADVANSOURCE
BIOMATERIALS CORPORATION
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By:
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/s/
Michael F. Adams
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Michael F. Adams
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President and
Chief Executive Officer
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