CANCER GENETICS, INC. (NASDAQ:CGIX) Files An 8-K Entry into a Material Definitive Agreement

CANCER GENETICS, INC. (NASDAQ:CGIX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01

Merger Agreement

On August 21, 2020, Cancer Genetics, Inc., a Delaware corporation (“CGIX”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with StemoniX, Inc., a Minnesota corporation (“StemoniX”), and CGI Acquisition, Inc., a Minnesota corporation and wholly-owned subsidiary of CGIX (“Merger Sub”). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by CGIX’s stockholders and StemoniX’s shareholders, Merger Sub will be merged with and into StemoniX, with StemoniX surviving the merger as a wholly-owned subsidiary of CGIX (the “Merger”). Prior to its execution, the Merger Agreement was unanimously approved and adopted by the Board of Directors of each of CGIX and StemoniX.

In particular, the Board of Directors of CGIX (the “Board”), unanimously (i) determined that the terms and provisions of the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, advisable and in the best interests of CGIX and its shareholders, (ii) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, (iii) determined that it is advisable and in the best interests of CGIX and its shareholders to enter into the Merger Agreement and to consummate the transactions contemplated thereby, including the Merger, and (iv) resolved to recommend the adoption of the Merger Agreement by the shareholders of CGIX.

to, and subject to the conditions of, the Merger Agreement, each share of common stock of StemoniX (other than Dissenting Shares (as defined in the Merger Agreement)), issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) shall be automatically converted into the right to receive an amount of shares of common stock, par value $0.0001 per share, of CGIX (“CGIX Common Stock”) equal to the Exchange Ratio (as defined in the Merger Agreement) (the “Merger Consideration”). All Company Options (as defined in the Merger Agreement) outstanding immediately prior to the Effective Time shall be exchanged for options to purchase CGIX Common Stock. All Company Warrants (as defined in the Merger Agreement) outstanding immediately prior to the Effective Time shall automatically be cancelled and each StemoniX warrantholder will be entitled to receive the same consideration such warrantholder would have received had they exercised the Company Warrant immediately prior to the Merger, net of the exercise price. As a result, immediately following the Effective Time, the former StemoniX shareholders will hold approximately 78% of the outstanding shares of CGIX Common Stock (which outstanding shares, the “Deemed Outstanding Shares”, in this context, includes the CGIX Common Stock issuable on a net exercise basis with respect to any in-the-money CGIX options, in-the-money CGI warrants, in-the-money Company Options and in-the-money Company Warrants) and the shareholders of CGIX will retain ownership of approximately 22% of the Deemed Outstanding Shares, with such percentages subject to certain closing adjustments based on net cash held by each company, and with such percentages subject to proportionate dilution from the private placement financing described below that is a condition of the Merger.

The combined company will continue to operate CGIX’s vivoPharm, Pty. Ltd. business and will also focus on advancing StemoniX’s microOrgans® platform and augmented intelligence tools for drug discovery and development. StemoniX, a private company, is a leader in developing human models for specific diseases via its microOrgan® platform, based on living micro-tissues engineered from human induced pluripotent stem cells (iPSC). Upon completion of the Merger, the board of directors of the combined company will be comprised of seven members, including John A. Roberts, President and Chief Executive Officer of CGIX, Yung-Ping Yeh, Chief Executive Officer of StemoniX, two individuals to be designated by CGIX prior to closing (subject to the reasonable consent of StemoniX) and three individuals to be designated by StemoniX prior to closing (subject to the reasonable consent of CGIX). In addition, it is currently anticipated that the executive officers of the combined company will be John A. Roberts, Yung-Ping Yeh, Andrew D.C. LaFrence, currently Chief Financial Officer and Chief Operating Officer of StemoniX, and Ralf Brandt, PhD, currently President of Discovery & Early Development Services of CGIX.

The Merger Agreement contains customary representations, warranties and covenants made by CGIX and StemoniX, including covenants relating to obtaining the requisite approvals of the shareholders of CGIX and StemoniX, indemnification of directors and officers and CGIX’s and StemoniX’s conduct of their respective businesses between the date of signing of the Merger Agreement and the closing of the transaction.

In connection with the Merger, CGIX will prepare and file with the U.S. Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 (the “Registration Statement”) that will contain a proxy statement/prospectus, and will seek the approval of CGIX’s shareholders with respect to certain actions, including the following:

On August 24, 2020, CGIX and StemoniX issued a joint press release announcing the execution of the Merger Agreement. A copy of the joint press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

(d) Exhibits

2.1 Agreement and Plan of Merger and Reorganization, by and among Cancer Genetics, Inc., StemoniX, Inc., and CGI Acquisition, Inc., dated August 21, 2020.*
99.1 Joint Press release, dated August 24, 2020.

* Schedules and exhibits have been omitted to Item 601(b)(2) of Regulation S-K. CGIX hereby undertakes to furnish supplementally copies of any of the omitted schedules upon request by the SEC.


CANCER GENETICS, INC Exhibit
EX-2.1 2 ex2-1.htm   Exhibit 2.1     AGREEMENT AND PLAN OF MERGER AND REORGANIZATION   among:   CANCER GENETICS,…
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About CANCER GENETICS, INC. (NASDAQ:CGIX)

Cancer Genetics, Inc. is engaged in the field of personalized medicine, enabling precision medicine in the field of oncology through its diagnostic products and services, and molecular markers. The Company develops, commercializes and provides molecular- and biomarker-based tests and services that enable physicians to personalize the clinical management of each individual patient by providing genomic information to diagnose, monitor and inform cancer treatment, and enable biopharmaceutical companies engaged in oncology trials to select candidate populations and manage adverse drug reactions by providing information regarding genomic factors influencing subject responses to therapeutics. It has a range of disease-focused oncology testing portfolio. Its molecular- and biomarker-based diagnostic services are provided for three sectors: cancer centers and hospitals, biotechnology and biopharmaceutical companies, and the research community.

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